Customer Relationship Management and Its Elements


A huge customer base is an important tool that ensures a company gains a competitive advantage over its rivals in the market; the more the customers the more successful the company is. To ensure that customers stay and remain loyal to the business effective relationship must be established between them and the company. The customer can be described as the most valuable asset and hence must be retained through effective interactions. With effective customer relationship management, the company is assured that the customers will get the best from the company and will be aptly satisfied.

Customer relationship management (CRM) should be offorded to all employees of the firm in an effort to create the right atmosphere in the firm. This ensures that the customers are satisfied and feel at home whenever they visit the firm for business. The customer relationship management process starts with the planning phase which will be aimed at Retention, Efficiency, Acquisition, and Penetration well known as the REAP formula (Starkey, & Woodcock 7)

The best customer relationship management is where management poises business objectives against the customers wants and necessities, the customers and elements involved to bring high profits. Without these strategies the company stands to loose its customers to other more comfortable customer oriented businesses. Customers are delicate and every move the firm makes to retain them should be objectively planned at all times to make them get satisfaction in all aspects of life such as emotional, physical, and product wise. Many people thought that customer satisfaction was only necessary in the services industry but this has presently changed and so has the customer relationship strategies. Indeed, each company has its own initiatives to attract, satisfy and retain their customers.

Customer relationship management

In their book “customer relationship management”, Anderson & Kerr (2) define it as a “comprehensive approach for creating, maintaining and expanding customer relationships”. This definition takes into account all the departments of the firm or business without giving emphasis on any section. This gives customer relations a broader look with all the departments working in harmony in order to satisfy the customers. Without this harmonic cooperation, there will be shortfalls in the process of satisfying the customer. Their definition also include a plan and notion of considering and handling the customer. This must be a clear laid down strategy that will seek to create, maintain and expand the targeted net-worth customers of the firm.

Customer relationship management can be said to be closely related to public relations and they work hand in hand to improve the image of the company, though CRM is more comprehensive to all departments. The firm’s interactions with customers and sales projections are managed and nurtured through comprehensive strategies. Technology is also incorporated in order to categorize, make routine and synchronize all processes of the firms including sales, technical, marketing, and customer service (Gamble, Stone, Woodcock & Foss 244).

The CRM strategy starts from the firm’s management. It is all inclusive and an overhaul plan that considers all the company’s staffing procedures, productivity targets, objectives and goals. Customer relationship management tends to focus on the whole cycle that a customer undergoes, and involves observing and identifying their buying habits that will help comprehend and forecast the behavior of the customers.

Thus all departments of sales, marketing, and production should be stakeholders in the CRM efforts. There should be effective communication between organization and the customers. The customers will be varied and will be people who associate with the organization in such ways as; consumer, suppliers, distributors, bankers and consultants. This will be objective in creating a good rapport between the organization and the customers whiles protecting the image of the company that will be sold by those the company relates with.

Benefits of CRM

As detailed by Woodcock, Stone, & Foss (20), the benefits are numerous and rewarding. Firstly, it gives an objective assessment of the best way the firm deals with its customers and the resulting outcomes correlate to business performance and it requires less time from the staff. This can be view as self advertisement and will be beneficial in enhancing an increased product and service awareness which boosts sales and consequently the profitability. Moreover, it majors in maintaining and establishing the existing and new potential consumers in a given target market.

In most cases, a company seeks the advertising services when it intends to launch a new product or service in the market. The trial advertising mainly focuses on encouraging consumers to purchase the product or service in their initial stages; however, the customers must be maintained through CRM. The firm can also intend to market the existing products and services in order to expand the already available market. CRM will be more effective in this endeavor. This will make the firm’s plans to raise its production level easier and cheaper (Starkey, & Woodcock 5).

The main aim of this form of advertising is to build and increase the consumer loyalty. In addition, a firm can opt to advertise in case it plans to undertake brand switch or switch-back strategies. Such moves are aimed at enhancing the firm’s competitiveness in the market. Advertising liaises the consumers to the company. Customer relationship management also gives the general public a good understanding on how the company runs. The department also listens and addresses the consumer’s problems, thus contributing to firm potential growth. It is also the work and responsibility of the public relation department to ensure better and improved firm’s reputation in the public eyes.

CRM also helps the firm achieve its objectives in reorganizing its sales and marketing strategies, achieve a higher sales output, have increased cross-selling and up-selling chances, better service offering and loyalty of the customers that makes it easier to retain them. CRM seeks to establish call centers which will be super efficient given effective strategies, superior close rates and stock turnover, better profiles and targets, minimization of expenses, low costing and a high market share. Coupled together, all the above benefits will yield the ultimate goal and objective of the firm which is maximization of profits (Gamble, Stone, Woodcock, & Foss 310).

QCi customer management model

Foss & Stone (31), in the book “CRM in financial services: a practical guide to making customer relationship management work” give the QCi customer management assessment tool (CMAT) as a clear and uncomplicated option to measure the quality offered by the strategies of CRM in the company. The origin of the whole process is through consulting widely from all stakeholders. The assessment model takes in to account customer management analysis of every stage; this will be aimed at both customer and firm’s satisfaction. A wide range of questions must be answered through the use of the QCi software. All the elements of practical customer management are considered with the market statistics and predictions considered. The stages involved in the analysis include; targeting, enquiry management, welcoming, getting to know and maturity stage (Foss, & Stone 32).

Targeting involves where the customer is viewed as the appropriate consumer for the firm’s products and is approached to consume. The problems and chances in this stage are that it is not specific enough and if the company tries to cross-sell then it may lead to a loss. Many customers can be targeted through various ways such as direct mails advertisements which will be overlapping in coverage and a waste of resources such as time and budgetary money. The targeting stage should be very objective to avoid such wastes.

