CUSTOMER RELATIONSHIP MANAGEMENT (CRM).

Customer relationship management (CRM) is a concept for managing a company’s

interactions with customers, clients, and sales prospects. It involves using
technology to organize, automate, and synchronize business processes. The
objectives of CRM are to enhance profitability, income, and customer satisfaction.
To attain CRM, many organizations use set of tools, technologies, and procedures
to support the relationship with the customer to enhance sales. Therefore, CRM is
an issue of strategic business and process rather than a technical one (Dowling,
2002).

Customer relationship management is used to define the process of creation and

maintain relationship with business consumers. CRM is a hostile process of
identifying, attracting, differentiating and retaining customers. CRM is a sound
business strategy that is based on the philosophy of "customer is king", i.e.
Customer is put in the central place (Boris, 2012)

CRM integrate firm’s entire supply chain to create customer value at every step,
either through increased benefits or lowered costs. It results in higher profits
through increased business from a firm’s customer base. CRM is the seamless
coordination between sales, customer service, marketing, field’s support and other
customer touching functions.

Due to CRM companies knows their customers, understand their unique needs and
tailor their service or product offering to their needs in a sustainable competitive
manner that can yield significant incremental shareable value.

The practices of maintaining a long-term relationship with customers are

designated relationship marketing and more recently CRM .This is facilitate
businesses to improve in understand the customer, retain customers through better
customer experience, attract new customers, increase profitably and decrease
customer management costs. The appropriate understanding and implementation of
CRM strategy is the key success factors in present competitive market (Rajesh &
Manivannan: 2013). The significance of customer satisfaction cannot be dismissed
while happy customers are like free advertising for the company. It is necessary to
put the customer at the centre of the business according to its strategies, events and
processes. In fact, it is easier and more profitable to sell to present customers than
to find new ones. Organizations are setting themselves strategies to ensure
customer retention, and changing their employees to be more customer-focused
and service-oriented (Mohsan et al., 2011).

As Baker (2003) indicates, all businesses have been affected to some degree and
evolution which is happening in the global market place. Now, not only the
organizations aim to satisfy the customers but they attempt to do this more
efficiently and effectively than their rivals in the competitive market place to attain
their goals (Kotler and Armstrong, 2011).

The most important goal of an organization is to maintain customer loyalty and

focus on customer centric approach in their organizational and marketing strategies
(Jain & Singh, 2002). Bowen and Chen (2001) argue that having satisfied
customers is not sufficient. This is because customer satisfaction needs to have
direct impact to customer loyalty. Sivadas and Baker-Prewitt (2000) stress that
there is a rising recognition that the last objective of customer satisfaction
measurement should be customer loyalty. Many organizations merely categorize
customer satisfaction measurement as a type of “marketing intelligence” instead of
using it as a management tool to build customer service quality improvement
processes and increase profit (Linnell, 2006).

LITERATURE REVIEW

Organizational databases were the only source of information that was being used
for the Direct Marketing (Khedkar, 2015). Christian Gronroos and Evert
Gummesson were the first one to introduce relationship marketing and its impact
on consumers. According to analysts there existed different value disciplines that
gave knowledge on customer intimacy. At the start only a few developments led to
concept generation of Customer Relationship Management, however, with
advancing technology, it soon developed into contact management system that was
based on the web.

One of the convincing definitions describing CRM is presented by the Gartner

Group in 2004 which describes it as technology enabled strategy. A Few years
back the prime focus of firms was on the product, but now the development of
CRM has allowed the focus to shift towards the customer furthermore the customer
requirements are the main advocate of propositions.

