Customer Relationship Management

Posted by Melda Research on March 21st, 2019


Customer relationship management refers to a system containing practices, tactics and skills that organizations apply to assess and handle interactions between the company and its customers. A customer is a crucial stakeholder to a business (Knox et al., 2007). A customer receives the products (goods or services) that both a profit and nonprofit business provides. The level of customer relations determines the performance of the company. Establishing a customer relationship management is very important in a business especially if the business seeks to create deep market penetration and customer loyalty (Kumar, 2010). Businesses mainly use the customer relationship management systems to handle customers. However, businesses can also apply the systems in business to business relations. The article analyzes customer relationship management and provides a detailed overview of the aspects of customer relationship management.

Importance of Customer Relationship Management

The first step in understanding customer relationship management is being conversant with the urgency of implementing the system. Customer relationship management is the best possible method of handling and creating relationships with customers. The principles of customer relationship management create a conducive environment for business by initiating strong bonds between the customers and the business (Kumar, 2010). It is an effective market ploy that allows the company to gain the loyalty of the customer as such making it easy to identify the actual needs of the clients. Customer relation management broadens the number of clients that a business can interact with in connection it assists in market penetration (Knox et al., 2007). Customer relationship management is very helpful especially when carrying out metrics before implementing a new decision. The interactions between the company and its clients provide information on potential ventures as well as potential threats when implementing the action (Kumar, 2010)). The system provides a centralized program that is readily available for reference. It increases the productivity of the staff by reducing the amount of time spent to search and relate information of a particular customer. The introduction of the system creates organization and neatness as it maps out using a progressive report the relationship of the customer with the organization. Finally installing the system is relatively cheap and easy because it does not require much skill and technology (Knox et al., 2007).

Element in an effective Customer Relationship Management

The development of an effective customer relationship management follows several principles knowledge, target, sale, and service. It is imperative that the customer relationship management understand the company’s markets and customers (Knox et al., 2007). The system acquires the knowledge through detailed exploration of the respective fields. The customer relationship management should have a target. It should create a visualization of the people it wants to reach out to which helps the system develop the offer (Knox et al., 2007). The third element sale concerns acquiring customers for the company using marketing strategies. Finally, the customer relationship management works on maintaining the customers and building customer loyalty (Knox et al., 2007).

Customer Relationship Management Technology

Customer relationship management entails the strategies and practices applied in handling and monitoring customer interactions with the company. The system takes information from clients and organizes the data in an organized manner (Knox et al., 2007)). The introduction of technology such as customer software to the customer relationship management makes work easier for the servers. The customer relationship management software combines data obtained from clients and documents it into a single CRM database that allows the users to access it easily (Payne& Frow, 2005). The software also adds a feature that allows the users to record customer interactions and computerize various workflows.  Customer software has the following primary features

Marketing automation

Marketing automation features in CRM tools allow the users to computerize repetitive tasks that augment marketing efforts to clients at different points of the project lifecycle (Payne& Frow, 2005).

Sales force automation

Sale force management prevents duplicate efforts between a sales person and a customer using automated trailing of every contact and follow-up between both parties (Payne& Frow, 2005).

Contact center automation

The feature reduces tedious aspects of a contact center user’s responsibility. It utilizes pre-recorded audio that assists the company in solving customer’s problems and distributing information. The company can utilize software tools that integrate with the agents desktop to handle requests from customers. It helps the organization save time and simplify the customer service process that creates customer satisfaction and loyalty (Payne& Frow, 2005).

Geolocation technology (location-based services)

It is an optional feature in some of the CRM tools that create geographic marketing campaigns based on the customer’s physical residence or location. The feature can integrate with popular location-based GPS applications that allow tracking and location identification (Payne& Frow, 2005). Businesses can use the geolocation technology as a networking or contact supervision tool in order to find sale opportunities based on location (Payne& Frow, 2005).

Challenges encountered in Customer relationship management

Even though customer relationship management brings about effectiveness in the performance of a company as well as the services, it offers the system also faces challenges. The customer relationship management technology is very effective in the system; however, without proper management the system is not useful to the company (Campbell, 2003). The data needs to get analyzed assessed and distributed so that the workers can use it (Payne& Frow, 2005). Another daunting challenge to the customer relationship management is providing a cross-channel consumer experience that is constant and dependable. The study shows that consumers do not like the contact center experience. Instead, they want multiple avenues of contact with a company. Others expect flawless dealings across many different channels (Chen& Popovich, 2003). Companies also struggle noticing real sales projections with their data. New technologies that combine CRM data with third-party data from are emerging to provide sales and marketing coalitions with better sales diagnosis. The approach only works when companies clean up the current data to eliminate duplicate and incomplete records before they add external sources of information to the CRM data (Chen& Popovich, 2003).

Potential improvements in customer relationship management

Improving a customer relationship management is an important aspect of running an effective system. The CRM might require adjustments because it is faulty, or the business simply wants to elevate its performance to boost the productivity of the company. When implementation of the CRM seems successful, potential improvements include launching a continuous improvement process (Chen& Popovich, 2003). A business can apply the following four paths to produce effective improvement. Evaluate the company’s policies (mission, culture, and values) if necessary modify them to encourage growth (Campbell, 2003). Assess and make alterations in the customer relationship management strategy where necessary (Knox et al., 2007). Reviews, the way agents, manage each customer relationship management activity and make changes that elevate its performance. Explore the material used and human resource organization in the execution of CRM practices and rectify where necessary (Chen& Popovich, 2003).

Other than strategies for improving the CRM practices it is important to consider the CRM’s software. One way to improve the software is by making sure the consumers and employees can readily use the CRM software (Payne& Frow, 2005). The best approach to this concept is training the employees to use effectively the software and also making sure the software is not complicated. Another way of improving the software is updating the data and synchronizing the events and time with software (Payne& Frow, 2005).


Every business that aspires to make it in the competitive market requires implementing an effective customer relationship management. The system has benefits that give the company competitive advantage over others. A company with a good customer CRM is open to benefits such as increased customer turnout due to high market penetration. The CRM also affords the company high customer retention and effective and organized operations. Simply implementing the CRM does not ensure its usefulness; therefore, the company needs to monitor frequently and manage its operations.


Campbell, A. J. (2003). Creating customer knowledge competence: managing customer relationship management programs strategically. Industrial marketing management, 32(5), 375-383.

Chen, I. J., & Popovich, K. (2003). Understanding customer relationship management (CRM) People, process, and technology. Business process management journal, 9(5), 672-688.

Knox, S., Payne, A., Ryals, L., Maklan, S., & Peppard, J. (2007). Customer relationship management. Routledge.

Kumar, V., (2010). Customer relationship management., New Jersey.,  John Wiley & Sons, Ltd.

Payne, A., & Frow, P. (2005). A strategic framework for customer relationship management. Journal of Marketing, 69(4), 167-176.

Sherry Roberts is the author of this paper. A senior editor at MeldaResearch.Com in nursing writing services. If you need a similar paper you can place your order from best custom term papers.

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