Developing Marketing Strategies and Plans 1, How does marketing affect customer value?
Customer satisfaction has always been a key element in the pursuit of corporate goals and objectives. Customer relationship management CRM first gained prominence in the early s.
In short, CRM is about effectively and profitably managing customer relationships through the entire life cycle. The aim of CRM is to build customer equity; customer equity is the sum of lifetime values of all the customers.
A data warehouse is a company-wide electronic database of detailed customer information. The purpose of data warehouse is not just to gather information but also to place it into a central location for easy access.
Once the data warehouse locates the data at a central place, Crm philip kotler data analysts use the data-mining techniques to examine the mounds of data to find out interesting facts about the customers. Need and Importance of CRM: Better service to customers: CRM provides more avenues for customers to communicate and explain their needs to the organization through numerous contact points.
Customers get increased satisfaction and a feeling of being special and important because of the increased personalization of services and customization of goods offered to them. Some banks, such as Syrian Catholic Bank provide personalized services to their important customers.
Customization of market offerings: Companies can customize a product or service depending on the data available with the firm. The firm can facilitate customer-company interaction through the company contact centre and web site.
Such interactions help develop customized products. Reduction in the customer defection rate: CRM emphasizes on training and development of the employees to become more customer oriented. Due to CRM training and development, employees show care and concern towards the valuable customers; therefore, the customer defection rate may be reduced to a great extent.
Increase and improvement in long-term relationships: Some firms treat their customers as partners. If the customer gets involved with the firm, they are more likely to remain with the firm. Increase in customer equity: CRM increases customer equity. Firms focus the marketing efforts more on the most valuable customers MVCs.
The main aim of CRM is to produce high customer equity. Customer equity is the sum of lifetime values of all customers. More focus on MVCs will enable a firm to increase the customer equity. The firms that adopt CRM get competitive advantage in the market. They can face the competition with much ease.
Competitive advantage helps in generating higher returns on investment. Building and maintaining corporate image: The image of the firm also gets enhanced. Loyal customers become evangelists. The evangelists spread a good word about the company and its products.
This enables a firm to get additional customers to its fold. Higher return on investment: Due to CRM, a company gains a position to generate higher returns on investment. This is because of the repeat purchases on the part of the loyal customers.Dr Philip Kotler, the Marketing Guru recently visited India and shared that he has refined his legendary theory of Marketing which was based on the four P’s – Product, Place, Promotion and Price and has added another P to the same called Perception which describes the sentiment about the .
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