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C CH HA AP PT TE ER R : : 1 1 I IN NT TR RO OD DU UC CT TI IO ON N T TO O C CR RM M
1 1. .1 1 I IN NT TR RO OD DU UC CT TI IO ON N
I In n t th he e r re ec ce en nt t y ye ea ar rs s, , i it t h ha as s b be ee en n o ob bs se er rv ve ed d t th ha at t f fo or r a an ny y b bu us si in ne es ss s g gi ia an nt t t to o h ha av ve e m ma ax xi im mu um m m ma ar rk ke et t s sh ha ar re e
r re eq qu ui ir re es s s so om me et th hi in ng g m mo or re e t th ha an n t te ec ch hn no ol lo og gy y, , i in nn no ov va at ti io on n, , c ca ap pi it ta al l. . I It t h ha as s b be ee en n s se ee en n t th ha at t t th he e c co om mp pa an ny y f fi ir rs st t
t tr ri ie es s t to o b be e m ma ar rk ke et t f fa av vo or ri it te e a an nd d t th he en n h he ea ad ds s o on n t to o b be e t th he e m ma ar rk ke et t l le ea ad de er r. . T Th he e k ke ey y w wh hi ic ch h t ta ak ke es s t th he e s sh ha ar re e
p pr ri ic ce e o of f t th he e c co om mp pa an ny y a at t t to op p m mo os st t l le ev ve el l i is s t th he e c cu us st to om me er r. .
O On nc ce e b be ea au ut ti if fu ul ll ly y q qu uo ot te ed d b by y M Ma ah ha at tm ma a G Ga an nd dh hi i c cu us st to om me er r i is s t th he e m mo os st t i im mp po or rt ta an nt t p pe er rs so on n f fo or r a a b bu us si in ne es ss s. .
H He e i is s n no ot t a an n i in nt te er rr ru up pt ti io on n t to o o ou ur r w wo or rk k b bu ut t t th he e p pu ur rp po os se e o of f i it t. . H He e i is s n no ot t a an n o ou ut ts si id de er r; ; h he e i is s a a p pa ar rt t o of f i it t. . W We e
a ar re e n no ot t d do oi in ng g h hi im m a a f fa av vo ou ur r; ; h he e i is s d do oi in ng g u us s a a f fa av vo ou ur r b by y g gi iv vi in ng g u us s a an n o op pp po or rt tu un ni it ty y t to o s se er rv ve e h hi im m . .
M Ma an ny y o or rg ga an ni iz za at ti io on ns s h ha av ve e r re ea al li iz ze ed d t th ha at t t to o s su us st ta ai in n i in n t th he e m ma ar rk ke et t t th he ey y h ha av ve e t to o d do o m mo or re e t th ha an n s se el ll li in ng g o of f
t th he ei ir r p pr ro od du uc ct t. . F Fo or r t th hi is s t th he e o on nl ly y m ma an nt tr ra a i is s t to o p pr ro ov vi id de e c cu us st to om mi iz ze ed d a an nd d p pe er rs so on na al li iz ze ed d s se er rv vi ic ce es s t to o
c cu us st to om me er rs s, , w wh hi ic ch h i in n m ma an na ag ge em me en nt t i is s a al ls so o k kn no ow wn n a as s p pr ra at ti ic ci is si in ng g c cu us st to om me er r r re el la at ti io on ns sh hi ip p m ma an na ag ge em me en nt t . .
T Th hi is s c co on nc ce ep pt t i is s t tr re em me en nd do ou us sl ly y g ga ai in ni in ng g i im mp po or rt ta an nc ce e i in n c co or rp po or ra at te e c ci ir rc cl le es s a an nd d i is s e em me er rg gi in ng g a as s t th he e b bu us si in ne es ss s
t th he em me e f fo or r t th he e 2 21 1s st t c ce en nt tu ur ry y. .
Relationship Marketing
The concept of relationship marketing has emerged within the fields of service
marketing and industrial marketing. From the start service companies based their marketing on
the marketing mix paradigm. The marketing mix, which consists of the 4Ps(product, price, place
and promotion), has dominated the marketing research The concept emerges from the idea of the
marketer as a offers competitive. However, within the field of services the marketing mix showed to
have several disadvantages. This was made clear since the characteristics of services differ
noticeably from the characteristics of commodities. Often services are intangible and
consequently hard to demonstrate and its therefore difficult to estimate their value. In addition they
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normally require some kind of interaction between the seller and the customer during the
production of the service.

Fundamental Values of Relationship Marketing
According to Gummesson (2002) there are four fundamental values of Relationship
Marketing. Firstly, marketing management should be broadened into marketing-oriented company
management. This means that there must be a marketing orientation of the whole company;
marketing should not be an activity of a specialized department. Secondly, Relationship
Marketing emphasizes on long-term collaboration and win-win attitude. A company should view
their suppliers, customers and other parties as partners, where the goal is to create a mutual value.
The relationship must be meaningful for all those involved, with the purpose of retaining long-
term relationships with existing parties. Another fundamental value of Relationship Marketing is
that all parties should be active and take responsibility. The relationship should be interactive.

1 1. .2 2 W WH HA AT T I IS S C CU US ST TO OM ME ER R R RE EL LA AT TI IO ON NS SH HI IP P M MA AN NA AG GE EM ME EN NT T? ?
I In n m ma ar rk ke et ti in ng g l li it te er ra at tu ur re e, , t th he e t te er rm m c cu us st to om me er r r re el la at ti io on ns sh hi ip p m ma an na ag ge em me en nt t a an nd d r re el la at ti io on ns sh hi ip p m ma ar rk ke et ti in ng g a ar re e
u us se ed d i in nt te er rc ch ha an ng ge ea ab bl ly y. . C CR RM M s st ta ar rt ts s w wi it th h i in n d de ep pt t k kn no ow wl le ed dg ge e o of f c cu us st to om me er rs s, , t th he ei ir r h ha ab bi it ts s, , d de es si ir re es s a an nd d t th he ei ir r
n ne ee ed ds s b by y a an na al ly yz zi in ng g t th he ei ir r c co og gn ni it ti iv ve e, , e ef ff fe ec ct ti iv ve e b be eh ha av vi io or r a an nd d a at tt tr ri ib bu ut te es s. . C CR RM M a ap pp pl li ie es s t th hi is s k kn no ow wl le ed dg ge e t to o
d de ev ve el lo op p a an nd d d de es si ig gn n m ma ar rk ke et ti in ng g s st tr ra at te eg gi ie es s, , t to o c cu ul lt ti iv va at te e l lo on ng g l la as st ti in ng g m mu ut tu ua al ll ly y b be en ne ef fi ic ci ia al l i in nt te er ra ac ct ti io on n a an nd d
r re el la at ti io on ns sh hi ip p w wi it th h t th he e c cu us st to om me er r. .
E Ev ve er ry y o or rg ga an ni iz za at ti io on n s sh ho ou ul ld d r re em me em mb be er r t th ha at t y yo ou u a ar re e n no ot t i in n a a b bu us si in ne es ss s t to o d de el li ig gh ht t
c cu us st to om me er rs s. . Y Yo ou u a ar re e i in n a a b bu us si in ne es ss s t to o b be e d de el li ig gh ht te ed d b by y t th he em m . .
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C CR RM M i is s a a b bu us si in ne es ss s s st tr ra at te eg gy y t th ha at t c ca an n h he el lp p o or rg ga an ni iz za at ti io on ns s d dr ri iv ve e n ne ew w g gr ro ow wt th h, , a at tt ta ai in n o op pe er ra at ti io on na al l
e ex xc ce el ll le en nc ce e, , a an nd d g ga ai in n c co om mp pe et ti it ti iv ve e a ag gi il li it ty y. . T Th he e c co or re e t th he em me e o of f a al ll l C CR RM M a an nd d r re el la at ti io on ns sh hi ip p m ma ar rk ke et ti in ng g
p pe er rs sp pe ec ct ti iv ve es s i is s i it ts s f fo oc cu us s o on n c co o- -o op pe er ra at ti iv ve e a an nd d c co ol ll la ab bo or ra at ti iv ve e r re el la at ti io on ns sh hi ip ps s b be et tw we ee en n t th he e f fi ir rm m a an nd d i it ts s
c cu us st to om me er rs s. . C CR RM M i is s b ba as se ed d o on n t th he e p pr re em mi is se e t th ha at t, , b by y h ha av vi in ng g a a b be et tt te er r u un nd de er rs st ta an nd di in ng g o of f t th he e c cu us st to om me er rs s
n ne ee ed ds s a an nd d d de es si ir re es s w we e c ca an n k ke ee ep p t th he em m l lo on ng ge er r a an nd d s se el ll l m mo or re e t to o t th he em m. . C CR RM M i is sn n t t n ne ew w; ; e ev ve er ry y c co om mp pa an ny y
n ne ee ed ds s t to o d do o C CR RM M- -o on ne e w wa ay y o or r a an no ot th he er r. . N No o m ma at tt te er r w wh ha at t t th he e b bu us si in ne es ss s, , e ev ve er ry y c co om mp pa an ny y h ha as s t to o m ma ak ke e i it ts s
p pr ro od du uc ct t k kn no ow wn n t to o t th he e m ma ar rk ke et t a an nd d f fi in nd d c cu us st to om me er rs s w wh ho o a ar re e w wi il ll li in ng g t to o b bu uy y i it ts s p pr ro od du uc ct ts s i in n o or rd de er r t to o s st ta ay y
i in n b bu us si in ne es ss s. . E Ev ve er ry y c co om mp pa an ny y m mu us st t d di is sc co ov ve er r c cu us st to om me er r n ne ee ed ds s, , m ma ar rk ke et t a an nd d s se el ll l t th he e p pr ro od du uc ct ts s t th ha at t m me ee et t
t th he es se e n ne ee ed ds s, , p pr ro ov vi id de e s so om me e s so or rt t o of f c cu us st to om me er r s se er rv vi ic ce e a an nd d m ma ak ke e s su ur re e t th he e r re ev ve en nu ue e i it t g ge en ne er ra at te es s c co ov ve er rs s t th he e
c co os st t o of f b bu us si in ne es ss s p pl lu us s a an ny y p pr ro of fi it t m ma ar rg gi in n i it t t tr ri ie es s t to o a ac ch hi ie ev ve e. . O On nc ce e a a b bu us si in ne es ss s o or rg ga an ni iz za at ti io on n s se el le ec ct ts s i it ts s
t ta ar rg ge et t m ma ar rk ke et t, , i it t h ha as s t to o c co ol ll le ec ct t c cu us st to om me er r d da at ta ab ba as se e a an nd d d de ev ve el lo op p c cu us st to om me er r p pr re ef fe er re en nc ce e. . T Th he e r re el la at ti io on ns sh hi ip p
c ca an nn no ot t b be e a a o on ne e s si id de ed d a ap pp pr ro oa ac ch h. . I It t s sh ho ou ul ld d i in nv vo ol lv ve e t th he e o ot th he er r s si id de e e eq qu ua al ll ly y w wi it th h v va al lu ue e s sh ha ar ri in ng g
p pr ro op po os si it ti io on n. . H He en nc ce e, , C CR RM M i is s d de ev ve el lo op pm me en nt t o of f l la as st ti in ng g s st tr ra at te eg gi ic c a al ll li ia an nc ce es s w wi it th h c cu us st to om me er rs s o on n a a v va al lu ue e
s sh ha ar ri in ng g b ba as si is s. . T Th hi is s i im mp pl li ie es s f fu ut tu ur re e o or ri ie en nt ta at ti io on n a an nd d a a w wi in n- -w wi in n p pr ro op po os si it ti io on n b be et tw we ee en n t th he e s se el ll le er r a an nd d t th he e
c cu us st to om me er r. .R Re el la at ti io on ns sh hi ip p m ma ar rk ke et ti in ng g i is s a a p ph hi il lo os so op ph hy y o of f d do oi in ng g b bu us si in ne es ss s o on n s st tr ra at te eg gi ic c o or ri ie en nt ta at ti io on n t th ha at t
f fo oc cu us se es s o on n k ke ee ep pi in ng g a an nd d i im mp pr ro ov vi in ng g c cu ur rr re en nt t i in nt te er ra ac ct ti io on ns s w wi it th h t th he e p pa ar rt ti ie es s c co on nc ce er rn ne ed d r ra at th he er r t th ha an n
a ac cq qu ui ir ri in ng g n ne ew w p pa ar rt ti ie es s. . T Th he e p ph hi il lo os so op ph hy y h ha as s a an n u un nd de er rl ly yi in ng g a as ss su um mp pt ti io on n t th ha at t t th he e c cu us st to om me er rs s p pr re ef fe er r t to o
h ha av ve e a an n o on ng go oi in ng g r re el la at ti io on ns sh hi ip p w wi it th h a an n o or rg ga an ni iz za at ti io on n t th ha an n t to o s sw wi it tc ch h c co on nt ti in nu ua al ll ly y i in n s se ea ar rc ch h f fo or r v va al lu ue es s. . I It t i is s
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u un nd do ou ub bt te ed dl ly y a a s sl lo ow w a an nd d a a c co on nt ti in nu uo ou us s a ap pp pr ro oa ac ch h o of f a an n o or rg ga an ni iz za at ti io on n t to o b be ec co om me e m ma ar rk ke et t f fa av vo ou ur ri it te e a an nd d
i in nc cr re ea as se e i it ts s c cu us st to om me er r b ba as se e. .
H He en nc ce e, , C CR RM M c cy yc cl le e c ca an n b be e d de es sc cr ri ib be ed d a as s f fo ol ll lo ow ws s: :
A Ac cq qu ui ir ri in ng g c cu us st to om me er rs s
K Ke ee ep pi in ng g c cu us st to om me er rs s
G Gr ro ow wi in ng g y yo ou ur r c cu us st to om me er rs s
G Ga ai in ni in ng g c cu us st to om me er r i in ns si ig gh ht t
I In nt te er ra ac ct ti in ng g w wi it th h y yo ou ur r c cu us st to om me er rs s a ac cr ro os ss s a al ll l t to ou uc ch h p po oi in nt ts s
B Bu ui il ld di in ng g l la as st ti in ng g r re el la at ti io on ns sh hi ip ps s w wi it th h y yo ou ur r c cu us st to om me er rs s
D De el li iv ve er ri in ng g v va al lu ue e t to o y yo ou ur r c cu us st to om me er rs s
A Ac ch hi ie ev vi in ng g a a s su us st ta ai in na ab bl le e c co om mp pe et ti it ti iv ve e a ad dv va an nt ta ag ge e
G Gr ro ow wi in ng g y yo ou ur r b bu us si in ne es ss s
T Th he es se e p pa ar ra am me et te er rs s a ar re e i in nt te eg gr ra at te ed d t to og ge et th he er r t to o a ac ch hi ie ev ve e o on ne e g go oa al l f fo or r o or rg ga an ni iz za at ti io on n i i. .e e. .: :- - t to o e es st ta ab bl li is sh h a an nd d
m ma an na ag ge e l lo on ng g t te er rm m m mu ut tu ua al ll ly y b be en ne ef fi ic ci ia al l r re el la at ti io on ns sh hi ip ps s w wi it th h c cu ur rr re en nt t a an nd d p pr ro os sp pe ec ct ti iv ve e c cu us st to om me er rs s. . I In nf fa ac ct t
s su uc cc ce es ss sf fu ul l c co om mp pa an ni ie es s b bu ui il ld d t th he ei ir r b bu us si in ne es ss s a ar ro ou un nd d t th he ei ir r c cu us st to om me er rs s. . T Th he ey y s st tr ri iv ve e t to o b be ec co om me e f fu ul ll ly y
c cu us st to om me er r d dr ri iv ve en n, , d de el li iv ve er ri in ng g s su up pe er ri io or r c cu us st to om me er r v va al lu ue e a an nd d c co on ns si is st te en nt tl ly y p pr ro ov vi id di in ng g e ex xc ce ep pt ti io on na al l c cu us st to om me er r
s se er rv vi ic ce e. .
T To om m P Pe et te er rs s s st ta at te ed d l li is st te en ni in ng g t to o c cu us st to om me er rs s m mu us st t b be ec co om me e e ev ve er ry yo on ne e s s b bu us si in ne es ss s. . W Wi it th h m mo os st t
c co om mp pe et ti it to or rs s m mo ov vi in ng g e ev ve er r f fa as st te er r, , t th he e r ra ac ce e w wi il ll l g go o t to o t th ho os se e w wh ho o l li is st te en n a an nd d r re es sp po on nd d i in nt te en nt tl ly y . .

