This is an extended piece of writing focused on answering a question or developing an argument based on an understanding or reconciling of the theory and empirical facts or evidence.
Customer Relationship Management (CRM)
Customer relationship can be defined as the combination of methods, people, and technology companies' use identifies their potential prospects’ needs. In the statement of Khodakarami and Chan (2014), it is more of an integrated technique used for organising relationships by emphasising explicitly on the concept of customer relationship development and retention considerably. The term customer relationship has relatively evolved with the advancements in information technology and business processes transformation to handle customer-centric queries. Organisations that productively apply effective customer relationship management would definitely obtain the rewards with greater figures of customer loyalties and long-run profitability.
However Lemon and Verhoef (2016) argued that effective application is indefinable to numerous organisations, frequently since they fail to recognize the fact that CRM requires cross-functional, company-wide and customer-centric business methods. The present essay aims to select the topic Understanding Relationships and the evaluation would be made centred on the subject matter. The importance of understanding customer relationship of companies would be analysed and its methods of application as well. Based on the research, facts and arguments related to the chosen topic an authentic conclusion would be derived.
As per records of recent researches connecting to customers’ handling, the outcome claims that consumers never agitate as a result of sudden fluctuations in the price ranges, however, they whip after getting ineffective and negative customer care service lines. It is necessary for organisations to ensure that their clients receive adequate customer service and satisfaction they are seeking to lower their probabilities of churning. Businesses readily require tracking and gauge the contentment ration of its customers and place in situate latest measures for growing customer service excellence. Hence, internal resources shall be eager to go beyond customers’ expectations and satisfy them with all of its available opportunities to create a better impact on customers’ service experiences.
Understanding better customer relationships often serve as a differentiation point. As per Lemon and Verhoef (2016), in the recent marketplace where the degree of competition is at its peak, the relationship businesses having with their most potent and loyal clients would enact as its key differentiator to compete against rivals. Businesses that prosper in these uncertain surroundings are the ones making its customer relationship as its chief business policy. In this context, it may also be noted that a properly designed and efficiently structured customer relationship management strategy significantly contribute towards gaining the competitive advantage in the industry for the firm. For example, the Coffee Makers operating in the area of its competitors as well offering a substitute product, customers prefer opting the service of the product of that brand that manages to offer enormous customer experience and includes vicinity that guarantee that contentment is high. Customer and company relationships shall work as a full circle since this positive relationship would not only support business to track its current customer’s status but also encourage in bringing new ones.
According to Nyadzayo and Khajehzadeh (2016), effective relationship with customers definitely indicates its loyalty functions and repurchases. When customers are satisfied with the offered service by a company or brand, they tend to enhance their frequency of visits and purchase on regular basis. This also helps brands to gain new customers through word of mouth referrals. Customers who already experienced the services of any particular brands and are satisfied with it definitely recommend other customers to prevail the service or purchase product from the particular brand. Hence, understanding customers’ relationships definitely help every organization to address their exact needs and offer the service by identifying their latent demands. This definitely supports organizations to leave a better customers service experience and enhance their engagement with their own brands and set it amongst their priority.
The Significance of Understanding Customer Relationships
Kumar and Reinartz (2018) claimed that it is more affordable and cost-effective to retain existing customers than to create a new base. This statistics is definitely holding more control in the current rapidly changing dynamics of the market. A brand needs to certainly incur eight times more costly to get hold of fresh customers than upholding the present ones. Once organisations comprehend this particular statistic, then it would be eager to make sure that the specific organisation is offering pleasing customer service lines to retain the potential clients of competitors. Customer relationship management holds immense importance in both retaining the existing customers as well as obtaining new customers as the second one is relatively an expensive action which may be smoothly and cost effectively executed through a planned and strategic CRM.
Moreover, the CRM (Customer Relationship Management) team would be required to invest a lump sum amount in seeking customers’ attention and also converting to potential leads to persuade with the purchasing decisions. It would be fundamental to make certain that a brand to develop this association with customers by understanding their desires and making it count for the longer durations. Business will definitely enable to decrease its acquisition expenditure if it becomes successful in keeping sound customer relationships. In this context, it may be worthy to note that the customer acquisition expenditure as incurred by the business houses primarily vary almost in inverse proportion to the customer satisfaction index. A business with satisfied customer base generally tends to incur lesser amount of acquisition expenditure than that of the business having customer dissatisfactions issues.
It has been assessed that discontented and displeased customers would circulate the message of their horrible experience in a brand. According to Hill and Alexander (2017), the maximum per cent of customers have the tendency of typically approaching other people about their both positive and negative experiences. In terms of the negative spread of message, it can definitely impact negatively on the business. It can be stated that customer-business affiliation in a straight line connects to repetitive purchases and revenue. Unless a brand does not become careful with its customers’ relationship status, it would never enable to recognize the impact it subjects on the business operations. Continuous tracking of customers desires, demands and their review against given service are the efforts organizations are making in order to understand the needs and demands of its potential customer and the future efforts it can make to retain them for a longer duration.
A satisfied customer would lead to contribute or help brands to generate two times more revenue as contrasted to an unhappy customer. Contentment with service offering certainly tends to develop a strong relationship that would lead to generate additional profits from a single satisfied customer for a business. Organisations those are successful in identifying the long time value of prospective customers who have the potential to make a visit again as it leads to enhance companies’ returns. The lifespan value of a potential and the loyal customer can serve a brand with several benefits that arise from developing important relationships and strong customer satisfaction rate with its service excellence.
Conclusion
Based on the discussion and analysis performed in the preceding sections of the essay, the researcher has arrived at a concluding statement, which underscores the fact that it is the most significant task for every organisation to understand its customer relationships. A proper assessment of its CSR actions can help every business to recognise the areas that create values on customers or leave a negative impression on them. Based on which suitable actions can be taken by the companies to improve its service qualities to enhance customers’ satisfaction rates and thereby retention. Happy and satisfied customers for a brand turn up to be its strength to fight market fluctuations and uncertainties. Therefore, it may be concluded that the management of the businesses should make genuine attempt to devise a suitable CRM strategy in order to provide value based services to the customers so that the customer satisfaction reaches its peak in line with the corporate goals and objectives in the long run. The initiative will surely contribute to the success of the business in terms of sustainability in the market.
References:
Hill, N. and Alexander, J., (2017) The handbook of customer satisfaction and loyalty measurement. Routledge.
Khodakarami, F. and Chan, Y.E., (2014) Exploring the role of customer relationship management (CRM) systems in customer knowledge creation. Information & Management, 51(1), pp.27-42.
Kumar, V. and Reinartz, W., (2018) Customer relationship management: Concept, strategy, and tools. Springer.
Lemon, K.N. and Verhoef, P.C., (2016) Understanding customer experience throughout the customer journey. Journal of Marketing, 80(6), pp.69-96.
Nyadzayo, M.W. and Khajehzadeh, S., (2016) The antecedents of customer loyalty: A moderated mediation model of customer relationship management quality and brand image. Journal of Retailing and Consumer Services, 30, pp.262-270.
