Customer Relationship Management - Essay Example

?Running head: Relationship Management Insert         Insert Grade Insert 7 March Relationship Management Introduction Customer relationship management (CRM) is a strategy used for managing a company’s relationship with its customers. As a result, effective customer service is necessary in this case. Attracting, nurturing, and retaining customers are the ultimate goal of customer relationship management. Therefore, an effective customer relationship management strategy will improve on the company’s profits, as well as on the quality and efficiency of services. According to Sheth (2001, p.5), CRM is a tool that enables a company to manage effectively, its customer relationships through understanding and responding quickly to their needs; as a result, close relationships are formed, which result to loyal customers. This essay will discuss how customer relationship can be managed from an organization’s perspective. How can a company use new technologies and IDIC task to build a Learning Relationship not possible before e-commerce? According to Peppers & Rodgers (2004, p.211), learning relations should mature for positive results to be achieved; the use of IDIC enables customization of customer relationship. According to Peppers & Rodgers (2004, p.68), IDIC involves several tasks, which can assist an organization to build learning relationship. Identifying customers is very important for a company, since it is easier to know the preferences of that specific customer. Differentiating customers involves identify customers of different levels, and their different needs; indeed, interacting with customers is vital. Therefore, organizations must improve their interaction, which enables the company to identify the needs of customers. Customizing customer treatment involves engaging the customer in a learning relationship, which includes adjusting the company’s behavior to meet the needs of a customer (Peppers & Rodgers, 2004, p.69). In addition, use of ICTs enables an organization to research on effective CRM tools, which can foster learning relationships, and as a result, attracting and retaining customers. Imperial limited current organization chart An organizational chart clearly shows the structure of an organization. As a result, these charts aid in organizing the place of work, by providing managers with departmental information. Therefore, a well-organized structure will definitely boost the customer relationship management through prioritizing on customer needs and fostering healthy interaction with such customers. Below is the Imperial Limited’s organizational chart; this organization interacts with customers daily, as it provides decoration services for weddings and other events. Figure 1: imperial decoration company, organizational chart How should that chart be changed in order to facilitate customer management and to make sure people are evaluated, measured, and compensated for building the value of the customer base? Currently, the company comprises of the chief executive officer, a vice president, and managers in all the respective departments. Generally, managers’ responsibility involves co-coordinating activities in their respective departments and reporting to the vice president, who reports to the chief executive officer. However, in order for the organization to foster customer value through managing relationships, it must be ready to identify, differentiate, and interact with customers. According to Day (N.d, p.2), organization structures include coordinating mechanisms; however, they should be more customer-focused. Imperial Decoration Company is a service rendering company, where the human resources department deals with employees’ welfare, which includes training, salaries, and annual leaves among others. The marketing department markets the company through advertising, good customer services, and promotion. The accounts department handles all the returns of the company. Competition is increasing and the company needs to continue attracting and retaining customers in order to maintain a competitive advantage. As a result, effective communication is a requirement between departments. The company has separated the sales and marketing department; however, it is important to integrate these two functions in order to ease co-ordination of marketing and sales activities. Day (N.d, p.4) adds that, the main aim should be to improve all the customer-contact activities. Currently, managers are able to monitor their employees from a divisional approach, which fosters fast decision-making. In addition, the CEO should be in a position to communicate directly to the subordinates from time to time and reward them for good customer relationship management. Such a structure fosters free flow of information as opposed to a hierarchical structure, which creates communication barrier by emphasizing on control and command. Changes on the Imperial organization chart should be as follows: How would the culture have to change for the organization to manage the relationship with and value of one customer at a time? According to Renart & Cabre (2005, p.5), customer relationship management must be aligned with the company’s culture and values. Culture is vital to an organization; however, this culture should be flexible in order to meet the changing needs and preferences of customers. Therefore, organizational culture must be well managed. Therefore, culture can be related to a behavior pattern of an organization. In the case of Imperial Decoration Company, they have a tradition of handling many customers at once. However, according to Jelinkova, Lostakova & Munzarova (2006, p.60), a company needs to interact with customers individually in order to build a one-on-one relationship. Customer relationships are determined by the manner in which a company handles its customers through interactions, and as a result, creating value of the customers. Therefore, the Imperial Decoration Company management should assign different clients to different personnel or departments. As a result, the personnel will be in a position to provide maximum attention to the customers, and in the process, developing strong relations. In addition, planning is vital, as the management is ware of the number of expected clients, and as a result, planning on how to create customer value for each of these customers. For healthy customer relationships to be achieved, trust must be present. These two factors work in tandem. Customer relationships continue to improve step-by-step as the customer interacts with the enterprise. In addition, this company will have to differentiate customers and deal with one customer at a time, through a variety of qualified personnel. According to Kincaid (2003, p.366), by selling goods and services at higher prices than their original cost, the firm is able to make high profits. Although employing more people to cater for the needs of customers is an added cost, this leads to a competitive advantage mainly because a company is in a position to provide better services compared to competitors. Who should “own” the customer relationship? Interestingly, it can be argued that sales department owns customer relationship in a company; this is because of the frequent interaction between the customers and the sales representatives, which involves bargaining and continuous communication. However owning customer relationship does not mean a customer can be owned. Therefore, the company as a whole owns customer relationship. It is through the healthy interaction between the customer and a company that creates customer relationship. Moreover, it is through customer relationship that an organization meets it goals, such as, customer service and customer satisfaction. Needless to say, loyalty is determined by positive experiences, while personalization and customization are keys to owning customers relationship. Conclusion Customer relationship management is a vital strategy for every company. The ability to attract, nurture, and retain customers leaves a company at a competitive advantage. Therefore, for customer relationship to prosper, IDIC tasks are important they include identifying customers, differentiating customers, interacting one-on-one with customers, and customizing customers’ treatment. Needless to say, customer loyalty is influenced by the customer’s experiences, and as a matter of fact; organizations should be flexible to adjust to the needs of customers. Imperial Decoration Company needs to adjust its organizational structure in order to improve on customer value, achieve customer loyalty, improve customer relations, and own customer relationship as well. References Day, G. (N.D). Aligning the organization with the market. The Wharton School. Retrieved from http://knowledge-stage.wharton.upenn.edu/papers/1315.pdf. Jelinkova, M., Lostakova, H., & Munzarova, S. (2006). Process of complex CRM. VADYBA / Management. Retrieved from http://www.leidykla.vu.lt/fileadmin/Vadyba/10/Martina_Jelinkova__Hana_Lostakova__Simona_Munzarova.pdf Kincaid, J. (2003). Customer relationship management: getting it right! Prentice Hall Professional Publisher. Peppers, D., & Rodgers, M. (2004). Managing Customer Relationships: Customer Relationships: Basic Building Blocks of IDIC and Trust. John Wiley & Sons. Publishers. Retrieved from http://www.1to1media.com/DocumentDownload.aspx?Doc_ID=28227 Peppers, D., & Rodgers, M. (2004). Managing customer relationships: a strategic framework. Wiley and Sons Publishers. Renart, L. & Cabre, C. (2005). How to improve a CRM strategy, university of Navarra. Retrieved from http://www.iese.edu/research/pdfs/DI-0690-E.pdf. Sheth, J. (2001). Customer relationship management: emerging concepts, tools, and applications. New Delhi: Tata- McGraw-Hill Education Publisher. Read More