Customer Relationship Marketing Definition
Ever wondered what is it that makes a business exist and thrive? What is it that makes people love one brand and hate another? Well, if you know the mechanism of a business, you probably know that the most successful businesses have the customers at their heart. Yes, the most successful businesses are the ones that are customer-centric, and customer relationship marketing (CRM) is one of the techniques used for the same. Now you must be wondering, what exactly does CRM mean.
A straightforward answer to “what is customer relationship management in marketing” is that it is a technique based on client relationships and customer loyalty. Customer retention relationship marketing is all about companies using customer data and feedback to build long-term relationships with customers and develop laser-focused brand awareness. This is done using a CRM tool that creates a simple user interface for a collection of data that enables businesses to recognize and communicate with customers in a scalable way. Service marketing and customer relationship management consist of numerous commercial and client-specific strategies that are incorporated through employee training, marketing planning, relationship building, and advertising.
There exist three levels of customer relationship marketing:
Here, the customer is just introduced or in a little relationship with a business. This business might send out catalogues with discount offers to entice such first-time customers. As soon as a customer buys a product from the respective business, the firm goes above and beyond to build that relationship.
This is the level where personalization takes place. Customer centricity is taken to a whole new level in this stage. Certain perks, such as discount coupons are tailored according to the interests or the previous purchases of a customer.
At this stage, the firm starts building structural connections to the customer. For instance, a business may ask its customers to download its app hence leading to customer life cycle relationship marketing that helps the business grow by leaps and bounds in the long run.
What Are The Objectives Of CRM?
As a matter of fact, marketing and customer relationship management go hand in hand. A business can make the most out of its marketing strategies, provided they are based upon an efficacious CRM mechanism that accomplishes a number of objectives. Those objectives can be stated as follows:
- Converting prospects into advocates and retaining them for long
- Building a huge, loyal customer base
- Minimizing defections
- Using up-selling and cross-selling opportunities without annoying customers
These objectives are fulfilled through clever and fruitful customer relationship marketing strategies, including direct marketing, web marketing, e-mail marketing etc. have been matured during the recent past. These strategies help:
- boosting up a business’s performance
- cut cost on promotions due to low asset values
- provide a critical observation of organizational investments
- make marketing campaigns more effective
These are some of the benefits that a business can enjoy once it has effective CRM in place. With that said, there arises a question.
What Is The Need For Customer Retention And Relationship Management?
Now that the objective and definition of customer relationship marketing (CRM) is clear let us understand its significance. For every business, there is a need to develop such a connection with its customers, that is strong and profitable. And that’s what customer relationship management and relationship marketing help achieve. It eventually helps businesses gain customer loyalty and customer retention which, in turn help in increasing profits for a business.
A business may utilize any of the available three types of marketing customer relationship management:
- Operational CRM that streamlines the business process that includes Sales automation, Marketing automation, and Service automation.
- Analytical CRMthat enables the top management, marketing, sales and support personnel to determine the better ways to serve customers.
- Strategic CRMthat readily helps an organization to cater customers’ information among various business units like the sales team, marketing team, technical and support team.
To understand the significance of relationship marketing and customer loyalty lets take up the CRM report of TESCO, a British multinational groceries and general merchandise retailer. Though there are a lot of other customer relationship management examples this one will help you get a better idea of how CRM can affect a business’s growth. Here, we will see how relationship marketing helped in bringing quality customer service and eventually helped TESCO, that started as a single grocery store, to transform into a multinational general merchandise retailer.
CRM Report Of Tesco - Essentials
The issues covered under the report were a query of customers’ roles in relationship and retention marketing in acquisition and retention of customers. The report deals with customer relationship management in TESCO, which had considerably had a high-quality relationship with their customers.
1.1 Aim Of The Research Work:
The intention of this theory is to study the working of relationship marketing and customer relationship management in Tesco. Marketing has stimulated from customer gaining to customer preservation to customer assortment.
1.2 Objectives Of The Research Work:
The main objective of this study is to examine the relationship between their customers while selling the product. In an attempt to complete these objectives, the investigator desires to locate some parameters. The main objectives of this study comprise:
- To evaluate and critically assess the excellence of customer relationship management system deployedat Tesco.
- To seriously examine contact of relationship marketing on customer retention at Tesco
- To significantly examine the role of customer relationship marketing in preservation and gaining of customers.
H0: approval, trust, promise, emotional accessory and obsession are important in a customer’s loyalty towards Tesco and Tesco Club card.
H1: adult females are the demographic cluster most probable to be loyal to Tesco and Tesco Club card
2. Literature Review:
The use of this chapter is to evaluate the accessible literature relating to loyalty and customer loyalty in the circumstance of loyalty programs. The literature analysis will assess loyalty in relation to Tesco. These chapters deal with the devotion in retail, customer’s responsibility in relationship marketing and the chapter outline.