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1 1. .3 3 D DE EF FI IN NI IT TI IO ON N O OF F C CU US ST TO OM ME ER R R RE EL LA AT TI IO ON NS SH HI IP P M MA AN NA AG GE EM ME EN NT T
T Th he er re e a ar re e v va ar ri io ou us s d de ef fi in ni it ti io on ns s o of f c cu us st to om me er r r re el la at ti io on ns sh hi ip p m ma an na ag ge em me en nt t s st ta at te ed d b by y m ma an ny y e ex xp pe er rt ts s o ov ve er r t th he e
y ye ea ar rs s. .
B Be er rr ry y d de ef fi in ne ed d C CR RM M a as s r re el la at ti io on ns sh hi ip p m ma ar rk ke et ti in ng g i is s a at tt tr ra ac ct ti in ng g, , m ma ai in nt ta ai in ni in ng g a an nd d e en nh ha an nc ci in ng g c cu us st to om me er r
r re el la at ti io on ns sh hi ip ps s. .
S Sh ha an ni i a an nd d C Ch ha al ls sa an ni i a al ls so o i in n 1 19 99 92 2 d de ef fi in ne ed d r re el la at ti io on ns sh hi ip p m ma ar rk ke et ti in ng g ( (C CR RM M) ) a as s a an n i in nt te eg gr ra at te ed d e ef ff fo or rt t t to o
m ma ai in nt ta ai in n a an nd d b bu ui il ld d u up p a a n ne et tw wo or rk k w wi it th h t th he e i in nd di iv vi id du ua al l c co on ns su um me er rs s a an nd d t to o c co on nt ti in nu uo ou us sl ly y s st tr re en ng gt th he en n t th he e
n ne et tw wo or rk k f fo or r m mu ut tu ua al l b be en ne ef fi it ts s o of f b bo ot th h t th he e s si id de es s, , t th hr ro ou ug gh h i in nt te er ra ac ct ti iv ve e, , i in nd di iv vi id du ua al li iz ze ed d a an nd d v va al lu ue e a ad dd de ed d
c co on nt ta ac ct ts s o ov ve er r a a l lo on ng g p pe er ri io od d o of f t ti im me e . .
P Pe ep pp pe er rs s a an nd d R Ro og ge er rs s i in n 1 19 99 93 3 g ga av ve e a a r re ec ce en nt t t te ec ch hn no ol lo og gy y b ba as se ed d a ap pp pr ro oa ac ch h i in n w wh hi ic ch h t th he ey y h ha av ve e s sa ai id d, , C CR RM M
i is s t to o f fo oc cu us s o on n a an n i in nd di iv vi id du ua al l o or r o on ne e- -t to o- -o on ne e r re el la at ti io on ns sh hi ip p w wi it th h t th he e c cu us st to om me er rs s t th ha at t i in nt te eg gr ra at te e d da at ta ab ba as se e
k kn no ow wl le ed dg ge e w wi it th h l lo on ng g t te er rm m c cu us st to om me er r r re et te en nt ti io on n a an nd d t th he e g gr ro ow wt th h s st tr ra at te eg gy y . .
F Fr ro om m t th he e a ab bo ov ve e d de ef fi in ni it ti io on ns s w we e c ca an n a ar rr ri iv ve e a at t o on ne e s su ui it ta ab bl le e d de ef fi in ni it ti io on n, , w wh hi ic ch h i is s c cu us st to om me er r
r re el la at ti io on ns sh hi ip p m ma an na ag ge em me en nt t i is s a a c co om mp pr re eh he en ns si iv ve e s st tr ra at te eg gy y a an nd d t th he e p pr ro oc ce es ss s o of f a ac cq qu ui ir ri in ng g, , r re et ta ai in ni in ng g a an nd d
p pa ar rt tn ne er ri in ng g w wi it th h s se el le ec ct ti iv ve e c cu us st to om me er rs s t to o c cr re ea at te e s su up pe er ri io or r v va al lu ue e f fo or r t th he e c co om mp pa an ny y a an nd d t th he e c cu us st to om me er r . .





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1 1. .4 4 H HI IS ST TO OR RY Y O OF F C CR RM M
L Lo oo ok ki in ng g b ba ac ck k a at t t th he e s sn na ap ps sh ho ot t h hi is st to or ry y o of f m ma ar rk ke et ti in ng g, , w we e c ca an n s se ee e t th he e f fo ol ll lo ow wi in ng g c cl le ea ar r d de ev ve el lo op pm me en nt ts s a an nd d
p pr ro og gr re es ss si io on n o ov ve er r t th he e l la as st t f fo ou ur r d de ec ca ad de es s: :- -
1 19 96 60 0 T Th he e e er ra a o of f M Ma as ss s M Ma ar rk ke et ti in ng g w wh he en n G Gi ib bb bs s S SR R t to oo ot th hp pa as st te e b be eg ga an n t th he e f fi ir rs st t m ma ar rk ke et ti in ng g o of f i it ts s
k ki in n w wi it th h i it ts s b bl la ac ck k a an nd d w wh hi it te e T TV V c ca am mp pa ai ig gn n. .
1 19 97 70 0 S Sa aw w t th he e b be eg gi in nn ni in ng g o of f s se eg gm me en nt ta at ti io on n, , d di ir re ec ct t m ma ai il l c ca am mp pa ai ig gn ns s a an nd d e ea ar rl ly y t te el le e- -m ma ar rk ke et ti in ng g. .
1 19 98 80 0 W Wh he er re e N Ni ic ch he e M Ma ar rk ke et ti in ng g m ma ad de e m mi il ll li io on na ai ir re es s o of f t th ho os se e w wh ho o w we er re e b be es st t a at t i it t. .
1 19 99 90 0 - - R Re el la at ti io on ns sh hi ip p M Ma ar rk ke et ti in ng g. . T Th he e e ex xp pl lo os si io on n o of f t te el le em ma ar rk ke et ti in ng g a an nd d c ca al ll lc ce en nt tr re es s a al ll l s se et t u up p t to o
d de ev ve el lo op p r re el la at ti io on ns sh hi ip p w wi it th h c cu us st to om me er rs s. . T Th he e r re ec co og gn ni it ti io on n o of f t th he e t tr ru ue e v va al lu ue e o of f r re et te en nt ti io on n a an nd d t th he e u us se e o of f
l li if fe et ti im me e v va al lu ue e a as s a a b bu us si in ne es ss s c ca as se e. .
I In n a ad dd di it ti io on n t to o t th hi is s, , a a n nu um mb be er r o of f k ke ey y m ma ar rk ke et ti in ng g c co on nc ce ep pt ts s c ca an n a al ls so o b be e u us se ed d t to o s se ee e w wh he er re e
C CR RM M h ha as s d de ev ve el lo op pe ed d f fr ro om m: :- -
S Sa at ti is sf fa ac ct ti io on n n ne ee ed ds s c cu us st to om me er r o or ri ie en nt ta at ti io on n. .
T Th he e o or rg ga an ni iz za at ti io on n n ne ee ed ds s t to o b be e a ar rr ra an ng ge ed d s so o t th ha at t a al ll l f fu un nc ct ti io on ns s c co on nt tr ri ib bu ut te e. .
P Pr ro of fi it t m mu us st t b be e t th he e c co on ns se eq qu ue en nc ce e o of f d de el li ig gh ht ti in ng g c cu us st to om me er rs s. .





