Customer Relationship Management

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Customer relationship management (CRM) is the new title for relationship marketing.
Explain why this is so and suggest how CRM can be effectively incorporated into a
marketing plan.
Over the past fifteen years Relationship marketing (RM) has been slowly developing into
customer relationship management (CRM) (Gilligan et al 2003). Markets change, even
when profitable, they may mature and saturate, so we cannot be surprised that companies
are changing their strategies in order to satisfy the consumer (Sturdy et al 2001). The
difference between the two can be seen within the two definitions; Relationship marketing
as a company that specialises in relationship marketing helps clients build relationships
with their channel partners and employees, as well as customers (Duncan 2002). Whereas
customer relationship management is as McDonald (2002) defines: A continuous
performance initiative to increase a company knowledge of its customers. It is clear that
from these definitions that the main difference from the two is that RM concentrates on all
of its relationships whether it is with its partners, employees or even its customers. Where
the quote says: "œeven its customers it gives off the idea that the customer is the least
important of the three, in contrast to CRM, whereby it is simply all about the customer.
Solomon et al (2002) suggests that marketers are carefully defining customer segments and
listening to people as never before. Many companies have realised that the key to success
is building lifetime relationships between brands and customers. Marketers who believe in
this philosophy are making an effort to keep in touch with their customers on a regular
basis, and are giving them reasons to maintain a bond with the company over time. Some
companies establish these ties by offering services that are appreciated by their customers.
Many companies donate a small percentage of the purchase price to a charity such as the
Red Cross or the World Wildlife Fund, or for the care of the poor and marginalised in
society.
Brassington et al (2003) concurs with Sturdy et al (2001) and Solomon et al (2002) by
stating that the way in which organisations relate to their customers have evolved
extensively in recent years. Brassington goes on to say that an essential part of customer
relationship understands the customers, keeping them informed and creating a positive
reason for them to continue to do business with you. Contrary to popular beliefs,
committed customers often do enjoy regular contact, preferably mail or e-mail, with their
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