Customer relationship management (CRM) is a commonly used to manage a company’s interactions with customers, clients, and sales prospects. It involves using technology to organize, mechanize, and synchronize business processes principally sales activities but also those for marketing, customer services and technical support. The main objective is to find, attract and win new customers. The main objective of customer relationship management is to improve the quality and efficiency, decrease the cost, increase profitability and improve planning. Customer Relationship Management is basically the industry jargon which is used in information technology and is mostly popular in methodologies, software and internet to help in maintaining the whole database of customers. This database provides information regarding to salesperson, management and above all the relevant information of customers.
It helps the marketing personnel to determine, identify and target the best customers and also to manage the marketing campaigns. Many organizations have started using CRM software to maintain good relationship with their customers. CRM software provides the whole information of the customers to their employees in order to identify their needs and also to satisfy their customers. Satisfying the customers means to increase the profitability. So main objective is to identify the most profitable customers and also to provide them highest level of services.
It is not useless to say that CRM is a customer centric philosophy and if customer relationship is the heart of business success then customer relationship management is the soul. It is basically the combination of people and technology which facilitates to gain insight into the values and behaviors of the customers. In simple words customer relationship management is the way to design the systems and procedures so that customer’s priorities should be identified instead of imposing organizational own choices on them. In this modern world of globalization, now the customers have options either to opt for the product or not?
For past many decades the main focus of firms was to acquire new customers. However firms have now gradually realized the importance of retaining the existing customers. Customer Relationship Management sounds simple but it is the combination and coordination of people, technology and processes which are designed to understand and manage a company’s relationship with customers. The purpose here is to maximize profits so that the optimal balance can be achieved between corporate investments and customer satisfaction level. “CRM applications help organizations assess customer loyalty and profitability on measures such as repeat purchases, dollars spent, and longevity” (Chen & Popovich, 2003, p.273).
Customer Retention is the most important task and organizations carry out this activity in order to reduce customer shortcomings. It is an ongoing process i-e starts with the first interaction with the customer and continues till the entire lifetime of the relationship. Customer Retention is not only concerned with the product or services of the organization but it is also related to customer dealing and its goodwill of the company. If you are giving your customers more than their expectations then you might be able to retain them for a longer period of time. Instead of increasing the profitability the main focus here is to enhance the customer’s value.
It is common for customers to be dissatisfied with the relationship they have with their service providers (Colgate and Lang, 2001; Colgate and Norris, 2001; Gronhaug and Gilly, 1991; White and Yanamandram, 2004), but how customers react to dissatisfaction is the crucial issue for marketing managers (Richins, 1987). Just as satisfied customers are not necessarily loyal (Rowley and Dawes, 2000), dissatisfied customers are not always disloyal (Hirschman, 1970). Some customers take no action at all when dissatisfied, whereas others take various actions—such as complaining directly to the provider about the service or switching suppliers (Richins, 1987). Ultimately, the buyer’s actions, and how the supplier reacts to those actions, determine whether that customer is retained (Singh, 1988).