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1 1. .5 5 E EV VO OL LU UT TI IO ON N O OF F C CR RM M
I In n r re ec ce en nt t y ye ea ar rs s h ho ow we ev ve er r, , s se ev ve er ra al l f fa ac ct to or rs s h ha av ve e c co on nt tr ri ib bu ut te ed d t to o t th he e r ra ap pi id d d de ev ve el lo op pm me en nt t a an nd d e ev vo ol lu ut ti io on n o of f
C CR RM M. . T Th he es se e i in nc cl lu ud de e: : - -
1 1. . T Th he e g gr ro ow wi in ng g d de e- -i in nt te er rm me ed di ia at ti io on n p pr ro oc ce es ss s i in n m ma an ny y i in nd du us st tr ri ie es s d du ue e t to o t th he e a ad dv ve en nt t o of f s so op ph hi is st ti ic ca at te ed d
c co om mp pu ut te er r a an nd d t te el le ec co om mm mu un ni ic ca at ti io on n t te ec ch hn no ol lo og gi ie es s t th ha at t a al ll lo ow w p pr ro od du uc ce er rs s t to o d di ir re ec ct tl ly y i in nt te er ra ac ct t w wi it th h e en nd d- -
c cu us st to om me er rs s. . F Fo or r e ex xa am mp pl le e, , i in n m ma an ny y i in nd du us st tr ri ie es s s su uc ch h a as s a ai ir rl li in ne es s, , b ba an nk ks s i in ns su ur ra an nc ce e, , s so of ft tw wa ar re e o or r h ho ou us se eh ho ol ld d
a ap pp pl li ia an nc ce es s a an nd d e ev ve en n c co on ns su um ma ab bl le es s, , t th he e d de e- -i in nt te er rm me ed di ia at ti io on n p pr ro oc ce es ss s i is s f fa as st t c ch ha an ng gi in ng g t th he e n na at tu ur re e o of f
m ma ar rk ke et ti in ng g a an nd d c co on ns se eq qu ue en nt tl ly y m ma ak ki in ng g r re el la at ti io on ns sh hi ip p m ma ar rk ke et ti in ng g m mo or re e p po op pu ul la ar r. . D Da at ta ab ba as se es s a an nd d d di ir re ec ct t
m ma ar rk ke et ti in ng g t to oo ol ls s g gi iv ve e t th he em m t th he e m me ea an ns s t to o i in nd di iv vi id du ua al li iz ze e t th he ei ir r m ma ar rk ke et ti in ng g e ef ff fo or rt ts s. .
2 2. . A Ad dv va an nc ce es s i in n i in nf fo or rm ma at ti io on n t te ec ch hn no ol lo og gy y, , n ne et tw wo or rk ki in ng g a an nd d m ma an nu uf fa ac ct tu ur ri in ng g t te ec ch hn no ol lo og gy y h ha av ve e h he el lp pe ed d
c co om mp pa an ni ie es s t to o q qu ui ic ck kl ly y m ma at tc ch h c co om mp pe et ti it ti io on n. . A As s a a r re es su ul lt t p pr ro od du uc ct t q qu ua al li it ty y a an nd d c co os st t a ar re e n no o l lo on ng ge er r
s si ig gn ni if fi ic ca an nt t c co om mp pe et ti it ti iv ve e a ad dv va an nt ta ag ge es s. .
3 3. . T Th he e g gr ro ow wt th h i in n s se er rv vi ic ce e e ec co on no om my y. . S Si in nc ce e s se er rv vi ic ce es s a ar re e t ty yp pi ic ca al ll ly y p pr ro od du uc ce ed d a an nd d d de el li iv ve er re ed d a at t t th he e s sa am me e
i in ns st ti it tu ut ti io on n, , i it t m mi in ni im mi iz ze es s t th he e r ro ol le e o of f t th he e m mi id dd dl le em me en n. .
4 4. . A An no ot th he er r f fo or rc ce e d dr ri iv vi in ng g t th he e a ad do op pt ti io on n o of f C CR RM M h ha as s b be ee en n t th he e t to ot ta al l q qu ua al li it ty y m mo ov ve em me en nt t. . W Wh he en n c co om mp pa an ni ie es s
e em mb br ra ac ce ed d T TQ QM M i it t b be ec ca am me e n ne ec ce es ss sa ar ry y t to o i in nv vo ol lv ve e c cu us st to om me er rs s a an nd d s su up pp pl li ie er rs s i in n i im mp pl le em me en nt ti in ng g t th he e p pr ro og gr ra am m
a at t a al ll l l le ev ve el ls s o of f t th he e v va al lu ue e c ch ha ai in n. . T Th hi is s n ne ee ed de ed d c cl lo os se e w wo or rk ki in ng g r re el la at ti io on ns sh hi ip ps s w wi it th h t th he e c cu us st to om me er rs s. . T Th hu us s
s se ev ve er ra al l c co om mp pa an ni ie es s s su uc ch h a as s M Mo ot to or ro ol la a, , I IB BM M, , G Ge en ne er ra al l M Mo ot to or rs s, , X Xe er ro ox x, , F Fo or rd d, , T To oy yo ot ta a, , e et tc c f fo or rm me ed d
p pa ar rt tn ne er ri in ng g r re el la at ti io on ns s w wi it th h s su up pp pl li ie er rs s a an nd d c cu us st to om me er rs s t to o p pr ra ac ct ti ic ce e T TQ QM M. .
5 5. . C Cu us st to om me er r e ex xp pe ec ct ta at ti io on ns s a ar re e c ch ha an ng gi in ng g a al lm mo os st t o on n a a d da ai il ly y b ba as si is s. . N Ne ew wl ly y E Em mp po ow we er re ed d c cu us st to om me er rs s w wh ho o
c ch ho oo os se e h ho ow w t to o c co om mm mu un ni ic ca at te e w wi it th h t th he e c co om mp pa an ni ie es s a ac cr ro os ss s v va ar ri io ou us s a av va ai il la ab bl le e c ch ha an nn ne el ls s. . A Al ls so o n no ow wa ad da ay ys s
c co on ns su um me er rs s e ex xp pe ec ct t a a h hi ig gh h d de eg gr re ee e o of f p pe er rs so on na al li iz za at ti io on n. .
8

6 6. . E Em me er rg gi in ng g r re ea al l t ti im me e, , i in nt te er ra ac ct ti iv ve e c ch ha an nn ne el ls s i in nc cl lu ud di in ng g e e- -m ma ai il l, , A AT TM Ms s a an nd d c ca al ll l c ce en nt tr re e t th ha at t m mu us st t b be e
s sy yn nc ch hr ro on ni iz ze ed d w wi it th h c cu us st to om me er r s s n no on n- -e el le ec ct tr ro on ni ic c a ac ct ti iv vi it ti ie es s. . T Th he e s sp pe ee ed d o of f b bu us si in ne es ss s c ch ha an ng ge e, , r re eq qu ui ir ri in ng g
f fl le ex xi ib bi il li it ty y a an nd d r ra ap pi id d a ad do op pt ti io on n t to o t te ec ch hn no ol lo og gi ie es s. .
7 7. . I In n t th he e c cu ur rr re en nt t e er ra a o of f h hy yp pe er r c co om mp pe et ti it ti io on n, , m ma ar rk ke et te er rs s a ar re e f fo or rc ce ed d t to o b be e m mo or re e c co on nc ce er rn ne ed d w wi it th h c cu us st to om me er r
r re et te en nt ti io on n a an nd d c cu us st to om me er r l lo oy ya al lt ty y. .
8 8. . A As s s se ev ve er ra al l r re es se ea ar rc ch he es s h ha av ve e f fo ou un nd d o ou ut t r re et ta ai in ni in ng g c cu us st to om me er rs s i is s l le es ss s e ex xp pe en ns si iv ve e a an nd d m mo or re e s su us st ta ai in na ab bl le e
c co om mp pe et ti it ti iv ve e a ad dv va an nt ta ag ge e t th ha an n a ac cq qu ui ir ri in ng g n ne ew w o on ne es s. .
9 9. . O On n t th he e s su up pp pl ly y s si id de e i it t p pa ay ys s m mo or re e t to o d de ev ve el lo op p c cl lo os se er r r re el la at ti io on ns sh hi ip ps s w wi it th h a a f fe ew w s su up pp pl li ie er rs s t th ha an n t to o
d de ev ve el lo op p m mo or re e v ve en nd do or rs s. .
1 10 0. . I In n a ad dd di it ti io on n s se ev ve er ra al l m ma ar rk ke et te er rs s a ar re e c co on nc ce er rn ne ed d w wi it th h k ke ee ep pi in ng g c cu us st to om me er rs s f fo or r l li if fe e t th ha an n m ma ak ki in ng g o on ne e t ti im me e
s sa al le e. . T Th he er re e i is s a a g gr re ea at te er r o op pp po or rt tu un ni it ty y f fo or r u up p s se el ll li in ng g a an nd d c cr ro os ss s s se el ll li in ng g. . I In n a a r re ec ce en nt t s st tu ud dy y i in n 1 19 99 99 9 i it t w wa as s
f fo ou un nd d t th ha at t r re el la at ti io on na al l i in nt te en ns si it ty y i in nc cr re ea as se ed d i in n h ho os sp pi it ta al ls s f fa ac ci in ng g a a h hi ig gh h d de eg gr re ee e o of f c co om mp pe et ti it ti iv ve e i in nt te en ns si it ty y
1 11 1. . T Th he e g gl lo ob ba al li iz za at ti io on n o of f w wo or rl ld d m ma ar rk ke et tp pl la ac ce e m ma ak ke es s i it t n ne ec ce es ss sa ar ry y t to o h ha av ve e g gl lo ob ba al l a ac cc co ou un nt t m ma an na ag ge em me en nt t
f fo or r t th he e c cu us st to om me er rs s. .







9

C CH HA AP PT TE ER R 2 2: : C CO ON NC CE EP PT T O OF F C CR RM M
2 2. .1 1 C CO OM MP PO ON NE EN NT TS S O OF F C CR RM M
CRM consists of three components:


1).
CRM tries to achieve a single integrated view of customers and a customercentric
approach [Roberts-Witt, 2000].







W Wh ho o i is s a a C Cu us st to om me er r? ?
A A c cu us st to om me er r r re ef fe er rs s t to o i in nd di iv vi id du ua al ls s o or r h ho ou us se eh ho ol ld ds s t th ha at t p pu ur rc ch ha as se e g go oo od ds s a an nd d s se er rv vi ic ce es s g ge en ne er ra at te ed d w wi it th hi in n
t th he e e ec co on no om my y. . T Th he e w wo or rd d h hi is st to or ri ic ca al ll ly y d de er ri iv ve es s f fr ro om m " "c cu us st to om m, ," " m me ea an ni in ng g " "h ha ab bi it t" "; ; a a c cu us st to om me er r w wa as s
s so om me eo on ne e w wh ho o f fr re eq qu ue en nt te ed d a a p pa ar rt ti ic cu ul la ar r s sh ho op p, , w wh ho o m ma ad de e i it t a a h ha ab bi it t t to o p pu ur rc ch ha as se e g go oo od ds s f fr ro om m t th he er re e a an nd d
w wi it th h w wh ho om m t th he e s sh ho op pk ke ee ep pe er r h ha ad d t to o m ma ai in nt ta ai in n a a r re el la at ti io on ns sh hi ip p t to o k ke ee ep p h hi is s o or r h he er r " "c cu us st to om m, ," " m me ea an ni in ng g
e ex xp pe ec ct te ed d p pu ur rc ch ha as se es s i in n t th he e f fu ut tu ur re e. . T Th he er re e i is s a a d di if ff fe er re en nc ce e b be et tw we ee en n c cu us st to om me er r a an nd d a a c co on ns su um me er r. . A A
CUSTOMER

MANAGEMENT RELATIONSHIP

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c co on ns su um me er r i is s a al lw wa ay ys s a a c cu us st to om me er r b bu ut t a a c cu us st to om me er r i is s n no ot t n ne ec ce es ss sa ar ri il ly y a a c co on ns su um me er r. . A A c cu us st to om me er r c ca an n b be e a a
m me ed di iu um m b be et tw we ee en n a a g go oo od ds s m ma an nu uf fa ac ct tu ur re er r a an nd d/ /o or r a a s se er rv vi ic ce e p pr ro ov vi id de er r a an nd d t th he e e en nd d u us se er r E E. .g g. . A A p pe er rs so on n w wh ho o
p pu ur rc ch ha as se es s a a c ch ho oc co ol la at te e f fr ro om m a a r re et ta ai il l s sh ho op p i is s a a c co on ns su um me er r w wh ho o i is s a al ls so o a a c cu us st to om me er r b bu ut t t th he e s sa am me e r re et ta ai il l
s sh ho op p o ow wn ne er r w wh he en n p pu ur rc ch ha as se es s i it t f fr ro om m t th he e w wh ho ol le es sa al le er r o or r m ma an nu uf fa ac ct tu ur re er r i is s j ju us st t a a c cu us st to om me er r a an nd d n no ot t a a
c co on ns su um me er r b be ec ca au us se e h he e n ne ev ve er r c co on ns su um me es s t th he e c ch ho oc co ol la at te e. . C Cu us st to om me er r w wh ho o w wa as s c co on ns si id de er re ed d t to o b be e t th he e k ki in ng g o of f
m ma ar rk ke et t i is s n no ow w r re eg ga ar rd de ed d a as s t th he e e em mp pe er ro or r o of f m ma ar rk ke et t. . S Si in nc ce e a al ll l t th he e o or rg ga an ni iz za at ti io on ns s h ha av ve e t th he e s sa am me e
t te ec ch hn no ol lo og gy y a an nd d m mo or re e o or r l le es ss s t th he e s sa am me e p pr ri ic ce e o of ff fe er ri in ng g, , i it t i is s o on nl ly y t th he e c cu us st to om me er r s s l lo oy ya al lt ty y w wh hi ic ch h c ca an n t ta ak ke e
t th he ei ir r b bu us si in ne es ss s s sk ky y h hi ig gh h. .

W Wh ha at t i is s a a R Re el la at ti io on ns sh hi ip p? ?
A A r re el la at ti io on ns sh hi ip p i is s a a s sp pe ec ci if fi ic c c co on nn ne ec ct ti io on n b be et tw we ee en n o ob bj je ec ct ts s, , e en nt ti it ti ie es s o or r c co on nc ce ep pt ts s. . T Th hi is s b bo on nd d c ca an n e ex xi is st t
b be et tw we ee en n a an n i in nd di iv vi id du ua al l a an nd d a an n o or rg ga an ni iz za at ti io on n o or r b be et tw we ee en n t tw wo o i in nd di iv vi id du ua al ls s o or r b be et tw we ee en n t tw wo o o or rg ga an ni iz za at ti io on ns s. .
T Th he es se e r re el la at ti io on ns sh hi ip ps s a ar re e c ca at te eg go or ri iz ze ed d a as s s so oc ci ia al l r re el la at ti io on ns sh hi ip ps s, , c ca au us sa al l r re el la at ti io on ns sh hi ip ps s a an nd d m ma at th he em ma at ti ic ca al l o or r
t th he eo or re et ti ic ca al l r re el la at ti io on ns sh hi ip ps s w wh hi ic ch h a ar re e b be et tw we ee en n c co om mp po on ne en nt ts s o of f a a m mo od de el le ed d s sy ys st te em m. . H He er re ei in n, , p pr re es se en nc ce e o of f
b bo ot th h t th he e p pa ar rt ti ie es s i is s a a m mu us st t. . B Bo ot th h c ca an nn no ot t s su ur rv vi iv ve e w wi it th ho ou ut t e ea ac ch h o ot th he er r. .

