Identify and discuss the different components of the CRM model that an organisation would followin order to build relationships with customers. (1500 words)
Points to consider in answering the set question:
Construction of a database (transactions, customer contacts, descriptive information,response to marketing stimuli)
Analysis, the defining of customer segments and understanding of behaviour in order to understand future profitability
Customer selection, as in which customers to target
Implement relationship marketing and retention strategies
Examples of good practice.
Facts and statistics that underpin the analyses.
Explore how implementing the CRM model, the NHM could create value by embracing aspects of its daily business activities where customers tend to be directly and regularly engaged. Points to consider in answering the set question:
Immediate benefits and latent benefits
Increase customer loyalty/satisfaction/retention delivering higher loyalty, willingness to pay and reduced costs-to-serve
Decrease customer servicing costs/marketing costs
Enhance cross sell and up sell opportunities
Acquire new customers
Effective use of CRM software creates a coherent and cohesive body of information that drives the value proposition for a given client.
Unspecified new products and services may arise form enhanced insight
Realignment of assets to meet customer needs better
Examples of good practice.
Facts and statistics that underpin the analyses.
The report is based on the case study which explains the significance of CRM model. It also explains that how CRM model plays a vital role in natural history museum to build and develop an effective and reciprocal relationship with clients across the world. NHM is one of the largest sciences research centers in the world. NHM is using the CRM model to attract more clients across the world. Further, it explains the elements and implementation process of CRM model. It describes that how CRM is playing an integral role to develop and build a relationship with customers. It also describes the features and weaknesses of the customer relationship management.
CRM model and its components to build relationship with customers
Customer relationship model may be defined as a practice, technology, and strategy which is used by the many companies to manage and evaluate the customer data and interactions throughout the customer lifecycle in order to improve the business relationships with customers and it will also help in customer retention (Boulding, Staelin, Ehret and Johnston, 2013). The CRM system came into in existence with an effective software which helps and supports in organizing, collecting and managing the customer information and data.
There are numerous elements of customer relationship management model which are essential to run the business activities and operations successfully. It also helps to build and develop good relations with customers in the global market. Each and every component is effective and unique and plays a significant role in the process. The customer relationship model helps to generate revenue and profit of the company. The components of CRM model have been discussed below (Management study guide, 2017).
Human resource management: It is a significant component of CRM model which plays a vital role to build and develop a relationship with customers. HRM uses human resources and skills in an effective manner. It is the backbone of the company. It is essential components for the large industries as well as medium industries. HRM uses effective strategies and policies to improve the skills and potential of the workforce. In this way, the firm can easily achieve goals and objectives of the firm.
Lead management: Lead management is an essential component to lead and manage the sales and distribution process of the products and services. It is the process, methodology, practice, and system to create new potential business activities and operations within the organization. It is important for customer relationship management and sales management. It is used by the sales industries, customer executive centers, and marketing firms to maximize the profits of the firm. It also helps to improve the sales of the organization (Sudhakaran and Ramu, 2014).
Customer service: It is a most significant component of the customer relationship model to develop the relationship with customers. The company collects data and purchase information of the customers through CRM model. In this way, customer service is an essential element of the CRM. None of the company can survive its business activities and operations effectively without effective customer service. Therefore, it is an important element of the CRM Model. The firm should maintain loyalty and trust with its existing customers to increase the productivity of the organization (Haislip and Richardson, 2015).
Marketing: It is the mandatory element of the CRM model in order to meet the course of action of the firm. It refers to the promotional activities which are used by a company in order to promote and endorse the products and services. The sales and revenue of the company depend on the marketing. Thus, CRM model assists and supports in the marketing process and procedure by improving and enhancing the effectiveness and efficiency of the policies and strategies. There are various elements of the marketing such as list management, call management, document management, and activity management. Therefore, marketing activities and strategies are used by the companies to increase the profit of the firm (Wang and Feng, 2012).
