Managing Relationships With Your Customers ( Business)

8/7/2019 Managing Relationships With Your Customers ( Business)

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Customer Relationship Management (CRM)

Managing Relationships with your Custmers



W hat is Customer Relationship Management (CRM)?

CRM is ³the development and maintenance of mutually beneficiallong-term relationships with strategically significant customers ´

(Buttle, 2000)

CRM is ³an IT enhanced value process , which identifies , develops ,integrates and focuses the various competencies of the firm to theµvoice¶ of the customer in order to deliver long-term superiorcustomer value , at a profit to well identified existing and potentialcustomers ´.

(Plakoyiannaki and Tzokas, 2001)



U nderstanding Customer Relationship Management (CRM)?

CRM is a business philosophy based on upon individual customersand customised products and services supported by open linesof communication and feedback from the participating firms thatmutually benefit both buying and selling organisations .

The buying and selling firms enter into a ³learning relationship ´ , with the customer being willing to collaborate with the seller andgrow as a loyal customer . In return ,, the seller works to maximizethe value of the relationship for the customer¶s benefit .

In short , CRM provides selling organisations with the platformto obtain a competitive advantage by embracing customer needsand building value-driven long-term relationships .



S tages in the development of a Customer Relationship

T he Pre-relationship S tageThe event that triggers a buyer to seek a new business partner.

T he Early S tageExperience is accumulated between the buyer and seller although a great

degree of uncertainty and distance exists.

T he Development S tageIncreased levels of transactions lead to a higher degree of commitment andthe distance is reduced to a social exchange.

T he Long-term S tageCharacterised by the companies¶ mutual importance to each other.

T he Final S tageThe interaction between the companies becomes institutionalized.



S tages in the Development of a Key-Account Relationship

Degree of involvement

High

Low

Nature of customer relationship

Transactional Collaborative

Pre-KAM

Early-KAM

Mid-KAM

Partnership

Synergistic KAM

(Millman and Wilson, 1995)





Functions of Customer Relationship Management

Direct functions (are the basic requirements of a company that arenecessary to survive in the competitive marketplace)

Profit;

Volume; andSafeguard

I ndirect functions (are the actions necessary to convince thecustomer to participate in various marketing activities).

Innovation:Market Access.



Functions of Customer Relationship Management

Management

DecisionProcess

Customer sensitivity

Diversity

InformationDifferentiatedoffering

Value Creation ProcessT echnology delivery processR& DTechnology integrationEfficiency , effectiveness

learning

Product delivery processConcept to launchManufacturing process

Customer delivery processSupply chainDistributionInfomediation (distributionof information)

Value-basedS trategiesPricingCommunication

(Sharma et. al., 2001)



Models of Customer Relationship Management

T he Evans and Luskin (1994) model for effectiveRelationship Marketing

Relationship marketing inputsUnderstanding customer expectations

Building service partnershipsEmpowering employeesTotal quality management

Relationship marketing outcomesCustomer SatisfactionCustomer loyalty

Quality productsIncreased profitability

Assessment stateCustomer feedback Integration

(Evans and Luskin, 1994)



Models of Customer Relationship Management

T he Brock and Barcklay (1999) model of sellingpartner relationship effectiveness

Inter dependence

Relative influence

Mutual trust

Cooperation

Selling partner relationshipeffectiveness



Managing Customer Relationships

The global companies must be involved in the following activities in order to initiate , develop and enhance the process that is aimed at building trust and commitment with thecustomer.

I nitiating 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 customer¶s 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 customer¶s needs;

D iscuss customer concerns;

Summarize the solution to confirm benefits; and

Secure commitment.





Enhancing the relationship

Assess customer satisfaction;

Take action to ensure satisfaction;

Maintain open , two-way communication; andWork to add value and enhance mutual opportunities.




Qualifying prospects for relationship building

Opportunitiesfor adding value

Potential profitability of customer

High

Low

Low High

U se a noncustomized

approach

S eek better

opportunitieselsewhere

Build a strongand lasting

relationship

Focus on

loyalty-buildingprogram



Relationship networks

The ultimate outcome of a successful CRM strategy is the creationof 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 andenduring business relationships.

The additional aspects of a global salesperson¶s job are to:

Manage customer value;Act as customer advocate; andEnhance customer loyalty and build a ³health´ and

profitable network of relationships.



S ummary

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 bothrelationship builders and relationship promoters; and

The basic premise of CRM is to offer superior value tocustomers in an effort to turn prospects intocustomers , customers into loyal customers , andloyal customers into partners.

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Managing Relationships With Your Customers ( Business)