Important answers: Customer Relationship Management - Introduction

1. Define CRM?

Parvatiyar and sheth (2001) defined CRM is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer.

2. What is meant by relationship management?

Relationship management is the technique of providing information about the customers and collecting information about prospects of customers, that allows us to help them evaluate and purchase products that deliver the best possible value to them.

3. Who is called as a customer?

A customer (also known as a client, buyer, or purchaser) is the recipient of a  good, service, product, or idea, obtained from a  seller, vendor, or  supplier for a monetary or other valuable consideration.

4. Difference between consumer and customer?

A consumer refers to individuals who buy for themselves or their family (hence the term 'consumerism' in economics and politics), whereas a customer can also mean the retailer or person who buys from the manufacturer, etc

5. State the significance of CRM?

A CRM system consists of acquired or to be acquired customers. This helps in reduced searching and correlating customers and to foresee customer needs effectively and increase business.CRM contains each and every bit of details of a customer, hence it is very easy for track a customer accordingly. Customers are grouped according to different aspects according to the type of business they do or according to physical location

A CRM system is not only used to deal with the existing customers but is also useful in acquiring new customers. The process first starts with identifying a customer and maintaining all the corresponding details into the CRM system which is also called an ‗Opportunity of Business‘

All  the  details  in  CRM  system  is  kept  centralized  which  is  available  anytime  on fingertips. This reduces the process time and increases productivity. 

Efficiently dealing with all the customers and providing them what they actually need increases the customer satisfaction. This increases the chance of getting more business which ultimately  enhances turnover and profit.      

If the customer is satisfied they will always be loyal to you and will remain in business forever resulting in increasing customer base and ultimately enhancing net growth of business.

6. What is the meant by transactional approach?    

Transactional approach is on individual transaction and does not concern continuous relationship  with  customers.  The  framework  of  transactional  marketing  does  not  contain  a strategic long-term perspective. It centers on tentative adjustment process as regards performing marketing functions. Customers are viewed as outsiders to the business. 

Under transactional approach customer‘s expectations, satisfaction, multiple influences on their decision –making process etc., are not given due significance. Very little attention is paid to customer services and customer commitments. The thrust of transactional marketing is on gaining more and more new customers rather than retaining existing customers.

7. What is meant by relationship approach?

Relationship marketing approach has gradually taken the shape of Customer Relationship Management. Relationship marketing has a narrow focus on the customers and only on the marketing functions of the organization concerned. On the other hand, Customer Relationship Management focuses more widely on customers and on the entire functions connected with value creation and delivery chain of the organization concerned.

8. How organizations lose their customers? Organization lose their customers due to

•             Price   related   reasons

•             Product   related   reasons

•             Service-relatedreasons

•             Benefit–relatedreasons

•             Competitor&   reasons

•             Personal   reasons

9. What do you mean by direct marketing?

Direct marketing is just what it sounds like - directly reaching a market (customers and potential customers) on a personal (phone calls, private mailings) basis, or mass-media basis (infomercials, magazine ads, etc.).

Direct marketing is often distinguished by aggressive tactics that attempt to reach new customers usually by means of unsolicited direct communications. But it can also reach out to existing or past customers. A key factor in direct marketing is a "call to action." That is, direct marketing campaigns should offer an incentive or enticing message to get consumers to respond (act).

10. What are the benefits of CRM?

A Customer Relationship Management system may be chosen because it is thought to provide the following advantages:

^§    Quality and efficiency

^§    Decrease in overall costs

^§    Increase Profitability

11.            Write short note on Customer Relations.

It can be defined as the process by which companies promote customer satisfaction and , moreover, loyalty. At its most basic, it involves managing communications with customers, particularly customer questions and complaints, and resolving disputes amicably. The ultimate goal of most customer relations program is to build long term relationships –those in which the customer keeps buying the product or service and recommending it to others –with customers.

12. What are the traditional marketing techniques used in CRM?

Traditional marketing techniques that have been used effectively by them, such as:

•Direct Marketing

•Telemarketing

•Web Personalization

•E-mail Marketing

•E-commerce

•Sales force Automation

13. What is meant by relationship marketing?

Relationship marketing refers to the development, growth, and maintenance of long-

term, cost-effective exchange relationships with individual customers, suppliers, employees, and other partners for mutual benefits. It broaches the scope of external marketing relationships to include suppliers, customers, and referral sources.

14.            State the characteristics of CRM?

1. First it will track and report every interaction with a customer, describing the customer's purchase, interest or demand. It will report also the changing needs of the customer and the way your business reacts effectively to them.

2. Furthermore, the CRM will be a universal instrument for collecting data about the service requests, order entry, satisfaction and billing.

3. Third, the CRM will be able to measure the performance of the business on the basis of internal benchmarks.

4. Last the CRM will facilitate the working processes by emphasizing on the positive and exclude the negative practices in your customer relations center.

15.            What is customer diversity?

Increasingly customer prefers choices, tailored to their needs and is personalized in nature. Many of the mass marketing practices fail with customers who are diverse in their lifestyles, age, income and ethnicity. The diversity will greatly increase the diversity in demand and expectations.

16.            State the areas of CRM focused?

•             Generation   and   servicing   more   loyal   custo

•             Expansion   of   customer   base

•             Reduction   of   advertising   costs

•             Increase   in   profitable   customers

•             Ease   in   introduction   of   new   products

•             Personal   InformationProcessing,   Gathering   and

•             Self-Service.

17.            What is called as customer relations?

Customer relations is the process by which companies promote customer satisfaction and, moreover, loyalty. At its most basic, it involves managing communications with customers, particularly customer questions and complaints, and resolving disputes amicably. The ultimate goal of most customer relations programs is to build long-term relationships—those in which the customer keeps buying the product or service and recommending it to others— with customers.

18.  What are the importances of CRM? Importances of CRM are:

i.           Provides Updated Information

ii.           Anticipates Problems.

iii.           Prompt Follow-Up.

iv.          Problem Resolving Mechanism

v.           Assesses Customer Interests

19.            Write short note on Supplier relations.

All Successful Companies build strong relationships with their suppliers. Supplier relationships are different from simple purchasing transactions in several ways. First, there can be a sense of commitment to the supplier .For example, if a vendor sells light bulbs, he can feel confident that the buyer will come to him next time the company he represents requires a new shipment of light bulbs. They also contact them in order to discuss their future need and to determine how best to satisfy those needs by working together.

20.What are the various limitations of CRM? I. Require Top-Management Support.

II.           Not Functionally Organized.

III.    Customer Dissatisfaction

IV.    Not Customer Centric.