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Customer Relationship Management


Customer Relationship Management

If an organization cannot meet the expectations of its customers then it will struggle to survive. Ideally the organization should exceed the expectations to maximize the customer satisfaction level of its customers, and also the credibility of its products and services in the eyes of its customers. Customers usually become delighted when the organization under promises and over delivers. Over promise and under delivery results into the customers becoming unsatisfied. Customer relation management (CRM) is the prescription to keep the customers happy and satisfied.



CRM is an essential part of modern business management. It is that part of the system in the organization which deals with the relationship between the organization and its customers. It is the set of those processes which manages organization’s interactions with current and future customers. CRM entails all aspects of the interaction that the organization must have with its customer, whether it is sales, marketing, feedback or customer service related, and technical support.  These four main components of the CRM is shown in Fig 1.

Component of CRM

Fig 1 Main component of CRM

Customers are the lifeline of any organization, be it a large multinational corporation with several thousands of employees, with multi location and with a multibillion turnover, or a small scale industry with a few employees and a small number of customers. CRM involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support. The processes of the CRM are related to the principles, practices, and guidelines that the organization follows when interacting with its customers.

Efficient customer relationships are at the heart of business success. From the organization’s point of view, this entire relationship not only encompasses the direct interaction aspect, such as sales and/or service related processes, but also in the forecasting and analysis of customer trends and behaviours, which ultimately serve to enhance the customer’s overall experience. CRM also involves deep customer insight and personalized engagement in order to stand-out from the competition and deliver a relevant experience at every step of the customer journey. The characteristics associated with the CRM are reliability, responsiveness, accessibility, safety, courtesy, consideration, communication, recognition and competence. Out of these characteristics, communication is central to a successful CRM. Communication needs to be consistent, on time, focused, relevant, reliable, coherent, effective, useful, and of high quality. Organizational employees who usually deal with the customers are keys to successful and effective CRM. These employees not only need proper training but also needs positive attitude, customer orientation, customer focus, organizational skills, and analytical skills.

CRM is a strategy used to learn more about the needs and behaviours of the customers in order to develop stronger relationships with them. It is a strategic process that helps the organization to understand better the needs of the customers and how the organization can meet those needs and enhance their bottom line at the same time. This strategy depends on bringing together lots of pieces of information about customers and market trends so that the organization can sell and market the products and services more effectively. CRM is a business strategy that enables the organization to increase the revenues and achieves the following.

  • Understand the customer and his requirements
  • Offer better customer services
  • Retain customers through better customer experience
  • Attract new customer
  • Help selling products more effectively
  • Reduce/eliminate customer complaints by addressing them urgently and effectively.
  • Win new clients and contracts
  • Help sales personnel to close deal faster
  • Increase profitability
  • Decrease customer management costs

CRM focuses on the relationship with the customers. Successful organizations use the following three steps to build customer relationships.

  • To determine mutually satisfying goals between the organization and its customers
  • To establish and maintain rapport with the customers
  • To create and maintain positive feelings in the organization and the customers

Effective and efficient CRM must influence those set of conditions which the organization and the customers both have to consider when building the relationship. These conditions must meet the following wants and needs of both the parties.

  • Organization need is to make a profit for survival and growth
  • Customers needs are to get good service, quality products at acceptable price

CRM can have a major impact on an organization by shifting the focus from the selling of the product to customer satisfaction. It makes organization to find out what the needs and wants of their customers so that they are able to plan the production and deliver the products and services needed by the customers. The knowledge of customer’s need also make organization think what they should do so as to fulfill those needs. It streamlines the procedures to offer the customer what he requires and not what the organization can make. Further when the organization work for competencies needed for an effective CRM process, its overall performance improves. In fact CRM can bring a significant change in the paradigm within the organization and can provide the organization a quantum jump with respect to business activities.

The usual thinking in an organization is that customers want cost effective products or services that deliver required benefits to them. On the other hand customer wants his needs to be satisfied. His needs are distinctly different and much broader than the usual perception. It not only include the product and service but also the buying and selling process, the communication between supplier and customer and customer supplier relationship. CRM helps supplier to integrate customer and his personnel into all aspects of the supplier business with him. Hence CRM is a relationship with the customer which is deeper and wider than the traditional ‘arms length’ supplier customer relationship which is based upon a simple transaction or trade. CRM recognizes that the transaction takes place between the people of the organizations of the supplier and customer which is much more than delivering a product or service to a customer.

The ultimate purpose of CRM, like any other organizational initiative, is to improve its operating margins which mean its profit. When CRM is implemented then the improvement in the operating margins is achieved mainly by providing a better service to the customers in comparison to the competitors. Along with providing better service to the customers, an efficient CRM capability of the organization also reduces costs, wastage, and complaints (although there may be some increase initially, simply because without CRM these would have stayed hidden). Effective CRM also reduces employee’s stress as services and relationships improve. CRM also enables instant market research since effective lines of communications with the customers give direct and constant market reaction for the products, services and performance, far better than any market survey. CRM also helps to grow the organization’s business since customers stay with the organization longer, their churn rate reduces, referral to new customer increases from increasing numbers of satisfied customers, demand reduces on employees who are otherwise fire fighting and troubleshooting with the customers, and overall the organization’s service improves with employees working more efficiently and more happily. Further an effective and integrated CRM approach has the following additional benefits for the organization.

  • Increased customer satisfaction
  • Growth in the number of customers
  • Increased access to the market and competitor’s information
  • Improves organizational sustainability by ensuring long term profits for the organization.
  • Provides information to the organization regarding its products and processes.

Because of above reasons organizations must acknowledge that there is a vital need to maintain a strategic focus on CRM and to resource and manage it appropriately. Support and ownership of the top management is essential for successful implementation of CRM.

Technology and the Web has changed the way organizations approach CRM strategies because advances in technology have also changed consumer buying behaviour and offers new ways for companies to communicate with customers and collect data about them. With each new advance in technology—especially the proliferation of self-service channels like the Web and smart phones, customer relationships is being managed electronically. Many aspects of CRM rely heavily on technology. The strategies and processes of a good CRM system will collect, manage, and link information about the customer with the goal of letting the market and sell products and services effectively.


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