W Wh ha at t i is s M Ma an na ag ge em me en nt t? ?
M Ma an na ag ge em me en nt t c co om mp pr ri is se es s d di ir re ec ct ti in ng g a an nd d c co on nt tr ro ol ll li in ng g a a g gr ro ou up p o of f o on ne e o or r m mo or re e p pe eo op pl le e o or r e en nt ti it ti ie es s f fo or r t th he e
p pu ur rp po os se e o of f c co oo or rd di in na at ti in ng g a an nd d h ha ar rm mo on ni iz zi in ng g t th he em m t to ow wa ar rd ds s a ac cc co om mp pl li is sh hi in ng g a a g go oa al l. . M Ma an na ag gi in ng g o of f h hu um ma an n
r re es so ou ur rc ce es s, , f fi in na an nc ci ia al l r re es so ou ur rc ce es s, , t te ec ch hn no ol lo og gi ic ca al l a an nd d n na at tu ur ra al l r re es so ou ur rc ce es s a ar re e t th he e c co or re e a ac ct ti iv vi it ti ie es s o of f a a
b bu us si in ne es ss s. . N No ow w, , i in n c ca as se e o of f c cu us st to om me er r r re el la at ti io on ns sh hi ip p m ma an na ag ge em me en nt t i it t m me ea an ns s m ma an na ag gi in ng g o of f t th he e c cu us st to om me er rs s o of f
t th he e c co om mp pa an ny y. .

11

I In n t to od da ay y s s c co om mp pe et ti it ti iv ve e e en nv vi ir ro on nm me en nt t, , c cu us st to om me er r i is s n no ot t o on nl ly y t th he e k ki in ng g b bu ut t t th he e e em mp pe er ro or r o of f t th he e m ma ar rk ke et t. .
T Tw wo o t th hi in ng gs s a a s se er rv vi ic ce e p pr ro ov vi id de er r h ha as s t to o k ke ee ep p i in n m mi in nd d w wh hi il le e p pe er rf fo or rm mi in ng g b bu us si in ne es ss s a ac ct ti iv vi it ti ie es s: :
C Cu us st to om me er r s s t ti im me e i is s p pr re ec ci io ou us s. .
A Ap pa ar rt t f fr ro om m h hi im m, , t th he er re e a ar re e s se ev ve er ra al l o ot th he er r s se er rv vi ic ce e p pr ro ov vi id de er rs s t to o s se er rv ve e h hi is s c cu us st to om me er r. .
B Be ec ca au us se e o of f t th hi is s, , t th he e c co om mp pa an ny y c ca an nn no ot t a af ff fo or rd d t to o l lo oo os se e a a s si in ng gl le e c cu us st to om me er r, , m ma ay y i it t b be e r re eg gu ul la ar r o or r
o oc cc ca as si io on na al l. . R Re et ta ai in ni in ng g t th he e c cu us st to om me er r i is s a an n e es ss se en nt ti ia al l p pa ar rt t o of f b bu us si in ne es ss s t to od da ay y. . T Th ha at t i is s w wh hy y a a h he ea al lt th hy y
r re el la at ti io on ns sh hi ip p s sh ho ou ul ld d b be e e es st ta ab bl li is sh he ed d w wi it th h t th he e c cu us st to om me er rs s o of f t th he e c co om mp pa an ny y. . I In n o or rd de er r t to o s se er rv ve e t th he e
c cu us st to om me er rs s, , t th he e c co om mp pa an ny y s sh ho ou ul ld d u un nd de er rs st ta an nd d a al ll l t th he ei ir r n ne ee ed ds s a an nd d d de es si ir re es s, , s so o t th ha at t t th he e c cu us st to om me er r b bu uy ys s t th he e
c co om mp pa an ny y s s p pr ro od du uc ct t o ov ve er r a an nd d o ov ve er r a ag ga ai in n. .
T Th he e p pe er rs so on nn ne el l w wh ho o m ma an na ag ge es s t th he es se e r re el la at ti io on ns sh hi ip ps s w wi it th h t th he e c cu us st to om me er rs s i is s c ca al ll le ed d c cu us st to om me er r r re el la at ti io on ns sh hi ip p
m ma an na ag ge er r a an nd d t th he e p pr ro oc ce es ss s c ca ar rr ri ie ed d o ou ut t b by y t th he e c co om mp pa an ny y i is s c ca al ll le ed d c cu us st to om me er r r re el la at ti io on ns sh hi ip p m ma an na ag ge em me en nt t. .
L Li ik ke e a an ny y o ot th he er r m ma an na ag ge er r, , t th he e C Cu us st to om me er r r re el la at ti io on ns sh hi ip p M Ma an na ag ge er r a al ls so o h ha as s c ce er rt ta ai in n s se et t o of f r re es sp po on ns si ib bi il li it ti ie es s
a an nd d g go oa al ls s t to o b be e a ac ch hi ie ev ve ed d f fo or r h hi is s o or rg ga an ni iz za at ti io on n. . F Fo or r h hi im m, , t th he e d du ut ti ie es s i in nc cl lu ud de e r ri ig gh ht t f fr ro om m b bu ui il ld di in ng g
r re el la at ti io on ns sh hi ip ps s w wi it th h t th he e c cu us st to om me er rs s t to o m ma ai in nt ta ai in ni in ng g a an nd d e en nh ha an nc ci in ng g r re el la at ti io on ns sh hi ip ps s w wi it th h t th he e v va al lu ue ed d
c cu us st to om me er rs s. .C Co on nv ve er rt ti in ng g a a s st tr ra an ng ge er r t to o a a p po ot te en nt ti ia al l b bu uy ye er r a an nd d t th he en n t to o a a l lo oy ya al l c cu us st to om me er r w wh ho o d do oe es s n no ot t
c ch ha an ng ge e h hi is s l lo oy ya al lt ty y e ev ve en n i if f t th he er re e a ar re e c co os st t b be en ne ef fi it ts s, , t th hi is s t ta as sk k i is s u un nd de er rt ta ak ke en n b by y t th he e c cu us st to om me er r r re el la at ti io on ns sh hi ip p
m ma an na ag ge er r. . E Es ss se en nt ti ia al ll ly y h he e r re es sh ha ap pe es s b bu us si in ne es ss s p pr ro oc ce es ss s t to o m me ee et t c cu us st to om me er r e ex xp pe ec ct ta at ti io on ns s, , e em mp po ow we er r
e em mp pl lo oy ye ee es s t to o b be es st t s se er rv ve e t th he e c cu us st to om me er r a an nd d d de et te er rm mi in ne e h ho ow w t to o m mo os st t e ef ff fi ic ci ie en nt tl ly y a an nd d e ef ff fe ec ct ti iv ve el ly y d de el li iv ve er r
o on n t th ho os se e n ne ee ed ds s. .
2.2 TYPES OF CRM
Customer relationship management (CRM) is defined as a business and technology discipline that
manages the ways an organization deals with its customers in order to enhance the revenue,
profitability, customer satisfaction and retention. It analyzes the different aspects of customer
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relationships, including customer services, sales, and marketing, to improve their customer focus.
Nowadays, three major types of customer relationship management systems, namely operational
CRM, analytical CRM and collaborative CRM are being used in many organizations.
Operational CRM
Analytical CRM
Collaborative CRM
Operational CRM
The operational application of CRM enables effective interaction with customers. For this purpose
various tools are used. These contact management tools aim to reduce costs by improved process
efficiency and use of media based communication channels. These are also aimed to provide
customers with a consistent interface across all communication channels. To achieve this relevant
customer data is collected and also displayed at all customer touch points. This is the customer master
data. Another set of data where employees' contact with customers is also logged. This has
information like topics discussed, customer requirements, soft customer data like hobbies,
preferences, interests, details about children and other minor stuffs.
Banks are an exemplary implementation of CRM as customer contact management. Channel
management tools aim to understand how customer interacts with the company. It aims to deliver
products and services across multiple channels in effective, efficient, and consistent
manner. Content management toolsenable the company to manage what is visible to the customers
i.e. what the customers are able to see when they interact with the company. The various processes
undertaken are: campaign management, sales management, service management, and complaint
management.


13

Analytical CRM
The data collected in operational management is analyzed to segment customers. The valuable
information thus obtained is used to satisfy customers. Analytical CRM is composed of:
1. Pattern discovery component
2. Product and customer analysis component
3. Multitude component
4. Sorting and customer fractionation component
5. Customer value evaluation component
Analytical solutions provided for most companies are integrated view of customer across all
channels and applications, campaign performance analysis, customer profitability analysis, cross-
selling and up selling. The analytical solutions help answer questions like:
1. Who are their best customers?
2. Whom they are likely to loose?
3. How to retain them?
4. How to attract new customers?
5. How to improve profitability of customers?
Examples are data warehousing, online analytical processing (OLAP), and data mining systems.
Note : Concept of customer segmentation : the value of customer is judged based on RFM analysis
i.e. focusing on Recency, Frequency, and Monetary value from customer purchasing data in retail
business. Accordingly the customers are divided into various levels. The four main segments of
customers are:
At the top is the VIP customer whose expenditure is most and form 1% of all customers in a
certain period.
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Then the main customer forming 5%.
Next the ordinary customer forming 20%.
And at the bottom is the scattered customer an overwhelming 80%.
The first three categories create more than 80% of all profits for the company and as a result they
are differentiated as the best customers. They are the real targets of Customer Centralization.
Collaborative CRM
The various departments of company like the sales, technical support, and marketing, share the
information they collect about customers. The objective is to improve the quality of customer
service and increase customer loyalty.
It allows the company to synchronize and manage efficient, productive interaction with customers,
prospects, partners, and internal associates across all communication channels. The customers'
viewpoint is taken care of at every transaction level thus enabling better service to the customer.
Collaborative CRM also reduces web service costs by enabling web collaboration.
2 2. .3 3 K KE EY Y C CR RM M P PR RI IN NC CI IP PL LE ES S O OF F C CR RM M
D Di if ff fe er re en nt ti ia at te e C Cu us st to om me er rs s
A Al ll l c cu us st to om me er rs s a ar re e n no ot t e eq qu ua al l; ; r re ec co og gn ni iz ze e a an nd d r re ew wa ar rd d b be es st t c cu us st to om me er rs s d di is sp pr ro op po or rt ti io on na at te el ly y. . U Un nd de er rs st ta an nd di in ng g
e ea ac ch h c cu us st to om me er r b be ec co om me es s p pa ar rt ti ic cu ul la ar rl ly y i im mp po or rt ta an nt t. . A An nd d t th he e s sa am me e c cu us st to om me er rs s r re ea ac ct ti io on n t to o a a c ce el ll lu ul la ar r
c co om mp pa an ny y o op pe er ra at to or r m ma ay y b be e q qu ui it te e d di if ff fe er re en nt t a as s c co om mp pa ar re ed d t to o a a c ca ar r d de ea al le er r. . B Be es si id de es s f fo or r t th he e s sa am me e p pr ro od du uc ct t o or r
t th he e s se er rv vi ic ce e n no ot t a al ll l c cu us st to om me er rs s c ca an n b be e t tr re ea at te ed d a al li ik ke e a an nd d C CR RM M n ne ee ed ds s t to o d di if ff fe er re en nt ti ia at te e b be et tw we ee en n a a h hi ig gh h
v va al lu ue e c cu us st to om me er r a an nd d a a l lo ow w v va al lu ue e c cu us st to om me er r. .


15

W Wh ha at t C CR RM M n ne ee ed ds s t to o u un nd de er rs st ta an nd d w wh hi il le e d di if ff fe er re en nt ti ia at ti in ng g c cu us st to om me er rs s i is s
S Se en ns si it ti iv vi it ti ie es s, , T Ta as st te es s, , P Pr re ef fe er re en nc ce es s a an nd d P Pe er rs so on na al li it ti ie es s
L Li if fe es st ty yl le e a an nd d a ag ge e
C Cu ul lt tu ur re e B Ba ac ck kg gr ro ou un nd d a an nd d e ed du uc ca at ti io on n
P Ph hy ys si ic ca al l a an nd d p ps sy yc ch ho ol lo og gi ic ca al l c ch ha ar ra ac ct te er ri is st ti ic cs s

D Di if ff fe er re en nt ti ia at ti in ng g O Of ff fe er ri in ng gs s
L Lo ow w v va al lu ue e c cu us st to om me er r r re eq qu ui ir ri in ng g h hi ig gh h v va al lu ue e c cu us st to om me er r o of ff fe er ri in ng gs s
L Lo ow w v va al lu ue e c cu us st to om me er r w wi it th h p po ot te en nt ti ia al l t to o b be ec co om me e h hi ig gh h v va al lu ue e i in n n ne ea ar r f fu ut tu ur re e
H Hi ig gh h v va al lu ue e c cu us st to om me er r r re eq qu ui ir ri in ng g h hi ig gh h v va al lu ue e s se er rv vi ic ce e
H Hi ig gh h v va al lu ue e c cu us st to om me er r r re eq qu ui ir ri in ng g l lo ow w v va al lu ue e s se er rv vi ic ce e

K Ke ee ep pi in ng g e ex xi is st ti in ng g c cu us st to om me er rs s
G Gr ra ad di in ng g c cu us st to om me er rs s f fr ro om m v ve er ry y s sa at ti is sf fi ie ed d t to o v ve er ry y d di is sa ap pp po oi in nt t s sh ho ou ul ld d h he el lp p t th he e o or rg ga an ni iz za at ti io on n i in n i im mp pr ro ov vi in ng g
i it ts s c cu us st to om me er r s sa at ti is sf fa ac ct ti io on n l le ev ve el ls s a an nd d s sc co or re es s. . A As s t th he e s sa at ti is sf fa ac ct ti io on n l le ev ve el l f fo or r e ea ac ch h c cu us st to om me er r i im mp pr ro ov ve es s s so o
s sh ha al ll l t th he e c cu us st to om me er r r re et te en nt ti io on n w wi it th h t th he e o or rg ga an ni iz za at ti io on n. .
M Ma ax xi im mi iz zi in ng g l li if fe e t ti im me e v va al lu ue e
E Ex xp pl lo oi it t u up p- -s se el ll li in ng g a an nd d c cr ro os ss s- -s se el ll li in ng g p po ot te en nt ti ia al l. . B By y i id de en nt ti if fy yi in ng g l li if fe e s st ta ag ge e a an nd d l li if fe e e ev ve en nt t t tr ri ig gg ge er r p po oi in nt ts s b by y
c cu us st to om me er r, , m ma ar rk ke et te er rs s c ca an n m ma ax xi im mi iz ze e s sh ha ar re e o of f p pu ur rc ch ha as se e p po ot te en nt ti ia al l. . T Th hu us s t th he e s si in ng gl le e a ad du ul lt ts s s sh ha al ll l r re eq qu ui ir re e a a
n ne ew w c ca ar r s st te er re eo o a an nd d a as s h he e g gr ro ow ws s i in nt to o a a m ma ar rr ri ie ed d c co ou up pl le e h hi is s n ne ee ed ds s g gr ro ow w i in nt to o a ap pp pl li ia an nc ce es s. .