Workflow automation: Work automation is required by the company to run the business activities and operations smoothly. It helps to reduce the cost and streamlining of the processes as well. Further, work automation does not only reduce the excess expenditures and costs but also prevent and avoid the repetition work by the different people. In this way, it plays a fundamental role to build the relationship with customers around the world (Nguyen and Mutum, 2012).
Business reporting: CRM model helps to manage and control the sales, and marketing activities within the organization. Further, it assists the customer care reports to handle the operations and work management. The business report also helps in forecasting to attain the long-term goals and objectives of the firm. Through the business report, the company can easily evaluate and analyze the risk and challenges of the market (Rai, 2012).
Analytics: Analytics is the process and procedure of studying, evaluating and representing the data and information in order to observe and examine the trends in the global market. It is the significant component of the CRM model to develop the long-term relationship with customers. Analytics uses various types of charts, diagrams, figures and form of histograms in order to meet the mission and vision of the company (Kim, Kumar and Kumar, 2012).
Now it is assumed that various elements are associated with CRM model to build and develop an effective relationship with customers in the market. These components also help to improve the organizational structure of the firm and market as well. There are various benefits of the CRM model in the organization which have been discussed below (Zeynep Ata and Toker, 2012).
Improve customer relations: The primary aim of the CRM model is to improve the relationship with existing and new customers in the universal market. By using of CRM model the company maintains loyalty, honesty, confidence, and integrity among the people to attain the long-term success and growth of the company. Through CRM model, the company is able to provide good quality of products and services to its customers in the global market. It will also help to reduce and eliminate the conflicts, disputes, and agitation of the customers. The company also receives feedback from its loyal customers regarding the various products and services. Through CRM model, the firm provides satisfactory and efficient services to the customers (Goddard, Raab, Ajami and Gargeya, 2012).
Increases customer revenues and profits: By using of CRM model the firm can increase the revenue and profit of the customers in the international market. Various marketing campaigns and programs can be easily conducted by the company with the help of CRM model. Along with this, CRM software helps to increase the sales of the products and services. Through this model, the company is able to reach its target customers in the global market. In this way, CRM plays a vital role to increase the profits and revenue of the company (Stein, Smith and Lancioni, 2013).
Maximize the cross-selling and upselling: CRM model help to increase and maximize the upselling and cross-selling of the firm. Upselling and cross-selling is the practice which is given to the customers for the premium products and services across the world. CRM model also helps to provide complementary products and services to the customers. Through CRM model, the company is able to know the tastes, preferences, and requirements of the customers in the market. In this way, the company promotes and encourages upselling and cross-selling of the products (Ryals, 2013).
Better internal communication: CRM model helps to build and develop better communication and coordination within the organization. It will also help to increase the profitability and revenue of the firm. Through CRM model, optimum utilization of resources can be possible by the firm. It also increases the efficiency and productivity of the workers in order to determine the long-term goals and objectives of the firm (Infoentrepreneurs, 2017).
Optimize marketing: With the help of CRM model, the company is able to understand and measure the needs, behavior, and expectations of the customers. Further, it identifies and evaluates the correct and accurate time to sale the products and services of the company. It will also help to optimize marketing resources effectively and efficiently. It will also help to reach the target market in the world to attract more customers in the world (Khodakarami and Chan, 2014).
Along with this CRM, model increases the level of satisfaction of the customers. It will also help to reduce the cost of the products and it will also increase the team collaboration and co-operation within the organization. It will also help to increase the number of customers in the global market.
The companies use this model to expand and flourish its business activities and operations across the world. In today’s era, customer relationship management is becoming very popular due to increase in the competition among all the business around the world (Boulding, Staelin, Ehret and Johnston, 2013). Through CRM model, the company is delivering the best quality of products and services. In this way, the company is exploring its business activities and operations of the firm. The company can overcome on the competitors in the global market.
