Role of Knowledge Management in CRM


By
Dr.N.Subburaj
Principal
Padmavani Arts & Science College for Women
Salem-636011, Tamil Nadu
S.Govindaraj
Asst.Prof in Business Administration
SLS MAVMM Ayira Vaisyar College
Madurai-14
 


Introduction

Customer Relationship Management is defined as a business strategy geared towards acquiring, retaining and growing more profitable customers, Sheth (1998) defines relationship marketing on the ongoing collaborative business activities between a Supplier and Customer on a one-to-one basis for the purpose of growing the total market by creating better end user value at reduced cost.

Customer Relationship Management enables companies to provide excellent real-time Customer Service by developing relationship with each valued Customer through the effective use of individual account information. Based on what they know about each Customer, Companies can customize market Offerings, Services, Programs, Messages and Media.

An Effective Customer Relationship Management

An Effective Customer Relationship Management system should essentially be practiced be the executives of the financial service industries to obtain everyday information about important developments in the marketing environment to enable them to make day to day scanning of the environment. The scanning of the market environment can be made by reading business related books, newspaper, trade publications and by talking to the users of services. The executives have to be trained in an effective way in this regard and are motivated to sport and report new developments.

Concepts of Customer Relationship Management

Important concepts in customer relationship management and they are satisfaction, retention, loyalty and lifetime value.

A) Customer Satisfaction

Satisfaction is person's feelings of pleasure of disappointment resulting from comparing a product's received performance for outcome in relation to his expectations. A dissatisfied customer is not likely to become a loyal customer. Customer loyalty is based on customer satisfactions and delivering performances to match. These companies are aiming for total customer satisfaction.

B) Customer Retention

Customer retention has a tremendous profit protection. To keep the customers are a strategic issue for companies. Customer retention helps to predict the profitability of the company and therefore provides an excellent management tool for considering the success of quality and customer service programmes.

Retaining a customer allows a company to develop the relationship and encourage both repeated and increasingly frequent buying activity. There is a close link between quality, client retention and profitability. Marketing activity for retaining the customers can be expensive and needs to be closely evaluated. The most profitable customers are the most valuables.

C) Loyalty

The idea of customer loyalty is not new customer loyalty is the primary generator of profit. It is only recently that customer loyalty has received widespread attention at the company level. Customers can be loyal to different things; for example, they can be loyal to a brand which symbolizes a group of people. In recent years competitive markets have been flooded with customer loyalty programmes. Long term relationships with customers are therefore mire profitable because retaining existing customers prevents competitors from gaining market share.

D) Regain Management

Service marketers know that 'having customers' , not merely acquiring customers is crucial for service firms. In terms of having customers, research shows that service quality, relationship quality and overall service satisfaction can improve customer's intention to stay with a firm. To avoid the customers switching from a service providers to another we can use regain management.

Regain management is aimed at winning back customers who have either given notice to terminate the business relationship or whose relationship has already ended. Regain management provides a profitable customer market by adopting a specific management process of consisting of analysis, action and controlling.

Customer Relationship management identified by this group are also    

* Assurance and information integrity.
* Management consulting and performance measurement
* Technology Services.
* Financial Planning.
* International Services

Customer Relationship management may also reap benefit from using the interest

* Increased choice of vendors and products.
* Convenience from shopping at home or office.
* Greater amount of information that can be accessed on demand.
* More competitive prices and increase price comparison capabilities.
* Greater customization in the delivery of services.

Customer Services Provided by Management.

A) Reliability

Customer feedback should be collected continuously after purchase to learn how to improve the product and its marketing. The company should evaluate all improvement ideas and introduce the most valued and feasible improvements as soon as possible. According to this concept, consumer's past experiences influence their brand attitude and condition their future behavior. Therefore information and experience also determine reliability.

B) Responsiveness

Companies can also obtain forecast from experts, including the dealers, the distributors, the suppliers, the marketing consultants and the trade associations. Companies are taking it as business strategy to respond quickly to customers and gain their loyalty. Therefore customer loyalty will be built on the selling process and the performance of the product during its lifetime utility value.

C) Assurance

The marketer must do the research to find out how the consumer becomes aware of the existence of the product or services to meet his need and desires. Ha must also design the marketing mix so that the consumer will easily be able to gather information about the products utility aspects and its functions.

Today's competitive environment, where companies are adopting various methods to woo the prospective consumers, marketers have to make all efforts to understand all the complexities which go into the buying behaviour and frame marketing programmes suitable to the target market and also give assurance to the consumer about their marketing product.

D) Empathy

Effective communications provides information and educate customers, healing them to make sensible choices and obtain better value from the services they purchase. Thus marketing communication plays an important role for service firms with high fixed costs, low marginal costs and excess capacity to fill. In consumers marketing, advertising tends to be the point of contact between a marketer and its propectie   customers.

E) Tangibles

Customer relationship management has the promise to be very powerful business channel. When implementer properly and when align with the firms overall corporate strategy, electronic commerce can significantly enhance the operation of the firms.

Conclusion

Customer relationship management makes the entire organization more efficient and makes the systems more integrated and ultimately leads streamlining of the processes and everyone share the same, accurate and timely information.

In general the present marketing strategy followed by customer relationship management successful to a great extend in satisfying the customers of different categories.
 


Dr.N.Subburaj
Principal
Padmavani Arts & Science College for Women
Salem-636011, Tamil Nadu
S.Govindaraj
Asst.Prof in Business Administration
SLS MAVMM Ayira Vaisyar College
Madurai-14
 

Source: E-mail September 9, 2012

          

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