Successful Customer Relationship Management Strategy Implementation

Organizations can achieve a competitive advantage through several complementary strategies among which stand cost leadership, differentiation and focalization. However, in the current economic environment characterized by the competitiveness in markets the added value that companies are able to create for their customers have focused their attention on developing personalized relationships with them, changing organizations marketing approaches from the transactional to a relational one as a strategy to achieve competitive advantage.

CRM Background

The mentioned above is especially relevant in today’s environment where customers have intensive contact with organizations setting them in a position to establish long-term relationships with customers. Therefore organization must implement initiatives that support customer relationship management (CRM) supported by information communication technologies (ICT's) as a marketing relational strategy.

CRM is an intangible, inimitable, valuable and irreplaceable resource and organizations can benefit if they take relationship marketing as a philosophy of action. This resources approach establishes that competitive advantages are derived from the heterogeneous nature of organizations that have unique and difficult resources to imitate. Relationship marketing within the business-to-business (B2B) field is in essence based on the exploitation of value by developing long-term relationships with key players in organizations through relationship marketing tools that help them to increase the retention of customers. 

Organizations must obtain applicable knowledge in customer management, because due to advances in information and communication companies regardless of their size have access to almost perfect information of processes and activities of suppliers resulting in the B2B transparency and therefore the costs of switching supplier decreases for organizations.

CRM within B2B specializes and divides the functions of the organization and a reintegration to directly give the buyer a comprehensive service tailored to their needs. CRM involves the adoption of a new marketing concept within the relational approach known as network marketing, which requires the development of inter-organizational relationships that enable the coordination of activities among multiple parties for mutual benefit and exchange of resources.

CRM Theories

CRM is a strategy that encompasses process that comprises the acquisition, retention and association of certain customers in order to create superior value for company and the customer. In their findings the most highlighted aspect is that CRM requires the integration of the different functions of the organization in order to create value for both parties in the relationship. The highlight of this theory is that CRM requires the integration of the different functions of the organization in order to create value for both parties in the relationship.

CRM is a set of strategies that tend to seek, collect, store, validate and share the appropriate information through the organization, in order to be used by all levels of the organization to create unique and personalized experiences for their customers. The highlight of this theory is the key of role of information and knowledge of the customers, which must be managed and dispersed through the organization to customize the service.

CRM is not only a software package but also as a comprehensive strategic approach that manages the evolution of customer relationships that require organizations to continuously adapt in response to the changing market needs. The highlight of this theory is that CRM is a comprehensive strategic approach to respond to changing customer’s needs.

Key arguments

Once that the definition of these three theories are analyzed one can highlight a number of traits or characteristics that underlie the basis for conceptualizing the term of CRM:

• CRM is a strategy or business model focused on the customer, and must integrate the entire organization, aligning all the different functions that exist within a company with the common goal (the focus on customers). 

• The main objective is the generating value for customers with the customization and personalization of offers based in understanding their preferences and needs.

• ICT's are tools that enable the strategy and CRM is just not about ICT's but a much broader concept, since it constitutes a business strategy that will generate long-term benefits for both parties involved in the relationship. 

• CRM strategy involves the redesign of the organization to focus it to the customers.

Based on the characteristics given above the following CRM definition is proposed:

"CRM is a business strategy that aims the establishment and development of value relationships with customers based on knowing them. This involves the redesign of processes and the customization of offerings to best meet the needs of customers generating relations of long term loyal and mutually beneficial by utilizing ICT's as support."

Implications

Not all are good results in CRM initiatives one of the most frequent failures from the management perspective is to give excessive prominence to the technological aspect. On the contrary CRM goals can be achieved without having large investments of money in technology and each organization must analyze their needs and the levels of sophistication that will provide better value for their business.

Common mistakes in the implementation of CRM strategies:

• Deploying the strategy of CRM prior to designing a strategy of relationship with customers.

• Organizations not taking into account the changes that the organization needs to make, and thinking that the more technology the better.

• Thinking that customers always want to maintain the relationship with the organization.

• The integration of resources such as people, process, technology and culture throughout the organization.

Summary

There are a number of factors that incidence in a successful CRM strategy highlighting technological, organizational factors, the management of knowledge and finally customer orientation. However, converting CRM into a strategy can be linked to multiple perspectives such as philosophical, operational, etc., but regardless of the perspective the intention is to generate value in the relationship; by assuming the need to know the heterogeneous value of their customers in order to satisfy them.