It will also improve the financial position of the company. It is the customer-oriented model which protects the rights of the customers in the world. In this way, it provides various benefits to the customers around the world. It will also help to promote the advertisement and promotional strategies to meet the requirements and expectations of the customers. It will also help to maintain good communication among the customers in the market. Through CRM model, the company can understand the worth and values of the customers around the world. It also improves and develops the technologies to introduce the products and services in the market (Boulding, Staelin, Ehret and Johnston, 2013).
Implementation of CRM
The natural history museum is one of the biggest attraction and science research centers around the world. They take care more than 5 million visitors annually. CRM plays a vital role in natural history museum to build and develop the effective relationship with customers and visitors. The company needs to focus on the CRM model to enhance the efficiency and effectiveness of the organization. The stages of CRM model to implement and execute the CRM model which has been discussed below (Mithas, Krishnan, and Fornell, 2013).
Identify the organizational needs a CRM system: The Company needs to improve and evaluate the problems which are essential within the organization. The company should make a vision and mission to implement the customer relationship management. Once the company needs to decide the goals and objectives of the organization to implement and execute the CRM model within the organization. As a result, CRM model is implemented by the company to provide satisfaction to the people (Khodakarami and Chan, 2014).
Find an appropriate and suitable CRM vendor for the organization: The Company needs to explore and expand its business activities and operations globally. Thus, the organization measures and identifies the CRM vendor to implement the CRM model within the organization. The company takes the review and feedback of the clients in the global market (Harrigan, Soutar, Choudhury, and Lowe, 2015).
Develop a budget: It is the important part to implement the CRM model in the organization. The company needs to develop a budget to execute the process. An effective and unique budget should be developed by the firm to gain the long-term profits and revenue in the organization (Peltier, Zahay, and Lehmann, 2013).
Identify which department and employee will handle the process and train them appropriately: It is one of the important steps to execute the CRM model in the organization. Further, the company needs to follow the best practices to implement the CRM model (Khodakarami and Chan, 2014). The company needs to collect the feedback from customers throughout the implementation process. The firm evaluates and measures the employees who are able to handle the CRM process. Further, the firm needs to provide training to the employees to execute the CRM model (Harrigan, Soutar, Choudhury, and Lowe, 2015).
Draw a blueprint on how the people need to progress with the CRM: The company draws a blueprint to determine the success and growth of the company by implementing CRM model. Further, vendors also guide to the employees to understand the attributes and tactics of the effective CRM model. In this way, the company should select and appoint the CRM vendor carefully. CRM vendor plays a vital role to execute the CRM model in the organization (Khosravifar, Bentahar, Gomrokchi and Alam, 2012).
Ensure equal participation from business and IT: It is the important step to implement the CRM in the organization in order to maintain the good relationship with customers in the global market. The company can create a center of excellence to maintain the collaboration and teamwork within the organization. An effective and unique COE plays an integral role to implement the CRM model and to gain the success and growth in the market. Further, information technology plays a vital role to execute the successful CRM model in the organization.
After implementation of CRM model, the natural history museum could create value by embracing aspects of its daily activities where customers tend to be directly and regularly engaged (Duffy et al, 2013).
Implement the CRM system with a trickle-down approach and method: It is the last stage of CRM model. In this stage, the company should execute the CRM system with a trickle down method to attain the long-term mission and vision of the firm (Harrigan, Soutar, Choudhury, and Lowe, 2015).
Now it is assumed that CRM is most significant and efficient approach to maintain and develop the relationship with a client of the natural history museum. It determines the higher level of growth and success of the NHM. It also improves the productivity of the organization. It also helps to estimate the future needs and requirements of the clients. The company can easily utilize the resources through CRM model (Khodakarami and Chan, 2014). It does not only manage the existing clients in NHM but also evaluate and analyze the needs and expectations of the new clients globally. CRM model also called as an “opportunity for business” model.