The second stage is the enquiry management stage; this is where the customer has been convinced to join and is already in the process to join the customer base. The problems and opportunities in this stage include the fact that this stage is short but very critical, thus the effective management of it will lead to wide customer base when they join. The company is able to judge whether the customer is asset worth or not and the firm can transform the process from being expensive to being worth. This stage makes the firm to learn the customer’s expectations which will be used in the future for further relations in case the firm wants to up-sell.

The welcoming and third stage comes immediately the customer agrees to join the customer base. The firm must ensure that the customer is securely convinced and understands everything. The customer requires knowing the contact person and other channels that maybe useful to him. The problems and opportunities in this stage include; when it is not done correctly some customers may not know the actual procedures and contact measures involved. In the options that are more net worth, customers may need assurance which the staff undertaking the stage may not be able to guarantee. Moreover, the customers may be able to tell the weakness of the company if the process is not professionally done especially in the buying cycle.

Getting to know is the forth stage and most important since the exchange is happening. This phase establishes the customer’s additional needs and their profiles in the use of the product. The customer’s qualities such as honesty, ability to pay among others are also established (Foss, & Stone 32). The problem and opportunity accompanied by this stage is that, often the companies may assume the stage doesn’t exist and the customer move to the maturity stage which is account management. Especially in the financial sector of business, this is extremely important since most default payments later if they are not prevented in this phase. This helps the firm to establish the communication behavior, brand attitudes and satisfaction once it establishes the loyal, predictable customers; thus will help in future planning. This stage leads to the mature stage where the customers are already in the process and they can be used to recruit other loyal customers.

When measuring the effectiveness of customer relationship management, there are certain scores that must be considered. These include; analysis and planning, proposition, people and organization, information and technology, process management, customer management activity, measuring the effect, and understanding the customer experience. In analysis and planning, the firm must evaluate the value, behavior, and attitudes of the customers. Each customer is unique and different and this should aim at external and internal knowledge of them all. Value should be positive, realistic, strategic, and progressive. Behavior will identify maintenance rates, type of customers, and the amounts the customers give. Attitude identifies the tastes and matching the customers and firm have. When all the values, behaviors, and attitudes are known then the process of planning can begin, which will be guaranteed of cost effectiveness in the REAP strategy (Woodcock, Stone, & Foss 78).

The proposition is the step where each particular segment proportion is established. This identifies the commitment of the customers and how they deliver it and is expressed in price, service, business interactions, associations, logistics, and goods. Customer management activity is delivering of the plans and objectives though marketing, sales, and customer services and is usually directed to; acquisition and retention, handling queries, support to new and upgrading clientele, proper management of the old clients, proper satisfaction procedures, and attracting passive and lost clients.

People and organization aims at recognizing and developing competency. This involves sourcing suppliers that are well conversant with the firm’s objectives and goals to help in CRM. Measuring the effect includes identifying the people, progression, productivity, channels and customer activity which must emphasize the goals, vision, and objectives of the firm (Foss, & Stone 32). Customer experience gives the moments of truth. The company answers the questions; how well it is performing? How it can improve? What competitive factors are there? And what does the market wants? While answering these queries the real customer experience must be accounted for.

Information and technology emphasizes on the entire model information forms the basic part of the model and should be enhanced at all levels (Woodcock, Stone & Foss 108). With huge investments placed in CRM then the process must guarantee the returns that are really worth. This translate to the use of the customer experience management should be optimized by visualizing things in the view of the customers so that the CRM reaps maximally.


Customer relationship management can be described as an effective tool that will major on the establishing intact positive relations with the customer to enhance sales and maximize profits. Customer relationship management should be offered to all employees of the firm in an effort to create the right atmosphere in the firm. This ensures that the customers are satisfied and feel at home whenever they visit the firm for business. CRM can be said to be related to public relations and both work hand in hand to improve the image of the company though CRM is more comprehensive to all departments.

The firm’s interactions with customers and sales projections are managed and nurtured through comprehensive strategies. Technology is also incorporated in order to categorize, make routine, and synchronize all process of the firms including sales, technical, marketing, and customer service. The benefits the firm stands to gain are more than they stand to loose if an effective CRM strategy is implemented. This will be based on planning and aimed at Retention, Efficiency, Acquisition, and Penetration so as to dominate the markets through a huge customer base. Customers trust must be won by the company to ensure higher sales this trust will help the firm attract more customers in the quest to achieving its goals. The customers’ value should not be underrated at all times since they are the key to higher heights.

Works Cited

Anderson, Kristin & Kerr, Carol. Customer relationship management. New York, McGraw-Hill Professional. 2002. Web.

Buttle, Francis. Customer relationship management: concepts and tools. Oxford, Butterworth-Heinemann. 2004. Web.

Foss, Bryan & Stone, Merlin. CRM in financial services: a practical guide to making customer relationship management work. London, Kogan Page Publishers. 2002. Web.

Gamble, Paul R. et al. Up close & personal?: customer relationship marketing @ work. Ed.3. London, Kogan Page Publishers. 2006.Web.

Starkey, Michael & Woodcock, Neil. CRM systems: Necessary, but not sufficient. REAP the benefits of customer management. Journal of Database Marketing. Vol.9. Issue.3. pp.267-275. 2002. Web.

Woodcock, Neil, Stone, Merlin & Foss, Bryan. The customer management scorecard: managing CRM for profit. London, Kogan Page Publishers. 2003. Web.

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