Learning Objectives
Define CRM; Understand the importance of CRM;
Explain the determinants of CRM and the key stages in its development;
Discuss the main functions and various models of CRM; Explain the role of salespeople as relationship developers Discuss the management of customer relationships.
CRM is the development and maintenance of mutually beneficial long-term relationships with strategically significant customers
(Buttle, 2000)
CRM is an IT enhanced value process, which identifies, develops, integrates and focuses the various competencies of the firm to the voice of the customer in order to deliver long-term superior customer value, at a profit to well identified existing and potential customers.
(Plakoyiannaki and Tzokas, 2001)
Determinants of CRM Trust The willingness to rely on the ability, integrity, and motivation of one company to serve the needs of the other company as agreed upon implicitly and explicitly. Value The ability of a selling organisation to satisfy the needs of the customer at a comparatively lower cost or higher benefit than that offered by competitors and measured in monetary, temporal, functional and psychological terms.
Determinants of CRM In addition to trust and value, salespeople must: Understand customer needs and problems; Meet their commitments; Provide superior after sales support; Make sure that the customer is always told the truth (must be honest); and Have a passionate interest in establishing and retaining a longterm relationship (e.g., have long-term perspective).
Class Exercise
What should the focus and main activities of a global salesperson be in each stage of the relationship development process? Why? (Please justify your answer)
Functions of Customer Relationship Management Direct functions (are the basic requirements of a company that are necessary to survive in the competitive marketplace) Profit; Volume; and Safeguard Indirect functions (are the actions necessary to convince the customer to participate in various marketing activities). Innovation: Market; Scout: and Access.
Salespeople by:
identifying potential customers and their needs; approaching key decision makers in the buying firm; negotiating and advancing dialogue and mutual trust; coordinating the cooperation between the customers and their company; encouraging the inter-organisational learning process; contributing to constructive resolution of existing conflicts; and leading the customer relationship development team are the individuals in any organisation who act both as relationship builders and as relationship promoters.
Relationship marketing inputs Understanding customer expectations Building service partnerships Empowering employees Total quality management
Relationship marketing outcomes Customer Satisfaction Customer loyalty Quality products Increased profitability Assessment state Customer feedback Integration
(Evans and Luskin, 1994)
Independence
Relative influence
Initiating the relationship Engage in strategic prospecting and qualifying; Gather and study pre-call information; Identify buying influences; Plan the initial sales call; Demonstrate an understanding of the customers needs; Identify opportunities to build a relationship; and Illustrate the value of a relationship with the customer
Developing the relationship Select an appropriate offering; Customise the relationship; Link the solutions with the customers needs; Discuss customer concerns; Summarize the solution to confirm benefits; and Secure commitment.
Enhancing the relationship Assess customer satisfaction; Take action to ensure satisfaction;
Relationship networks The ultimate outcome of a successful CRM strategy is the creation of a unique company asset known as a relationship network. A relationship network consists of the company and its major customers with whom the company has established long and enduring business relationships. The additional aspects of a global salespersons job are to: Manage customer value; Act as customer advocate; and Enhance customer loyalty and build a health and profitable network of relationships.
Summary CRM is a new business philosophy based on trust and value; The core function of CRM is the value creation process; Customer relationships develop over time; The role of global salespeople in the process is that of both relationship builders and relationship promoters; and The basic premise of CRM is to offer superior value to customers in an effort to turn prospects into customers, customers into loyal customers, and loyal customers into partners.