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I In nc cr re ea as se e L Lo oy ya al lt ty y
L Lo oy ya al l c cu us st to om me er rs s a ar re e m mo or re e p pr ro of fi it ta ab bl le e. . A An ny y c co om mp pa an ny y w wi il ll l l li ik ke e i it ts s m mi in nd ds sh ha ar re e s st ta at tu us s t to o i im mp pr ro ov ve e f fr ro om m
b be ei in ng g a a s su us sp pe ec ct t t to o b be ei in ng g a an n a ad dv vo oc ca at te e. . C Co om mp pa an ny y h ha as s t to o i in nv ve es st t i in n t te er rm ms s o of f i it ts s p pr ro od du uc ct t a an nd d s se er rv vi ic ce e
o of ff fe er ri in ng gs s t to o i it ts s c cu us st to om me er rs s. . I It t h ha as s t to o i in nn no ov va at te e a an nd d m me ee et t t th he e v ve er ry y n ne ee ed ds s o of f i it ts s c cl li ie en nt ts s/ /c cu us st to om me er rs s s so o t th ha at t
t th he ey y r re em ma ai in n a as s a ad dv vo oc ca at te es s o on n t th he e l lo oy ya al lt ty y c cu ur rv ve e. . R Re ef fe er rr ra al l s sa al le es s i in nv va ar ri ia ab bl ly y l lo ow w c co os st t h hi ig gh h m ma ar rg gi in n s sa al le es s. .













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C CH HA AP PT TE ER R 3 3 : : O OB BJ JE EC CT TI IV VE ES S O OF F C CR RM M
3.1 OBJECTIVES OF CRM
The real value to a company lies in the value they create for their customers and in the
value the customers deliver back to the company. Accordingly, it is important to mark. That the
value does not lie in more information and in more advanced technology. The value lies in the
customer knowledge and in how the company uses that knowledge to manage their customer
relationships. Knowledge is according to Newell (2000) the sole of CRM.
Unfortunately, few companies are transforming the information to customer
knowledge and therefore they miss the opportunity to provide value to their customer. However,
applied in the right way, CRM is the tool that contributes to profit. If companies are transforming
the customer data into knowledge and then uses that knowledge to build relationships it will create
loyalty, followed by profit. (Newell, 2000)
According to Mr Swift (2001) companies can gain many benefits from CRM. He states
that the benefits are commonly found in one of these areas:
1. Lower cost of recruiting customers:
The cost for recruiting customers will decrease since there are savings to be made on
marketing, mailing, contact, follow-up, fulfillment, services, and so on
2. No need to recruit so many customers to preserve a steady volume of business:
The number of long-term customers will increase and consequently the need for recruiting
many new customers decreases.


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3. Reduced costs of sales:
The costs regarding selling are reduced owing to that existing customers are usually more
responsive. In addition, with better knowledge of channels and distributors the relationships
become more effective, as well as that costs for marketing campaigns is reduced.
4. Higher customer profitability:
The customer profitability will get higher since the customer wallet-share increases,
there are increases in up-selling, cross-selling and follow-up sales, and more referrals comes with
higher customer satisfaction among existing customers.
5. Increased customer retention and loyalty:
The customer retention increases since customers stay longer, buy more and buy more
frequently. The customer does also more often take initiatives, which increase the bounding
relationship, and as a result the customer loyalty increases as well.
6. Evaluation of customer profitability:
The company will get to know which customer are profitable, the ones who never might
become profitable, and which ones that might be profitable in the future.
This is very important since the key to success in any business is to focus on acquiring
customers who generate profit, and once you have found them, never let them go. (Ibid)
All customers are not valuable; some may even be of danger to the business. This
occurs when the customers use the companys time, energy and resources withoutgenerating enough
business to make them worth the effort. (Budhwani, 2002) Hence, a company should perform
CRM efforts where they will get the best possible return, which means focusing on customers
who already are or will become the companys most profitable customers. (Newell, 2000)

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3.2 THE BENEFITS OF CRM
Knowledge of Customer Needs
CRM allows an organization to develop a knowledge base that all employees can accessible easily.
This allows the company to analyze available data and provides employees with accurate information
about customers. It also empowers the organization to arrive at correct and well-informed decisions.
In addition, it helps the company be as close to the client base as possible so it can effectively
anticipate their changing needs and cater to such needs. With the knowledge base, employees can
easily share and update any piece of information to any department with ease.
Higher Revenues
CRM can boost customer revenue through efficient computerized bookkeeping. This allows the
organization to increase its revenue through higher volumes of purchases.
With improved customer satisfaction, businesses can be assured that their clients will veer away from
competitors. CRM assists an organization with its advertising campaigns, direct mail, and e-
commerce. It will also help manage customer profile analyses to enhance marketing strategies. With
CRM, coordination of various processes such as customer sales, customer care, orders,
warehousing, packing, returns processing, and inventory management becomes easier. For example,
you can make sure to offer the lower cost opportunities to clients who are more conscious of price
while offering the higher-end products to those clients in the luxury market.

Improved Communication and Customer Satisfaction
Employing efficient CRM processes will help achieve goals that target successful communication
and fulfillment of customer needs. Therefore, CRM helps improve communication between the
company and its customers. Employing CRM methods enhance customer satisfaction with the
company and all its products. If customers are happy and satisfied, the company can easily retain
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customers for long periods of time without exerting much effort. This will also contribute to the
company's good reputation in the market and in the eyes of the customers. In other words, CRM will
help create and retain customers, and help keep them loyal. It ensures customers will have fulfilling
relationships with the company, which will always do its part in delivering excellent customer
service.

3.3 WHAT IS THE IMPORTANCE OF CRM?
Identification
Customer Relationship Management, or CRM, is a business strategy that focuses on customer
knowledge, satisfaction, and retention. While the goal of any business is profit, CRM strategies start
with the customer and work toward the sale, versus a "selling" strategy that starts with the product or
service and leads toward the customer. Starting with the customer involves collecting and analyzing
information to determine who the customer is, what the customer needs, and how a business can
meet, then exceed, those needs.
Goals
To understand the importance of CRM, you need to look at its ultimate goals. Five important CRM
goals include superior customer service, a need-based selling strategy, effective cross-selling, sales
staff support, and customer generation and retention policies. Realizing these goals means your
business must create a marketing mix that involves product, price, place, and promotion unique to
each customer you serve. Adopting the goals of CRM involves a process of studying the customer
and the buying process, providing your sales staff with the training and technology required to match
products or services with needs, and assisting sales staff efforts to discover ways to add value and
profit with cross selling.
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Strategies
CRM involves developing strategies that focus on customers because consumers can have a
significant impact on the bottom line. Essential CRM strategies include customer retention or win-
back strategies, new customer generation, personalized selling plans that work to ensure customer
loyalty, and continued enhancement of the product/service line to provide the right products in the
marketing mix. To carry out these strategies effectively requires commitment and communication,
along with the technology and infrastructure required to support it.
Implementation
CRM can bring a company together. Focusing attention on the needs of the customer and making
successful implementation of CRM strategies of the utmost importance creates a common goal for all
concerned. Implementing CRM strategies, however, requires an investment of both time and money.
Technology in the form of a network infrastructure and CRM software is essential for successful
implementation, as is training staff to use the software to its fullest potential.
Potential
CRM significantly increases a business's potential for profit. It increases internal communication,
provides ways for employees to work together toward a common goal, makes the selling process
easier and more effective, and most importantly, increases customer satisfaction and loyalty. A
business that makes a commitment to CRM also makes a commitment to change and evolve as
customers move through their life cycle, change their wants, needs, and buying habits, and as
business and economic conditions change. This evolution is essential for continued success and
profitability.


