Customer Relationship Management (CRM) is a strategic initiative of companies to defend and nurture their market position by providing superior customer value to the most valuable customers. The outcome of this process is customer loyalty and competitive advantage. This paper argues that while CRM offers exciting opportunities to companies, it will be difficult to optimize benefits from their investments in CRM-related activities without first building a sustainable customer-oriented culture within the organization. While the use of technology is central to CRM, what the type of technology is and how it is selected and implemented within the organization becomes the greatest challenge to companies.
Customer Relationship Management (CRM) is a strategic initiative of companies to defend and nurture their market position by providing superior customer value to the most valuable customers. The outcome of this process is customer loyalty and competitive advantage. Many companies have invested heavily in CRM technology, but research shows that the performance of these investments has been poor due to the absence of proper customer orientation and a customer- driven culture within the organizations (Kotler, 2005). Industry estimates indicate that more than $9 bn have been spent in the US alone and CRM-related expenditure with the global growth of customer supplier relationships over the internet, intranet, and extranet services will now exceed $3 tn.
The importance of CRM in creating customer value in business cannot be underestimated. Without customers, a business has no reason to exist. For any business organization, customer value creation is an essential undertaking to maintain its strategic positioning and competitive edge over its competitors. It remains a key differentiator of its business and an ongoing but extremely challenging exercise that requires continuous efforts to sustain the desired customer value. |
