Customer Relationship Management

Neha Jain
1st year student of PGP
S.A.Jain Institute of Management & Technology
Ambala City

We all know the meaning of customer, relationship & management, but by compiling these three words it is defined as C.R.M., which  is a tool  used by businesses in order to increase  profitability, revenue & also customer satisfaction by segmenting the customers, then finding customer satisfying behavior, and also implementing the process to satisfy the customers. C.R.M. technology should have the potential to seek the customer's satisfaction and which increases customer access and leads to deep and strong interactions. Take it like this: we all live in a society and we all are surrounded by some relationships. But, if these are having some grievances then our performance will be hindered.


With the very emergence of needs C.R.M. took birth and with the passage of time it has been colored as per the market requirements.

1. Traditional marketing : - C.R.M. took birth, when people started exchanging goods to satisfy their needs and wants. This was the time of barter system.

2. Mass marketing : - At this time barter system became obsolete and industrial revolution took place and sellers were engaged in mass production, mass distribution. At this time production was given emphasis.

3. Value-based marketing : - At this time producers lay emphasis on offering better value to customers money by improving quality of products and services offered to customers.

4. Relationship marketing : - The scenario changed and producers started feeling the importance of customers and tried to build long-term relations either by providing free gifts, or various services like guarantees etc. This was the time of customer-centered marketing.

5. Marketing on web: - This is also known as E-SHOPPING and is itself diversified in its nature. Doing just few clicks of mouse purchase variety and number of products. This is the most convenient and comfortable way of shopping. Many co. like Amazon, embay are the best-suited examples.

6. Customized marketing : - With the advancement in technologies this very advancement in marketing has become possible. Software database is used for this. Software databases help in providing & storing customers' information. Softwares like: -Sap, Siebel, Broadvison, Chordiant, Onyx, Selligent, Silknet, Lucent, Inference, IBM, Goldmine etc. are being used by the companies. Aircraft parts distributor Aviall, consumer product giant Kimberly-Clark, Lakme, Mattel's 'My Design Barbie', Dell computers, Nike shoes, electronic connector manufacturer Molex, and McDonald's are enhancing their sales, revenue and customer's loyalty with the implementation of this technology. Harvard business review depicts that by the end of 2010 almost 30% of U.S. commercial activity will involve customized marketing.

Types of C.R.M.

C.R.M. allows a company to address all types of customers at different points in its life and choose the market program that best fits a customer's attitude. There are basically four types of C.R.M.: -

1. Win back customers: -This is the way of convincing the costumers to stay with the company at that point of time when they discontinue with the company. Coke, Pepsi and others soft drinks are the best-suited examples of this type.

2. Prospecting : - This is an effort to win new, first time customers. In this company needs to segment the market which helps organization to affectively target the offer.

3. Loyalty : - This is an effort in which company tries to prevent customers to leave the company. It is very difficult to gain it accurately. It uses two elements: -

(a) Value based segmentation: - it helps in determining that how much company is willing to invest in retaining its customer's loyalty.

(b) Need based segmentation: - after determining its investment power, company can determine its customer loyalty program means either to use relationship marketing or marketing on the web or customized marketing.

4. Cross sell/Up sell: - In this company provides value addition in its product. In cross sell after getting customer data the value means offer to be provided is considered. And in up selling the product or service offered is an enhanced one means innovated.


C.R.M. is not an easy task that is just accomplished by stepping one foot ahead. It requires number of steps as per the situation. The basic one's are: -


Strong bonds provide that loyalty that turns out to be everlasting. Helps in recovering customer acquisition cost and also benefits by 'word of mouth' as it is more fruitful than television, direct mail and press put together. Harvard research also depicts that 5% increase in customer retention increases NPR by 20%-120%.


Despite having best manufacturing capabilities, best marketing approach, best business strategy the organizations use C.R.M. WHY? Because each and every tool or strategy of a business can be copied by anyone but one's soft skills, one's way of handling relations can't ever be copied by anyone.  

Because of all these advantages it is being use by many co. like Lakme employed 'Computer Touch Screen', Ponds Institute has a customer response center, HLL-Surf received 'Open Customer Feedback' and Surf-Excel is the result of that, Apollo Tyres offered 'Dia-a-Tyre, Asian paints is also providing home solutions.

In short the CRM is a process enabled by technology to know your customers well and use the database to retain profitable relationship with high life time value customers. Retention of good customers and maximizing revenue through them is at core of CRM.

Neha Jain
1st year student of PGP
S.A.Jain Institute of Management & Technology
Ambala City

Source : E-mail February 3, 2005

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