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C CH HA AP PT TE ER R 4 4: : P PR RO OC CE ES SS S O OF F C CR RM M
4 4. .1 1 C CR RM M P PR RO OC CE ES SS S F FR RA AM ME EW WO OR RK K
I I) ) C CR RM M F FO OR RM MA AT TI IO ON N P PR RO OC CE ES SS S
I In n t th he e f fo or rm ma at ti io on n p pr ro oc ce es ss s, , t th hr re ee e i im mp po or rt ta an nt t d de ec ci is si io on n a ar re ea as s r re el la at te e t to o d de ef fi in ni in ng g t th he e p pu ur rp po os se e ( (o or r o ob bj je ec ct ti iv ve es s) )
o of f e en ng ga ag gi in ng g i in n C CR RM M, , s se el le ec ct ti in ng g p pa ar rt ti ie es s ( (o or r c cu us st to om me er r p pa ar rt tn ne er rs s) ) f fo or r a ap pp pr ro op pr ri ia at te e C CR RM M p pr ro og gr ra am ms s a an nd d
d de ev ve el lo op pi in ng g p pr ro og gr ra am ms s ( (o or r r re el la at ti io on na al l a ac ct ti iv vi it ty y s sc ch he em me es s) ) f fo or r r re el la at ti io on ns sh hi ip p e en ng ga ag ge em me en nt t w wi it th h t th he e c cu us st to om me er r. .
C CR RM M P PU UR RP PO OS SE E
T Th he e o ov ve er ra al ll l p pu ur rp po os se e o of f C CR RM M i is s t to o i im mp pr ro ov ve e m ma ar rk ke et ti in ng g p pr ro od du uc ct ti iv vi it ty y a an nd d e en nh ha an nc ce e v va al lu ue e f fo or r p pa ar rt ti ie es s i in n
i in nv vo ol lv ve ed d i in n t th he e r re el la at ti io on ns sh hi ip p. . B By y s se ee ek ki in ng g a an nd d a ac ch hi ie ev vi in ng g o op pe er ra at ti io on na al l g go oa al ls s, , s su uc ch h a as s l lo ow we er r d di is st tr ri ib bu ut ti io on n
c co os st ts s, , s st tr re ea am ml li in ni in ng g o or rd de er r p pr ro oc ce es ss si in ng g a an nd d i in nv ve en nt to or ry y m ma an na ag ge em me en nt t, , r re ed du uc ci in ng g t th he e b bu ur rd de en n o of f e ex xc ce es ss si iv ve e
c cu us st to om me er r a ac cq qu ui is si it ti io on n c co os st t, , a an nd d t th hr ro ou ug gh h c cu us st to om me er r r re et te en nt ti io on n e ec co on no om mi ic cs s, , f fi ir rm ms s c co ou ul ld d a ac ch hi ie ev ve e g gr re ea at te er r
m ma ar rk ke et ti in ng g e ef ff fi ic ci ie en nc ci ie es s. . T Th he ey y c ca an n e en nh ha an nc ce e m ma ar rk ke et ti in ng g e ef ff fe ec ct ti iv ve en ne es ss s b by y c ca ar re ef fu ul ll ly y s se el le ec ct ti in ng g, , c cu us st to om me er rs s
f fo or r i it ts s v va ar ri io ou us s p pr ro og gr ra am ms s, , i in nd di iv vi id du ua al li iz zi in ng g a an nd d p pe er rs so on na al li iz zi in ng g t th he ei ir r m ma ar rk ke et t o of ff fe er ri in ng gs s t to o a an nt ti ic ci ip pa at te e a an nd d
s se er rv ve e t th he e e em me er rg gi in ng g n ne ee ed ds s o of f i in nd di iv vi id du ua al l c cu us st to om me er r, , b bu ui il ld di in ng g c cu us st to om me er r l lo oy ya al lt ty y a an nd d c co om mm mi it tm me en nt t, ,
p pa ar rt tn ne er ri in ng g t to o e en nt te er r n ne ew w m ma ar rk ke et ts s a an nd d d de ev ve el lo op p n ne ew w p pr ro od du uc ct ts s, , a an nd d r re ed de ef fi in ni in ng g t th he e c co om mp pe et ti it ti iv ve e p pl la ay yi in ng g
f fi ie el ld d f fo or r t th he ei ir r c co om mp pa an ny y. . T Th hu us s, , s st ta at ti in ng g t th he e o ob bj je ec ct ti iv ve es s a an nd d d de ef fi in ni in ng g t th he e p pu ur rp po os se e o of f C CR RM M i in n a a c co om mp pa an ny y
h he el lp ps s c cl la ar ri if fy y t th he e n na at tu ur re e o of f C CR RM M p pr ro og gr ra am ms s a an nd d a ac ct ti iv vi it ti ie es s t th ha at t o ou ug gh ht t t to o b be e p pe er rf fo or rm me ed d b by y t th he e p pa ar rt tn ne er rs s. .
D De ef fi in ni in ng g t th he e p pu ur rp po os se e w wo ou ul ld d a al ls so o h he el lp p i in n i id de en nt ti if fy yi in ng g s su ui it ta ab bl le e r re el la at ti io on ns sh hi ip p p pa ar rt tn ne er rs s w wh ho o h ha av ve e n ne ec ce es ss sa ar ry y
e ex xp pe ec ct ta at ti io on ns s a an nd d c ca ap pa ab bi il li it ti ie es s t to o f fu ul lf fi il ll l m mu ut tu ua al l g go oa al ls s. . I It t w wi il ll l f fu ur rt th he er r h he el lp p i in n e ev va al lu ua at ti in ng g C CR RM M
p pe er rf fo or rm ma an nc ce e b by y c co om mp pa ar ri in ng g r re es su ul lt ts s a ac ch hi ie ev ve ed d a ag ga ai in ns st t o ob bj je ec ct ti iv ve es s. . T Th he es se e o ob bj je ec ct ti iv ve es s c co ou ul ld d b be e s sp pe ec ci if fi ie ed d a as s
f fi in na an nc ci ia al l g go oa al ls s, , m ma ar rk ke et ti in ng g g go oa al ls s, , s st tr ra at te eg gi ic c g go oa al ls s, , o op pe er ra at ti io on na al l g go oa al ls s, , a an nd d g ge en ne er ra al l g go oa al ls s. . C Cu us st to om me er rs s a ar re e
m mo ot ti iv va at te ed d t to o e en ng ga ag ge e i in n r re el la at ti io on na al l b be eh ha av vi io or r b be ec ca au us se e o of f p ps sy yc ch ho ol lo og gi ic ca al l a an nd d s so oc ci io ol lo og gi ic ca al l b be en ne ef fi it ts s
a as ss so oc ci ia at te ed d w wi it th h r re ed du uc ct ti io on n i in n c ch ho oi ic ce e d de ec ci is si io on ns s. .
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C CR RM M P PR RO OG GR RA AM MS S
A A c ca ar re ef fu ul l r re ev vi ie ew w o of f l li it te er ra at tu ur re e a an nd d o ob bs se er rv va at ti io on n o of f c co or rp po or ra at te e p pr ra ac ct ti ic ce es s s su ug gg ge es st t t th ha at t t th he er re e a ar re e t th hr re ee e
t ty yp pe es s o of f C CR RM M p pr ro og gr ra am ms s: : c co on nt ti in nu ui it ty y m ma ar rk ke et ti in ng g; ; o on ne e- -t to o- -o on ne e m ma ar rk ke et ti in ng g; ; a an nd d, , p pa ar rt tn ne er ri in ng g p pr ro og gr ra am ms s. .
T Th he es se e t ta ak ke e d di if ff fe er re en nt t f fo or rm ms s d de ep pe en nd di in ng g o on n w wh he et th he er r t th he ey y a ar re e m me ea an nt t f fo or r e en nd d c co on ns su um me er rs s, , d di is st tr ri ib bu ut to or r
c co on ns su um me er rs s o or r b bu us si in ne es ss s- -t to o- -b bu us si in ne es ss s c co on ns su um me er rs s. .
( (A A) ) C CO ON NT TI IN NU UI IT TY Y M MA AR RK KE ET TI IN NG G
T Ta ak ke e t th he e s sh ha ap pe e o of f m me em mb be er rs sh hi ip p a an nd d l lo oy ya al lt ty y c ca ar rd d p pr ro og gr ra am ms s w wh he er re e c cu us st to om me er rs s a ar re e o of ft te en n r re ew wa ar rd de ed d f fo or r
t th he ei ir r m me em mb be er r a an nd d l lo oy ya al lt ty y r re el la at ti io on ns sh hi ip ps s w wi it th h t th he e m ma ar rk ke et te er rs s. . T Th he e b ba as si ic c p pr re em mi is se e o of f c co on nt ti in nu ui it ty y m ma ar rk ke et ti in ng g
p pr ro og gr ra am ms s i is s t to o r re et ta ai in n c cu us st to om me er rs s a an nd d i in nc cr re ea as se e l lo oy ya al lt ty y t th hr ro ou ug gh h l lo on ng g- -t te er rm m s sp pe ec ci ia al l s se er rv vi ic ce es s t th ha at t h ha as s a a
p po ot te en nt ti ia al l t to o i in nc cr re ea as se e m mu ut tu ua al l v va al lu ue e t th hr ro ou ug gh h l le ea ar rn ni in ng g a ab bo ou ut t e ea ac ch h o ot th he er r. .
( (B B) ) O ON NE E- -T TO O- -O ON NE E M MA AR RK KE ET TI IN NG G
T Th hi is s r re el la at te es s t to o m me ee et ti in ng g a an nd d s sa at ti is sf fy yi in ng g e ea ac ch h c cu us st to om me er r s s n ne ee ed d u un ni iq qu ue el ly y a an nd d i in nd di iv vi id du ua al ll ly y. . I In n t th he e m ma as ss s
m ma ar rk ke et ts s i in nd di iv vi id du ua al li iz ze ed d i in nf fo or rm ma at ti io on n o on n c cu us st to om me er rs s i is s n no ow w p po os ss si ib bl le e a at t l lo ow w c co os st ts s d du ue e t to o t th he e r ra ap pi id d
d de ev ve el lo op pm me en nt t i in n t th he e i in nf fo or rm ma at ti io on n t te ec ch hn no ol lo og gy y a an nd d d du ue e t to o a av va ai il la ab bi il li it ty y o of f s sc ca al la ab bl le e d da at ta a w wa ar re eh ho ou us se es s a an nd d
d da at ta a m mi in ni in ng g p pr ro od du uc ct ts s. . B By y u us si in ng g o on nl li in ne e i in nf fo or rm ma at ti io on n a an nd d d da at ta ab ba as se es s o on n i in nd di iv vi id du ua al l c cu us st to om me er r i in nt te er ra ac ct ti io on ns s, ,
m ma ar rk ke et te er rs s a ai im m t to o f fu ul lf fi il ll l t th he e u un ni iq qu ue e n ne ee ed ds s o of f e ea ac ch h m ma as ss s- -m ma ar rk ke et t c cu us st to om me er r. .
I In nf fo or rm ma at ti io on n o on n i in nd di iv vi id du ua al l c cu us st to om me er rs s i is s u ut ti il li iz ze ed d t to o d de ev ve el lo op p f fr re eq qu ue en nc cy y m ma ar rk ke et ti in ng g, , i in nt te er ra ac ct ti iv ve e
m ma ar rk ke et ti in ng g, , a an nd d a af ft te er r m ma ar rk ke et ti in ng g p pr ro og gr ra am ms s i in n o or rd de er r t to o d de ev ve el lo op p r re el la at ti io on ns sh hi ip p w wi it th h h hi ig gh h- -y yi ie el ld di in ng g
c cu us st to om me er rs s. . I In n t th he e c co on nt te ex xt t o of f b bu us si in ne es ss s- -t to o- -b bu us si in ne es ss s m ma ar rk ke et ts s, , i in nd di iv vi id du ua al l m ma ar rk ke et ti in ng g h ha as s b be ee en n i in n p pl la ac ce e o of f
q qu ui it te e s so om me et ti im me e. . K Kn no ow wn n a as s K Ke ey y A Ac cc co ou un nt t M Ma an na ag ge em me en nt t P Pr ro og gr ra am m, , h he er re e m ma ar rk ke et te er rs s a ap pp po oi in nt t c cu us st to om me er r
t te ea am ms s t to o h hu us sb ba an nd d t th he e c co om mp pa an ny y r re es so ou ur rc ce es s a ac cc co or rd di in ng g t to o i in nd di iv vi id du ua al l c cu us st to om me er r n ne ee ed ds s. .

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( (C C) ) P PA AR RT TN NE ER RI IN NG G P PR RO OG GR RA AM MS S
T Th he e t th hi ir rd d t ty yp pe e o of f C CR RM M p pr ro og gr ra am ms s i is s p pa ar rt tn ne er ri in ng g r re el la at ti io on ns sh hi ip ps s b be et tw we ee en n c cu us st to om me er r a an nd d m ma ar rk ke et te er rs s t to o
s se er rv ve e e en nd d u us se er r n ne ee ed ds s. . I In n t th he e m ma as ss s m ma ar rk ke et ts s, , t tw wo o t ty yp pe es s o of f p pa ar rt tn ne er ri in ng g p pr ro og gr ra am ms s a ar re e m mo os st t c co om mm mo on n: : c co o- -
b br ra an nd di in ng g a an nd d p pa ar rt tn ne er ri in ng g. .
I II I) ) O OR RG GA AN NI IZ ZI IN NG G F FO OR R C CR RM M
H Ho ow w d do o y yo ou u k kn no ow w t th ha at t y yo ou ur r b bu us si in ne es ss s r re eq qu ui ir re es s C CR RM M? ?
I It t i is s v ve er ry y e ea as sy y f fo or r a a b bu us si in ne es ss s t to o g ge et t c ca au ug gh ht t i in n t th he e l la at te es st t c cu us st to om me er r t tr ra ap p w wh he en n i it t i is s b be ei in ng g d dr ri iv ve en n b by y t th he e
i in nf fo or rm ma at ti io on n t te ec ch hn no ol lo og gy y ( (I IT T) ) m ma ar rk ke et t. . E Ev ve er ry y b bu us si in ne es ss s d do oe es s r re eq qu ui ir re e C CR RM M. . T Th he e q qu ue es st ti io on n i is s t to o w wh ha at t
l le ev ve el l. . M Ma an ny y b bu us si in ne es ss se es s a ar re e p pu us sh he ed d b by y t th he e c cu ur rr re en nt t t tr re en nd d t to o c ch ha an ng ge e t th he ei ir r b bu us si in ne es ss s s st tr ra at te eg gy y, , e es sp pe ec ci ia al ll ly y
a ar ro ou un nd d C CR RM M. . T Th he er re e a ar re e b ba as si ic ca al ll ly y t th hr re ee e t tr re en nd ds s t th ha at t a af ff fe ec ct t a a b bu us si in ne es ss s. . T Th he ey y a ar re e a as s f fo ol ll lo ow ws s: :- -
C CO ON NS SU UM ME ER R
T Th he e c cu us st to om me er r i is s a an n e ev ve er r- -c ch ha an ng gi in ng g i im ma ag ge e; ; t to o b be e r re ea al ll ly y s su uc cc ce es ss sf fu ul l w wi it th h C CR RM M y yo ou u m mu us st t r re ec co og gn ni iz ze e t th he e
c cu us st to om me er r t tr re en nd ds s t th ha at t a ar re e a af ff fe ec ct ti in ng g t th he e b bu us si in ne es ss s. .I If f a a b bu us si in ne es ss s d do oe es s n no ot t u un nd de er rs st ta an nd d a a c cu us st to om me er r p pr ro of fi il le e
a an nd d t th he e c ch ha an ng ge es s t th ha at t h ha av ve e o oc cc cu ur rr re ed d t th he en n i it t i is s n no ot t p po os ss si ib bl le e t to o p pr ro ov vi id de e t tr ru ue e c cu us st to om me er r r re el la at ti io on ns sh hi ip p
m ma an na ag ge em me en nt t. .
P PR RO OD DU UC CT TS S
I It t i is s t th he e b bu us si in ne es ss s p pr ro ov vi id di in ng g t th he e p pr ro od du uc ct ts s t th ha at t m me ee et t t th he e c ch ha an ng gi in ng g c cu us st to om me er r t tr re en nd ds s. . P Pr ro od du uc ct ts s n ne ee ed d t to o b be e
r re ev vi ie ew we ed d c co on ns st ta an nt tl ly y p pe er rh ha ap ps s e en nh ha an nc ce ed d o or r e ev ve en n r re em mo ov ve ed d. . S Su up pe er rm ma ar rk ke et ts s a ar re e a a p pe er rf fe ec ct t p pr ro of fi il le e t to o l lo oo ok k a at t
f fo or r v vi ie ew wi in ng g p pr ro od du uc ct t t tr re en nd ds s , , t th he ey y c co on ns st ta an nt tl ly y a ad dd d a an nd d r re em mo ov ve e p pr ro od du uc ct ts s a an nd d t th he ey y c co on ns st ta an nt tl ly y v vi ie ew w
c cu us st to om me er r b bu uy yi in ng g p pr ro of fi il le es s a an nd d s se et t o ou ut t t th he e p pa at tt te er rn n o of f t th he e s st to or re e t to o m me ee et t t th he e s st tr ro on ng ge es st t b bu uy yi in ng g t tr re en nd d. .