In addition, it reduces the manual and paperwork which requires lesser employees to manage the activities and operations of the firm. It is the important method of the organization to maximize the profitability and efficiency of the organization as well as employees. Through CRM model, the company is able to build and develop loyal customers in the universal market and it reduces the cost of the products and services. It also decreases the marketing cost to promote the products of the company (Trainor, Andzulis, Rapp, and Agnihotri, 2014).
Let’s talk about example; there are four examples of customer relationship management which include sales, marketing, customer service and support. It will also provide a good chance to introduce new products and services in the market. It provides good opportunities to the customers to buy the various types of products and services in the market. It provides various types of information related to the products quality and quantity.
CRM model provides various benefits to the customers in the global market. The planning process can be conducted easily by using of CRM model within the organization. It also helps to make a strong and effective goodwill in the market. It provides support to maximize the customer's experience and knowledge. In addition, valuable and special customers can be rewarded by the company by using of CRM model. It also helps to save the time of the customers around the world (Peppers and Rogers, 2016).
Weaknesses of CRM model: Although, CRM model has been proved beneficial for the company as well as customers but it also consists some weaknesses which have been discussed below.
Poor communication: It affects the buying behavior of the customers and they do not believe in product quality and quantity. Thus, the company should maintain proper communication with clients to increase the sale of the products. It is the significant concern which can affect the growth and progress of the firm (Malthouse et al, 2013).
Lack of commitment: It is the significant disadvantage which is faced by the company while implementing CRM model. As result, the organization is not able to maintain an effective and unique relationship with clients as well as customers across the world. Further, clients get disappointment and they do not trust on the goodwill and reputation of the firm. It should be managed by the firm to accomplish the long-term goals and objectives (Küpper et al, 2014).
Work leadership: It is one of biggest issues for any of the CRM implementation system and plan. The leaders are not able to maintain proper control on the subordinates to increase the revenue of the firm. Therefore, the company should focus on the leadership styles to implement the CRM model within the organization. An effective and good leadership contributes to success and growth of the firm. Along with this, it should use some effective and unique strategies to manage the workforce in the environment. The organization must resolve and overcome on the various challenges and risks which are existed in the global market (Khodakarami and Chan, 2014).
On the above discussion, it has been concluded that customer relationship management plays an integral and significant role in every organization to build the relationship with customers in the market. It is an important source to generate revenue and profit of the company. Therefore, the companies must maintain an effective and excellent CRM model to provide satisfaction and morale to the customers. It also provides various benefits to the employees.
The entire growth and progress of the organization depend on the unique and effective customer relationship management. It is an important tool to overcome on the competitors globally. By using of CRM model, the firm can analyze and evaluate the plans, strategies, and policies of the competitors around the world. Now a day’s various companies use this model to maximize the profit and minimize the risk and cost of the company.
Boulding, W., Staelin, R., Ehret, M. and Johnston, W.J., 2013, May. A customer relationship management roadmap: What is known, potential pitfalls, and where to go. American Marketing Association.
Duffy, R., Fearne, A., Hornibrook, S., Hutchinson, K. and Reid, A., 2013. Engaging suppliers in CRM: The role of justice in buyer–supplier relationships. International Journal of Information Management, 33(1), pp.20-27.
Goddard, M.G.J., Raab, G., Ajami, R.A. and Gargeya, V.B., 2012. Customer relationship management: A global perspective. Gower Publishing, Ltd.
Haislip, J.Z. and Richardson, V.J., 2015. The Effect of Customer Relationship Management Systems on Firm Performance.
Harrigan, P., Soutar, G., Choudhury, M.M. and Lowe, M., 2015. Modelling CRM in a social media age. Australasian Marketing Journal (AMJ), 23(1), pp.27-37.
Infoentrepreneurs, 2017, Customer relationship management, Assessed on 21st August 2017, https://www.infoentrepreneurs.org/en/guides/customer-relationship-management/
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.
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.
Khosravifar, B., Bentahar, J., Gomrokchi, M. and Alam, R., 2012. CRM: An efficient trust and reputation model for agent computing. Knowledge-Based Systems, 30, pp.1-16.