2.2 Loyalty In Retail:
This research is to establish the thought that customers desire a connection with the retailer and wishes to be recompensed for their loyalty. The significance of retention and relationship marketing management of customer relationships has become even more vital than ever before. Nowadays, advertising has stimulated away from short term, rapid scale situation and advertising today are added about “partner” and relationship structure. (Akroush and ELSamen, 2012).
2.3 Customer Roles In Relationship and Retention Marketing:
The importance is on exploiting the competence and amount of individual sale slightly than raising a relationship with the purchaser. Alternatively, relationship marketing is a trade policy that seeks to find long term connection with its consumers rather than focusing on a single operation. The main focus of this theory is mainly on the serious appraisal of quality customer relationship and the issue that influences customer retention (Ahmed, 2010).
2.4 Chapter Summary:
In this research, the researcher talks about the customer roles in relationship marketing in acquisition and retention. This research will offer us the plan about the customer’s position and loyalty near the retail segment using the case of customer relationship management marketing and retention in TESCO.
- Research Methodology
3.1 Research Design:
There are essentially two policies to investigate: quantitative and qualitative. This study exploits a qualitative method for exploration since its rich and descriptive nature. Qualitative data consists of terms and explanation and not essentially information. As with all information, analysis and understanding are requisite to transport order and understanding (Dorrington and Goodwin, 2002).
3.2 Research Philosophy:
Here, the investigator uses positivism part, and the report pays attention on the performance and assessment. This report explains the roles of consumers in relationship marketing of acquisition and retention. The organization must aim their strategy, approach toward loyalty of their customer in the organization (Goldsmith, 2010).
3.3 Data Collection Method:
The Researcher directs the questionnaire separately to all the respondents of the description. All questionnaires query to the respondents were recognized and attained the ideal reply by continuing a register of the survey, which was driven, and recognized (Lancaster and Luck, 2010).
3.4 Sample Size:
In the collection of quantitative data, the report takes into account the significance of both probability and non-probability sampling. The research measures use probability sampling where the collection of a participant is “self-governing of human decision’ create a recognized and non-zero chance of anyone exacting case in the populace of cases creature incorporated in the sample (Maggon and Chaudhry, 2015).
3.5 Research Ethics:
Ethics unease moral principles and how people invented to maintain themselves in social relations. The valued viewpoint and self-assurance of the respondents were valued in the study. The primary data self-possessed was not customized and was conducted with the privacy obligatory (Payne and Frow, 2004).
The conversation relating to the loyalty program and their ability to generate sustainable customer loyalty is in the division due to a company’s motivation following the introduction of a loyalty agenda.
So, that was a complete report of how a customer relationship management system is used in TESCO and how it has benefited the organization in the long run. Not just TESCO, a lot of other businesses worldwide are now leveraging the power of strong customer relationships through online customer relationship management. CRM software enables a majority of customer-centric businesses to manage a strong relationship with their customers. This software can further be used to manage business contacts, employees, clients, contract wins, sales leads, and eventually, fuel customer loyalty programs to add strategic value to relationship marketing.
Summing it all up in one line, the businesses, that have ignored the power of customer relationship development and retention marketing for long and still continue to do that, are simply losing out on a huge list of profits. Customer relationship management online is the trend to follow, if a business really wishes to be on its customers’ favourite list!
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- Ahmed, A. (2010). Customer Relationship Management through Communication Strategy.International Journal of Customer Relationship Marketing and Management, 1(3), pp.15-26.
- Akroush, M. and ELSamen, A. (2012). An empirical investigation of the mediating role of relationship marketing skills on the relationship between customer satisfaction and customer loyalty.International Journal of Internet Marketing and Advertising, 7(1), p.1.
- Dorrington, P. and Goodwin, J. (2002). The role of lifetime value in customer relationship management.J Direct Data Digit Mark Pract, 4(1), pp.7-18.
- Goldsmith, R. (2010). The Goals of Customer Relationship Management.International Journal of Customer Relationship Marketing and Management, 1(1), pp.16-27.
- Lancaster, G. and Luck, D. (2010). Applications of Customer Relationship Marketing in the UK Hospitality Industry. International Journal of Customer Relationship Marketing and Management, 1(4), pp.1-21.
- Maggon, M. and Chaudhry, H. (2015). Revisiting Relationship Marketing and Customer Relationship Management in Leading Tourism and Hospitality Journals: Research Trends From 2001 to 2013.Journal of Relationship Marketing, 14(1), pp.53-77.
- Payne, A. and Frow, P. (2004). The role of multichannel integration in customer relationship management. Industrial Marketing Management, 33(6), pp.527-538.
- Shi, G., Shi, Y., Chan, A., Liu, M. and Fam, K. (2011). The role of renqing in mediating customer relationship investment and relationship commitment in China.Industrial Marketing Management, 40(4), pp.496-502.