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T TE EC CH HN NO OL LO OG GY Y
E En ns su ur re e t th ha at t t th he e b bu us si in ne es ss s i is s r re ea ad dy y t to o i in ns st ta al ll l t th he e n ne ew w t te ec ch hn no ol lo og gi ie es s, , i is s t th he e c cu us st to om me er r d da at ta a u up p t to o i it t, , o or r i is s i it t
t ti im me e t to o s st ta ar rt t a ag ga ai in n? ? D Do o y yo ou u n ne ee ed d t to o r re ev vi ie ew w e ev ve er ry y t te ec ch hn no ol lo og gy y b be ei in ng g u us se ed d o or r j ju us st t o on ne e a ar re ea a. . W Wi il ll l i it t a as ss si is st t
t th he e b bu us si in ne es ss s, , i is s i it t g go oi in ng g t to o g gr ro ow w w wi it th h t th he e b bu us si in ne es ss s r re eq qu ui ir re em me en nt ts s o or r i is s t th he e t te ec ch hn no ol lo og gy y j ju us st t a an no ot th he er r
t tr re en nd d ? ? R Re el la at ti io on ns sh hi ip p m ma an na ag ge em me en nt t s sh ho ou ul ld d n no ot t b be e a an n a al lt te er rn na at ti iv ve e t to o e ex xi is st ti in ng g f fu un nc ct ti io on ns s/ /t te ec ch hn no ol lo og gy y; ; i it t
c co ou ul ld d b be e a a l lo og gi ic ca al l e ex xt te en ns si io on n t to o e en nh ha an nc ce e t th ho os se e i in n e ex xi is st te en nc ce e, , t th ho ou ug gh h i it t c co ou ul ld d r ra ad di ic ca al ll ly y c ch ha an ng ge e s so om me e o of f
t th he e o op pe er ra at ti io on na al l p pr ro oc ce es ss s. .
I II II I) ) C CR RM M G GO OV VE ER RN NA AN NC CE E P PR RO OC CE ES S
G Gr re ea at te er r t th he e s sc co op pe e o of f C CR RM M p pr ro og gr ra am m a an nd d a as ss so oc ci ia at te ed d t ta as sk ks s, , a an nd d t th he e m mo or re e c co om mp pl le ex x i is s t th he e
c co om mp po os si it ti io on n o of f t th he e r re el la at ti io on ns sh hi ip p m ma an na ag ge em me en nt t t te ea am m; ; t th he e m mo or re e c cr ri it ti ic ca al l i is s t th he e r ro ol le e s sp pe ec ci if fi ic ca at ti io on n d de ec ci is si io on n
f fo or r t th he e p pa ar rt tn ne er ri in ng g f fi ir rm ms s. .
I It t i is s e es ss se en nt ti ia al l t to o e es st ta ab bl li is sh h i in nt tr ra a- -c co om mp pa an ny y c co om mm mu un ni ic ca at ti io on n p pa ar rt ti ic cu ul la ar rl ly y a am mo on ng g a al ll l c co on nc ce er rn ne ed d
i in nd di iv vi id du ua al ls s a an nd d c co or rp po or ra at te e f fu un nc ct ti io on ns s t th ha at t d di ir re ec ct tl ly y p pl la ay y a a r ro ol le e i in n m ma an na ag gi in ng g t th he e r re el la at ti io on ns sh hi ip p w wi it th h a a
s sp pe ec ci if fi ic c c cu us st to om me er r o or r c cu us st to om me er r g gr ro ou up p. .
W Wi it th h m ma as ss s- -m ma ar rk ke et t c cu us st to om me er rs s f fr re eq qu ue en nt t f fa ac ce e- -t to o- -f fa ac ce e i in nt te er ra ac ct ti io on ns s w wi il ll l b be e u un ne ec co on no om mi ic ca al l. . T Th hu us s
m ma ar rk ke et te er rs s s sh ho ou ul ld d c cr re ea at te e c co om mm mo on n b bo on nd ds s t th hr ro ou ug gh h s sy ym mb bo ol li ic c r re el la at ti io on ns sh hi ip ps s, , e en nd do or rs se em me en nt ts s, , a af ff fi in ni it ty y
g gr ro ou up ps s a an nd d t th he e m me em mb be er rs sh hi ip p b be en ne ef fi it ts s o or r b by y c cr re ea at ti in ng g o on nl li in ne e c co om mm mu un ni it ti ie es s. .
I In nv vo ol lv vi in ng g c cu us st to om me er rs s i in n t th he e p pl la an nn ni in ng g p pr ro oc ce es ss s w wo ou ul ld d e en ns su ur re e t th he ei ir r s su up pp po or rt t i in n p pl la an n
i im mp pl le em me en nt ta at ti io on n a an nd d a ac ch hi ie ev ve em me en nt t o of f p pl la an nn ne ed d g go oa al ls s. . A Al ll l c cu us st to om me er rs s a ar re e n no ot t w wi il ll li in ng g t to o p pa ar rt ti ic ci ip pa at te e i in n t th he e
p pl la an nn ni in ng g p pr ro oc ce es ss s n no or r i is s i it t p po os ss si ib bl le e t to o i in nv vo ol lv ve e a al ll l o of f t th he em m f fo or r r re el la at ti io on ns sh hi ip p m ma ar rk ke et ti in ng g p pr ro og gr ra am ms s f fo or r t th he e
m ma as ss s m ma ar rk ke et ts s. .
26

H Hu um ma an n r re es so ou ur rc ce es s d de ec ci is si io on ns s a ar re e a al ls so o i im mp po or rt ta an nt t i in n c cr re ea at ti in ng g t th he e r ri ig gh ht t o or rg ga an ni iz za at ti io on n c cl li im ma at te e f fo or r
m ma an na ag gi in ng g r re el la at ti io on ns sh hi ip p m ma ar rk ke et ti in ng g. . T Tr ra ai in ni in ng g e em mp pl lo oy ye ee es s t to o i in nt te er ra ac ct t w wi it th h c cu us st to om me er rs s, , t to o w wo or rk k i in n t te ea am ms s, ,
a an nd d m ma an na ag ge e r re el la at ti io on ns sh hi ip p e ex xp pe ec ct ta at ti io on ns s a ar re e i im mp po or rt ta an nt t. . S So o i is s t th he e i is ss su ue e o of f c cr re ea at ti in ng g t th he e r ri ig gh ht t m mo ot ti iv va at ti io on n
t th hr ro ou ug gh h i in nc ce en nt ti iv ve es s a an nd d r re ew wa ar rd ds s. .














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C CH HA AP PT TE ER R 5 5- - C CR RM M I IS SS SU UE ES S
5 5. .1 1 C CR RM M I IM MP PE EM ME EN NT TA AT TI IO ON N I IS SS SU UE ES S
O On ne e o of f t th he e m mo os st t i in nt te er re es st ti in ng g a as sp pe ec ct ts s o of f C CR RM M d de ev ve el lo op pm me en nt t i is s t th he e m mu ul lt ti it tu ud de e o of f c cu us st to om me er r i in nt te er rf fa ac ce es s t th ha at t
a a c co om mp pa an ny y h ha as s t to o m ma an na ag ge e i in n t to od da ay y s s c co on nt te ex xt t. . U Un nt ti il l r re ec ce en nt tl ly y, , a a c co om mp pa an ny y s s d di ir re ec ct t i in nt te er rf fa ac ce e w wi it th h t th he e
c cu us st to om me er rs s, , i if f a an ny y w wa as s p pr ri im ma ar ri il ly y t th hr ro ou ug gh h s sa al le es s p pe eo op pl le e o or r s se er rv vi ic ce e a ag ge en nt ts s. . I In n t to od da ay y s s e en nv vi ir ro on nm me en nt t m mo os st t
c co om mp pa an ni ie es s i in nt te er rf fa ac ce e w wi it th h t th he ei ir r c cu us st to om me er rs s t th hr ro ou ug gh h a a v va ar ri ie et ty y o of f c ch ha an nn ne el ls s i in nc cl lu ud di in ng g s sa al le es s p pe eo op pl le e, ,
s se er rv vi ic ce e p pe er rs so on nn ne el l, , c ca al ll l c ce en nt te er rs s, , I In nt te er rn ne et t w we eb bs si it te es s, , m ma ar rk ke et ti in ng g d de ep pa ar rt tm me en nt ts s, , f fu ul lf fi il ll lm me en nt t h ho ou us se es s, , m ma ar rk ke et t
a an nd d b bu us si in ne es ss s d de ev ve el lo op pm me en nt t a ag ge en nt ts s, , e et tc c. . F Fo or r l la ar rg ge e c cu us st to om me er rs s i it t a al ls so o i in nc cl lu ud de es s c cr ro os ss s- -f fu un nc ct ti io on na al l t te ea am ms s t th ha at t
m ma ay y i in nc cl lu ud de e p pe er rs so on nn ne el l f fr ro om m v va ar ri io ou us s f fu un nc ct ti io on na al l d de ep pa ar rt tm me en nt ts s. . W Wh hi il le e e ea ac ch h o of f t th he es se e u un ni it ts s c co ou ul ld d o op pe er ra at te e
i in nd de ep pe en nd de en nt tl ly y, , t th he ey y s st ti il ll l n ne ee ed d t to o s sh ha ar re e i in nf fo or rm ma at ti io on n a ab bo ou ut t i in nd di iv vi id du ua al l c cu us st to om me er rs s a an nd d t th he ei ir r i in nt te er ra ac ct ti io on ns s
w wi it th h t th he e c co om mp pa an ny y o on n a a r re ea al l t ti im me e b ba as si is s. .
F Fo or r e ex xa am mp pl le e, , a a c cu us st to om me er r w wh ho o j ju us st t p pl la ac ce ed d a an n o or rd de er r o on n t th he e I In nt te er rn ne et t a an nd d s su ub bs se eq qu ue en nt tl ly y c ca al ll ls s t th he e c ca al ll l
c ce en nt tr re e f fo or r o or rd de er r v ve er ri if fi ic ca at ti io on n e ex xp pe ec ct ts s t th he e c ca al ll l c ce en nt tr re e s st ta af ff f t to o k kn no ow w t th he e d de et ta ai il ls s o of f h hi is s o or r h he er r o or rd de er r h hi is st to or ry y. .
S Si im mi il la ar rl ly y a a c cu us st to om me er r a ap pp pr ro oa ac ch he ed d b by y a a s sa al le es s p pe er rs so on n u un na aw wa ar re e t th ha at t s sh he e h ha as s r re ec ce en nt tl ly y c co om mp pl la ai in ne ed d a ab bo ou ut t
d di is ss sa at ti is sf fa ac ct to or ry y c cu us st to om me er r s se er rv vi ic ce e, , i is s n no ot t l li ik ke el ly y t to o b be e t tr re ea at te ed d k ki in nd dl ly y b by y t th he e c cu us st to om me er r. . T Th he er re ef fo or re e
e ef ff fe ec ct ti iv ve e C CR RM M r re eq qu ui ir re es s a a f fr ro on nt t- -l li in ne e i in nf fo or rm ma at ti io on n s sy ys st te em m t th ha at t s sh ha ar re es s r re el le ev va an nt t c cu us st to om me er r i in nf fo or rm ma at ti io on n
a ac cr ro os ss s a al ll l i in nt te er rf fa ac ce e u un ni it ts s. . R Re el la at ti io on na al l d da at ta ab ba as se es s, , d da at ta a w wa ar re eh ho ou us si in ng g a an nd d d da at ta a m mi in ni in ng g t to oo ol ls s a ar re e t th hu us s
v va al lu ua ab bl le e f fo or r C CR RM M s sy ys st te em ms s a an nd d s so ol lu ut ti io on n. . T Th he e c ch ha al ll le en ng ge e i is s t to o d de ev ve el lo op p a an nd d i in nt te eg gr ra at te ed d C CR RM M p pl la at tf fo or rm m
t th ha at t c co ol ll le ec ct ts s r re el le ev va an nt t d da at ta a i in np pu ut t a at t e ea ac ch h c cu us st to om me er r i in nt te er rf fa ac ce e a an nd d s si im mu ul lt ta an ne eo ou us sl ly y p pr ro ov vi id de es s k kn no ow wl le ed dg ge e
o ou ut tp pu ut t a ab bo ou ut t t th he e s st tr ra at te eg gy y a an nd d t ta ac ct ti ic cs s s su ui it ta ab bl le e t to o w wi in n c cu us st to om me er r l lo oy ya al lt ty y a an nd d s su up pp po or rt t. . I If f a a c ca al ll l c ce en nt tr re e
p pe er rs so on nn ne el l c ca an nn no ot t i id de en nt ti if fy y o or r d di if ff fe er re en nt ti ia at te e a a h hi ig gh h v va al lu ue e c cu us st to om me er r a an nd d d do oe es s n no ot t k kn no ow w w wh ha at t t to o u up p- -s se el ll l o or r
c cr ro os ss s s se el ll l t to o h hi im m t th he en n i it t w wo ou ul ld d b be e a a t tr re em me en nd do ou us s l lo os ss s o of f o op pp po or rt tu un ni it ty y f fo or r t th he e c co om mp pa an ny y. . A Al lt th ho ou ug gh h m mo os st t
C CR RM M s so of ft tw wa ar re e s so ol lu ut ti io on ns s b ba as se ed d o on n r re el la at ti io on na al l d da at ta ab ba as se es s a ar re e h he el lp pi in ng g s sh ha ar re e c cu us st to om me er r i in nf fo or rm ma at ti io on n, , t th he ey y
s st ti il ll l d do o n no ot t p pr ro ov vi id de e k kn no ow wl le ed dg ge e o ou ut tp pu ut t t to o t th he e f fr ro on nt t l li in ne e p pe er rs so on nn ne el l. . C CR RM M s so ol lu ut ti io on ns s p pl la at tf fo or rm m n ne ee ed ds s t to o b be e
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b ba as se ed d o on n i in nt te er ra ac ct ti iv ve e t te ec ch hn no ol lo og gy y a an nd d p pr ro oc ce es ss se es s. . I It t s sh ho ou ul ld d a as ss si is st t t th he e c co om mp pa an ny y i in n d de ev ve el lo op pi in ng g a an nd d
e en nh ha an nc ci in ng g c cu us st to om me er r i in nt te er ra ac ct ti io on ns s a an nd d o on ne e- -t to o- -o on ne e m ma ar rk ke et ti in ng g t th hr ro ou ug gh h t th he e h he el lp p o of f s su ui it ta ab bl le e i in nt te el ll li ig ge en nt t
a ag ge en nt ts s t th ha at t h he el lp p d de ev ve el lo op p f fr ro on nt t- -l li in ne e r re el la at ti io on ns sh hi ip p w wi it th h c cu us st to om me er rs s S Su uc ch h a a s sy ys st te em m w wo ou ul ld d i id de en nt ti if fy y
a ap pp pr ro op pr ri ia at te e d da at ta a i in np pu ut ts s a at t e ea ac ch h c cu us st to om me er r i in nt te er ra ac ct ti io on n s si it te e a an nd d u us se e a an na al ly yt ti ic ca al l p pl la at tf fo or rm ms s t to o g ge en ne er ra at te e
a ap pp pr ro op pr ri ia at te e k kn no ow wl le ed dg ge e o ou ut tp pu ut t f fo or r f fr ro on nt t- -l li in ne e s st ta af ff f d du ur ri in ng g c cu us st to om me er r i in nt te er ra ac ct ti io on ns s. . I In n a ad dd di it ti io on n, ,
i im mp pl le em me en nt ta at ti io on n t to oo ol ls s t to o s su up pp po or rt t i in nt te er ra ac ct ti iv ve e s so ol lu ut ti io on ns s f fo or r c cu us st to om me er r p pr ro of fi it ta ab bi il li it ty y a an na al ly ys si is s, , c cu us st to om me er r
s se eg gm me en nt ta at ti io on n, , d de em ma an nd d g ge en ne er ra at ti io on n, , a ac cc co ou un nt t p pl la an nn ni in ng g, , o op pp po or rt tu un ni it ty y m ma an na ag ge em me en nt t, , c co on nt ta ac ct t m ma an na ag ge em me en nt t, ,
i in nt te eg gr ra at te ed d m ma ar rk ke et ti in ng g c co om mm mu un ni ic ca at ti io on n, , c cu us st to om me er r c ca ar re e s st tr ra at te eg gi ie es s, , c cu us st to om me er r p pr ro ob bl le em m s so ol lv vi in ng g, , v vi ir rt tu ua al l
t te ea am m m ma an na ag ge em me en nt t o of f l la ar rg ge e g gl lo ob ba al l a ac cc co ou un nt ts s, , a an nd d m me ea as su ur ri in ng g C CR RM M p pe er rf fo or rm ma an nc ce e w wo ou ul ld d b be e t th he e n ne ex xt t
l le ev ve el l o of f s so ol lu ut ti io on n s so ou ug gh ht t b by y m mo os st t e en nt te er rp pr ri is se es s. .
5 5. .2 2 C CU US ST TO OM ME ER R S SE EL LE EC CT TI IV VI IT TY Y
A An n i im mp po or rt ta an nt t f fa ac ce et t o of f C CR RM M i is s c cu us st to om me er r s se el le ec ct ti iv vi it ty y . . A As s s se ev ve er ra al l r re es se ea ar rc ch h s st tu ud di ie es s h ha av ve e s sh ho ow wn n n no ot t a al ll l
c cu us st to om me er rs s a ar re e e eq qu ua al ll ly y p pr ro of fi it ta ab bl le e ( (I In nf fa ac ct t i in n s so om me e c ca as se es s 8 80 0% % o of f t th he e s sa al le es s c co om me e t th hr ro ou ug gh h 2 20 0% % o of f t th he e
c cu us st to om me er rs s) ). . T Th he e c co om mp pa an ny y m mu us st t t th he er re ef fo or re e b be e s se el le ec ct ti iv ve e a an nd d t ta ai il lo or r i it ts s p pr ro og gr ra am m a an nd d m ma ar rk ke et ti in ng g e ef ff fo or rt ts s b by y
s se eg gm me en nt ti in ng g a an nd d s se el le ec ct ti in ng g a ap pp pr ro op pr ri ia at te e c cu us st to om me er rs s f fo or r i in nd di iv vi id du ua al l m ma ar rk ke et ti in ng g p pr ro og gr ra am ms s. . I In n s so om me e c ca as se es s, , i it t
c co ou ul ld d e ev ve en n l le ea ad d t to o o ou ut ts so ou ur rc ci in ng g o of f s so om me e c cu us st to om me er rs s s so o t th ha at t a a c co om mp pa an ny y b be et tt te er r u ut ti il li iz ze e i it ts s r re es so ou ur rc ce es s o on n
t th ho os se e c cu us st to om me er rs s i it t c ca an n s se er rv ve e b be et tt te er r a an nd d c cr re ea at te e m mu ut tu ua al l v va al lu ue e. .
H Ho ow we ev ve er r, , t th he e o ob bj je ec ct ti iv ve e o of f a a c co om mp pa an ny y i is s n no ot t t to o r re ea al ll ly y p pr ru un ne e i it ts s c cu us st to om me er r b ba as se e b bu ut t t to o i id de en nt ti if fy y
a ap pp pr ro op pr ri ia at te e c cu us st to om me er r p pr ro og gr ra am ms s a an nd d m me et th ho od ds s t th ha at t w wo ou ul ld d b be e p pr ro of fi it ta ab bl le e a an nd d c cr re ea at te e v va al lu ue e f fo or r t th he e f fi ir rm m
a an nd d t th he e c cu us st to om me er r