Kim, D.Y., Kumar, V. and Kumar, U., 2012. Relationship between quality management practices and innovation. Journal of operations management, 30(4), pp.295-315.
Küpper, T., Jung, R., Lehmkuhl, T., Walther, S. and Wieneke, A., 2014, June. Performance Measures for Social CRM: A Literature Review. In Bled eConference (p. 31).
Malthouse, E.C., Haenlein, M., Skiera, B., Wege, E. and Zhang, M., 2013. Managing customer relationships in the social media era: introducing the social CRM house. Journal of Interactive Marketing, 27(4), pp.270-280.
Managementstudyguide, 2017, Features of CRM, Assessed on 21st August 2017, https://managementstudyguide.com/features-of-crm.htm
Mithas, S., Krishnan, M.S. and Fornell, C., 2013, May. Why do customer relationship management applications affect customer satisfaction?. American Marketing Association.
Nguyen, B. and Mutum, D.S., 2012. A review of customer relationship management: successes, advances, pitfalls and futures. Business Process Management Journal, 18(3), pp.400-419.
Peltier, J.W., Zahay, D. and Lehmann, D.R., 2013. Organizational learning and CRM success: a model for linking organizational practices, customer data quality, and performance. Journal of Interactive Marketing, 27(1), pp.1-13.
Peppers, D. and Rogers, M., 2016. Managing Customer Experience and Relationships: A Strategic Framework. John Wiley & Sons.
Rai, A.K., 2012. Customer relationship management: Concepts and cases. PHI Learning Pvt. Ltd.
Ryals, L., 2013, May. Making customer relationship management work: the measurement and profitable management of customer relationships. American Marketing Association.
Stein, A.D., Smith, M.F. and Lancioni, R.A., 2013. The development and diffusion of customer relationship management (CRM) intelligence in business-to-business environments. Industrial Marketing Management, 42(6), pp.855-861.
Sudhakaran, N. and Ramu, N., 2014. A StudyofThe Impact of Customer Relationship Management in TNSC Bank, Chennai. Journal of Finance, 2(1), pp.77-88.
Trainor, K.J., Andzulis, J.M., Rapp, A. and Agnihotri, R., 2014. Social media technology usage and customer relationship performance: A capabilities-based examination of social CRM. Journal of Business Research, 67(6), pp.1201-1208.
Wang, Y. and Feng, H., 2012. Customer relationship management capabilities: Measurement, antecedents and consequences. Management Decision, 50(1), pp.115-129.
Zeynep Ata, U. and Toker, A., 2012. The effect of customer relationship management adoption in business-to-business markets. Journal of Business & Industrial Marketing, 27(6), pp.497-507.
To export a reference to this article please select a referencing stye below:
My Assignment Help. (2021). Components Of CRM Model And Their Importance For Building Customer Relationships Essay.. Retrieved from https://myassignmenthelp.com/free-samples/mod006060-customer-service-management/history-museum.html.
"Components Of CRM Model And Their Importance For Building Customer Relationships Essay.." My Assignment Help, 2021, https://myassignmenthelp.com/free-samples/mod006060-customer-service-management/history-museum.html.
My Assignment Help (2021) Components Of CRM Model And Their Importance For Building Customer Relationships Essay. [Online]. Available from: https://myassignmenthelp.com/free-samples/mod006060-customer-service-management/history-museum.html
[Accessed 25 February 2024].
My Assignment Help. 'Components Of CRM Model And Their Importance For Building Customer Relationships Essay.' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/mod006060-customer-service-management/history-museum.html> accessed 25 February 2024.
My Assignment Help. Components Of CRM Model And Their Importance For Building Customer Relationships Essay. [Internet]. My Assignment Help. 2021 [cited 25 February 2024]. Available from: https://myassignmenthelp.com/free-samples/mod006060-customer-service-management/history-museum.html.