While Retaining Customer Loyalty Has Been a Sales and Marketing Principle for Quiet a Long Time
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While retaining customer loyalty has been a sales and marketing principle for quiet a long time, Customer Relationship Management (CRM) is actually a tremendous step forward in creating a system that can provide a means for retaining individual loyalty in a world of about 6 billion population (Croteau & Li, 2001). Greenberg (2001) stated that in order to understand CRM, you must also understand the changing nature of the customer because customers are not what they used to be. Khalifa and Liu (2001) noted that, a survey of more than 1.600 businesses and IT professionals conducted by the Data warehouse Institute, found that, some of the respondents have cRM project budgets of over $ 1o million. This finding indicates that CRM is very important for organisations. The Cap Gemini further added that, the average total investment in CRM of 3oo u.s and European companies was $ 3.1 million. More than 69% of the companies surveyed spent less than s 5 million and more than 13% or the companies spent over $10 million (Sterne, 2000). This finding also indicates that a great number of companies spend great amount of their budget on CRM and therefore in our opinion we believe that it is important for service companies to know the objectives of their CRM initiatives and the type of benefits these organisations intend to denive from them. A survey of 300 companies conducted at a CRM conference concluded that CRM is not a cheap, easy, or fast solution (ibid). Mooney (2000) futther added that, more than two-thirds of CRM projects end up in failure. However, he went further to say that, the successful third could obtain up to 75% retumn on investment (ibid).
Thompson (2004) found four broad factors that were driving 72% of the return on investment (ROl) of CRM. They were: Customer-centric strategy. frontline training and support. organization change, and appropriate use of metrics. These findings again support the fact that the actual objectives of CRM initiatives and the benefits should be ascertained. This further support the statement by Balaji and Alexander (2003) that the purpose of CRM is to identity, acquire, serve and retain profitable customers by interacting with them in an integrated way across a range of communication channels. According to Thompson (2004) CRM is a business strategy to acquire grow and retain profitable customer relationships, with the goal of creating a sustainable competitive advantage
References Croteau, A-M. and Li, P. (2001). Critical Success Factors of CRM Technology I nitiatives.Canad ian. Jourmal of Administrative Sciences. 10, 21-34.
Greeenberg, P.(2001). CRM at the Speed of Light: Capturing and Keepin Customers in Intemnet Real Time. Berkeley: Osborne/McGraw-Hill.
Thompson (2004) found four broad factors that were driving 72% of the return on investment (ROl) of CRM. They were: Customer-centric strategy. frontline training and support. organization change, and appropriate use of metrics. These findings again support the fact that the actual objectives of CRM initiatives and the benefits should be ascertained. This further support the statement by Balaji and Alexander (2003) that the purpose of CRM is to identity, acquire, serve and retain profitable customers by interacting with them in an integrated way across a range of communication channels. According to Thompson (2004) CRM is a business strategy to acquire grow and retain profitable customer relationships, with the goal of creating a sustainable competitive advantage
References Croteau, A-M. and Li, P. (2001). Critical Success Factors of CRM Technology I nitiatives.Canad ian. Jourmal of Administrative Sciences. 10, 21-34.
Greeenberg, P.(2001). CRM at the Speed of Light: Capturing and Keepin Customers in Intemnet Real Time. Berkeley: Osborne/McGraw-Hill.