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5 5. .3 3 C CU US ST TO OM ME ER R L LI IF FE E C CY YC CL LE E
C Cu us st to om me er r l li if fe e c cy yc cl le e i is s a a t te er rm m u us se ed d t to o d de es sc cr ri ib be e t th he e p pr ro og gr re es ss si io on n o of f s st te ep ps s a a c cu us st to om me er r g go oe es s t th hr ro ou ug gh h w wh he en n
c co on ns si id de er ri in ng g, , p pu ur rc ch ha as si in ng g, , u us si in ng g, , a an nd d m ma ai in nt ta ai in ni in ng g l lo oy ya al lt ty y t to o a a p pr ro od du uc ct t o or r s se er rv vi ic ce e. . M Ma ar rk ke et ti in ng g a an na al ly ys st ts s
J Ji im m S St te er rn ne e a an nd d M Ma at tt t C Cu ut tl le er r h ha av ve e d de ev ve el lo op pe ed d a a m ma at tr ri ix x t th ha at t b br re ea ak ks s t th he e c cu us st to om me er r l li if fe e c cy yc cl le e i in nt to o f fi iv ve e
d di is st ti in nc ct t s st te ep ps s: : r re ea ac ch h, , a ac cq qu ui is si it ti io on n, , c co on nv ve er rs si io on n, , r re et te en nt ti io on n, , a an nd d l lo oy ya al lt ty y. . I In n l la ay ym ma an n' 's s t te er rm ms s, , t th hi is s m me ea an ns s
g ge et tt ti in ng g a a p po ot te en nt ti ia al l c cu us st to om me er r' 's s a at tt te en nt ti io on n, , t te ea ac ch hi in ng g t th he em m w wh ha at t y yo ou u h ha av ve e t to o o of ff fe er r, , t tu ur rn ni in ng g t th he em m i in nt to o a a
p pa ay yi in ng g c cu us st to om me er r, , a an nd d t th he en n k ke ee ep pi in ng g t th he em m a as s a a l lo oy ya al l c cu us st to om me er r w wh ho os se e s sa at ti is sf fa ac ct ti io on n w wi it th h t th he e p pr ro od du uc ct t o or r
s se er rv vi ic ce e u ur rg ge es s o ot th he er r c cu us st to om me er rs s t to o j jo oi in n t th he e c cy yc cl le e. .
T Th he e c cu us st to om me er r l li if fe e c cy yc cl le e i is s o of ft te en n d de ep pi ic ct te ed d b by y a an n e el ll li ip ps se e, , r re ep pr re es se en nt ti in ng g t th he e f fa ac ct t t th ha at t c cu us st to om me er r r re et te en nt ti io on n
t tr ru ul ly y i is s a a c cy yc cl le e a an nd d t th he e g go oa al l o of f e ef ff fe ec ct ti iv ve e C CR RM M i is s t to o g ge et t t th he e c cu us st to om me er r t to o m mo ov ve e t th hr ro ou ug gh h t th he e c cy yc cl le e a ag ga ai in n
a an nd d a ag ga ai in n. .F Fo ol ll lo ow wi in ng g i is s t th he e e ex xa am mp pl le e o of f a a p pa ar rt ti ic cu ul la ar r c cu us st to om me er r w wh ho o d do oe es s b bu us si in ne es ss s w wi it th h t th he e b ba an nk k a an nd d
r re em ma ai in ns s l lo oy ya al l i ir rr re es sp pe ec ct ti iv ve e o of f t th he e e ex xi is st ti in ng g c co om mp pe et ti it ti io on n. . H He er re e, , t th he e c cu us st to om me er r l li if fe e c cy yc cl le e d do oe es s n no ot t b br re ea ak k
b be ec ca au us se e t th he e b ba an nk k ( (o or rg ga an ni iz za at ti io on n) ) p pr ro ov vi id de es s t th he e c cu us st to om me er r w wi it th h c cu us st to om mi iz ze ed d s se er rv vi ic ce es s a an nd d c cr re ea at te es s a a w wi in n- -
w wi in n p pr ro op po os si it ti io on n f fo or r b bo ot th h t th he e p pa ar rt ti ie es s. .

30


5 5. .4 4 C CU US ST TO OM ME ER R V VA AL LU UE E P PR RO OP PO OS SI IT TI IO ON N. .
I In n t th he e f fi ie el ld d o of f m ma ar rk ke et ti in ng g, , a a c cu us st to om me er r v va al lu ue e p pr ro op po os si it ti io on n c co on ns si is st ts s o of f t th he e s su um m t to ot ta al l o of f b be en ne ef fi it ts s a a
c cu us st to om me er r i is s p pr ro om mi is se ed d t to o r re ec ce ei iv ve e i in n r re et tu ur rn n f fo or r t th he e c cu us st to om me er r' 's s a as ss so oc ci ia at te ed d p pa ay ym me en nt t ( (o or r o ot th he er r v va al lu ue e
t tr ra an ns sf fe er r) ). .
I In n s si im mp pl le e w wo or rd ds s: : v va al lu ue e p pr ro op po os si it ti io on n = = w wh ha at t t th he e c cu us st to om me er r g ge et ts s f fo or r w wh ha at t t th he e c cu us st to om me er r p pa ay ys s. .






31

C CO ON NC CL LU US SI IO ON N

Crm systems have greatly simplified customer handling across many industry sectors
It enables all arms of an organization to access and analyze detailed information
I It t g gi iv ve es s b be et tt te er r u un nd de er rs st ta an nd di in ng g o of f i in nd di iv vi id du ua al l r ro ol le es s, , a an nd d t th he e c cu us st to om me er rs s t to oo o f fe ee el l i im mp po or rt ta an nt t w wh he en n
b be ei in ng g c ca at te er re ed d t to o p pr ro of fe es ss si io on na al ll ly y
C CR RM M o ob bj je ec ct ti iv ve es s i in nv vo ol lv ve es s Reduced costs of sales, no need to recruit so many customers to
preserve a steady volume of business, higher customer profitability, increased customer
retention and loyalty, Evaluation of customer profitability.
I In n s sh ho or rt t, , i it t s s a a w wi in n- -w wi in n s si it tu ua at ti io on n f fo or r a al ll l i in nv vo ol lv ve ed d. .











32

B BI IB BL LI IO OG GR RA AP PH HY Y ( (R RE EF FE ER RE EN NC CE E) )

W WW WW W. .S SC CR RI IB BD D. .C CO OM M
W WW WW W. .G GO OO OG GL LE E. .C CO OM M
H HT TT TP P: :/ // /M MA AS SH HA AB BL LE E. .C CO OM M/ /C CA AT TE EG GO OR RY Y/ /C CR RM M/ /
MCKENNA, R. (1991) RELATIONSHIP MARKETING: SUCCESSFUL STRATEGIES FOR
THE AGE OF THE CUSTOMERS. ADDISON-WESLEY

GUMMESSON, E. (1987, AUGUST) THE NEW MARKETING- A DEVELOPING
LONG-TERM INTERACTIVE RELATIONSHIPS. LONG RANGE PLANNING,

RELATIONSHIP MARKETING: THE STRATEGY CONTINUUM. (1995, FALL)
JOURNAL OF THE ACADEMY OF MARKETING SCIENCE