In previous times no proper attention was given to customers and customers were
neglected. Customers were unable to find any replacement of their current
seller/producer or may be the suppliers others were also deprived of quality and
service aspects and the rapid growing market did not bother their customers and
the utmost satisfaction of needs and wants of customers. Increasing competitions
and increase in competitive trends in today’s market environment increases the
likelihood to retain customers as to safeguard the company against the raising
competitions. To achieve this goal customer retention is required. Ramakrishnan,
(2006:1) defines customer retention as the marketing goal of preventing customers
from going to the competitor. Organizations make existing customers their focal
point in order to put efforts to retain them and to carry on their business
relationship with them through customer retention. (Mostert et al., 2009:120).
However, the number of customers who continue their relationship with the service
provider in the specific time duration such as a year is also referred to as customer
retention. (Dawes, 2009: 232). The success of businesses in today’s competitive
environment is mainly based on customer retention. Fluss (2010) observes that
competitors are always looking for ways to capture customers by offering them
better deals. Retention is the process of having close & long relationship of
customers with service provider. Many studies report that it is more expensive for
the organization to attract new customers as compared to adopting strategy to
retain existing customers. (Kelley Gilbert, & Mannicom, 2003). F. F. Reichheld &
Schefter, 2000, found that it is more economical to maintain relationship with
existing customers because they are fewer prices responsive than new customers
existing customers are not only less price responsive. Customer retention directly
influences extended lifetime values and benefits which is more beneficial
opportunity for organizations that look for enhancement and prolong business
activities and those that are looking for ways to protect them from market decline
which is the consequence of reducing economy. (Gee et al., 2008). In support of
this argument, Lombard (2009) states that the companies are pushed by the market
to retain customers where the possession of customers is low. When loyalty of
customer is diminishing and sales are worsening the business environment,
customer retention becomes the most essential part of that business environment.
In such scenarios, if a key customer is shifted towards the competitor
organization’s profitability and growth would be considerably affected.

With the advent of time and technology, the marketing practices are also changing.
The new and modern marketing is based on acquiring knowledge regarding
customers and knowing their experiences (McKenna, 1991, Payne et. al, 2005,
Payne et. al, 2006). The term CRM is being used widely these days. Customer
relationship management is a two way process, also known as interactive process
that utilizes the information of customers to maintain relationships with customers.
CRM is considered as a cycle consisting of important activities like finding
knowledge, market planning, enhancing the interaction with the customers and
analysis refinement (Buckinx et. al, 2007, Swift, 2001). Ryals and Knox (2001) are
of the view that the fundamental aspects of CRM are strong relationships, customer
retention, and delivering superior and high quality services to the customers with
the help of process management. Those companies who want to implement the
CRM strategy should create integration between different departments of the
organization. The walls between every unit should be broken down, especially
marketing department should closely work with the IT department so that customer
information can be retained and utilized for the purpose of customized production
and relationship management. Since late 1980’s the trend of database marketing is
amplifying which shows the influence of IT on marketing. It facilitates the firms to
maintain long term propitious relationships (McKenna, 1991).

Customer relationship management (CRM) is a latest idea in all forms of

businesses that has showed its importance quickly over the preceding last years,
and will expected to prolong in upcoming future with addition of latest
technologies & value added services. CRM focus on the concept of marketing mix
variables the including 'four Ps' of marketing (product, price, place and promotion
(E. Xevelonaki, 2005).CRM provides organization with the chance to employ
relationship marketing on a company ample basis successfully. CRM is basically
technique of relationship marketing and process that enables a firm to identify,
evaluate, analyze and serve customers to improve customer relationship, so
organization may able to retain market share through existing customers, and may
help to provide retaining capabilities of existing customers(Z.S. Dimitriades,
2006). With the initiation of internet and new technology advancement, the idea of
CRM has been transformed to electronic CRM (e-CRM). E-CRM is a combine
process of hardware, software technology process, its useful applications in
enhancing technology for customer services and organization commitment to
improve deficiency in customer service & to retain customer (D. Norton, 2007).
Ab Hamid, 2005, focused on the Electronic

Technology has played the significant role in the development of CRM over the
years, many new ways of reaching to the customer have been innovated, and the
newly developed software helps in obtaining better insight and a much broader
view of the customer.

CRM practices in the world are not confined to any single industry or sector, but
each sector has its own demand to meet. The banking industry in Jordan due to
tough competition has the liability of building strong customer relationship so that
they could satisfy their customer (Azzam, 2014). Likewise, each sector, even
existing in a separate region has varied demand for CRM, some do it to beat their
competition, and some just do it for the purpose of differentiation.