Theory and practise

• The customer has gone through remarkable changes during the last few decades in shopping behaviour, motivation and decision-making which, in many cases, has been determined by new uses of modern technology.  Unprecedented customer sophistication, aided by new communication methods and sales, global competition, low entry barriers, and pressure for margin decrease, have initiated a change in customer/company relationships.
  
  
• It is therefore necessary to turn a company’s attention from acquisition strategies to efforts in keeping and maximising the potential of existing customers - it is 10x more expensive to gain a new customer than it is to retain the old one. Thus, consumer satisfaction and loyalty must be defined by quality of service as well as the customer’s evaluation of it.  Both emanate from detailed knowledge and customer relationship management through a wide range of distribution and communication channels - from brick & mortar branches, linkage to Internet and/or mobile phone services.
  
  
• Complete consumer information is then available for commercial and marketing exploitation at every key touch point: branches, field sales, contact centres, and website presentations.  This allows for data integration and joint use of information from sales, marketing and financial management.  This is very important as up to 80% of customers bring very little profit to a company.  Managing large consumer data and relationship management is possible by focusing on the use of information and telecommunication technologies.
  
  
• CRM defined
• is a concept whereby an organisation can take a comprehensive view of customer profitability to the company                        
• comprises a set of processes and systems that enables a business strategy to build long-term, profitable relationships with specific customers.  CRM’s key objective is to enhance consumer value through better understanding of individual needs and preferences
• describes a fundamental  business strategy that will consistently deliver services and products throughout the entire customer relationship
• is marketing seen through relationships, networking and interaction.
• Thanks to CRM, a company can work with customer’s long-term profitability (lifetime value-LTV), and actively enforce it through marketing.  It can also provide a near personal approach to each customer (1-1 marketing), individual offers (consumerism) or make coherent offers to small consumer groups (mass consumerism).  Marketing processes can, to some extent, become automated due to “campaign management“ software or “business intelligence“ tools that allow for deep analyses of large data amounts (data mining).
• Implementing a total CRM should result in long-term satisfaction of key consumer target groups, increased profitability, and a long-term increase of company value.
• To successfully implement and run a CRM program is not only by monitoring consumer behaviour, understanding his/her needs, managing total distribution and communication channels, but, more importantly, to apply an holistic approach to the company’s internal processes, infrastructure and management systems. CRM will effect the way a company manages its organisation in the areas of marketing, business processes, IT & IS, performance, financial processes, etc. It is critically important to create the decision by an organisation to implement CRM solutions as an on-going process within the context of its long-term corporate strategy. The most important key success factor is the change that occurs in the minds of management and its employees. Technology and IT solutions do not provide on their own competitive advantage or customer satisfaction and loyalty.
• More information on CRM theory and practise can be found here (Resources/Zdroje)