Difference between Traditional Marketing and Customer Relationship Management - Essay Example

?CRM has its focus on the ability to aggregate knowledge about s who have a significant in affecting the profitability of a company, and managing these customers for the long-term profitability of the firm. Marketing, on the other hand, does focus on orchestrating one-on-one communication with early stage prospective customers and on routing of new prospects for managing subsequent marketing and selling activities of a firm. Organizations have to compete in the global markets and in these markets, it is impossible to avoid transfer of goods without the use of protection laws among other different obstacles. With a wide variety of choices for customers, they become sensitive, increase their demand, and they begin seeking new and improved products. Such an organization will have competitive advantages such as certified ISO 9000, reduction in costs, delivery on time, new technologies and CRM implementation. Marketing activities are important because they add value to CRM through tracking a customer’s activities. CRM, in current days, is considered a buzzword in selling and marketing activities (Bidgoli, 2010). There is tracking of cookies, which is similar to that of Google Analytics, which will allow an organization to build a digital trail of a customer interacting with the firm automatically. Google Analytics does provide the overall trends of the visitors while marketing automation will offer tracking at a micro level hence the organization is able to see the activities of its customers. For instance, a customer will open a paper, view the price information in the paper and this information is able to give sales representatives intelligence regarding their prospects. CRM can include capabilities of emails while marketing using automated software will offer comprehensive marketing system via the email. Most of the features of automated marketing include the abilities of sending blast emails that will display each sales representative, email resending tests among others. Traditional forms of marketing used to focus on the 4ps for increasing market share. The market share was increased through increasing the volume of transactions taking place between a buyer and a seller. On the contrary, CRM currently focuses on use of various strategies, procedures, tools and technologies available in promoting good relationship between customers and sellers for the purpose of increasing the sales volume, profit of the firm and creating customer satisfaction. Ways to Deploy CRM Solutions available for CRM today encompass more than just market automation and sales, but also building customer loyalty, mobile and internet business and Web 2.0 driven value of CRM in the society. Therefore, CRM has expanded to be a key predictor of the business activities done by enterprises. Options available for an enterprise to consider when deploying CRM include hybrid combination, RMS on the premise, on premise CRM that is managed by the vendors, etc. Organizations that employ o-premise deployment method lease infrastructure that include the operation systems. These applications will be installed in the organization’s data center and hence the entire package will be owned by the organization. The firm can customize the applications as needed because it has full control over all infrastructure and data. Siebel CRM product from Oracle Corporation uses this category and according to Gartner, this type of deployment makes up seventy percent of the total CRM market. Vendor Managed CRM deployment on the premise is similar to on-premise deployment although in this case, the vendor is responsible for providing the operational support for the entire application at the site hosting the application. The firm preserves the ability of this application to function and they can customize the application to a specified extent. Modifications on this application can be done by mixing internal resources and resources supplied by the vendors. Use of server roles enables a company to deploy other servers to other servers for performance (Wolenik and Sinay, 2008). Deployment option by the use of Multi-Tenant SaaS allows a vendor to use the application as a service that is licensed by many organizations. The aspects of managing infrastructure and delivery for this application are taken care of by the service provider and it is ensured that they conform to the service-level agreement that is negotiated by the organization. CRM is considered the prime driver of SaaS market since all the basic functions of CRM are applicable to many businesses and a company that seeks immediate impact on sales can employ this option. Key CRM Applications and Functions Most CRM applications are meant to deal with management of customer relationship on behalf of a business, hence the software in these applications are meant to store information and organize various tasks in order to ensure the business runs smoothly and eventually increase the sales and profit. An ideal CRM application should be flexible and scalable in order to be used in varying magnitudes (Blokdijk, 2008). The CRM application often stands alone, but in other circumstances, it may run together with other software for the business for the purpose of contacting customers and managing tasks. Using CRM applications enables a company to create a positive experience to customers making them to come back. CRM applications have various features that are useful to all business sizes and an extensive information database for a firm’s customers. Most CRM applications have been customized for holding information in the databases that serves the customers in the best way possible. These applications are able serve as managers of various tasks within an organization, and managers can, therefore, track work progress at the same time assign the employees tasks to increase productivity using the CRM application. Other tasks such as sending scheduled emails and marketing to mass market through emails thereby makes the employees to concentrate on other tasks. Reports that are customized can be analyzed and printed whenever their need arises. Large enterprises should invest in larger systems that are customized and those that can provide needed information (Scheneider, 2011). Components of CRM Strategy Important components involved in CRM strategy are the development and maintaining of long-term and mutual beneficial relationship with organization’s customers. CRM will include various aspects but the main thing is for the company is to be customer centric using Web-based tools and the presence of the internet. CRM effectiveness depends highly on the focus given to customer’s satisfaction and cross-functions organization (Donaldson and OToole, 2007). CRM is viewed as an application of both relationship marketing and one-on-one marketing and being able to respond to an individual customer basing on what the customer says, and information known regarding the customer. CRM will enable an organization attract, and retain customers by managing the relationship they have by the use of information present regarding the customer and hence improve customer service and profitability of the company. CRM strategy tries to bridge information technology together with the marketing strategies in order to build a long-term relationship with the customer using information intensive strategies. CRM strategies aims at understanding and influencing the customers’ behaviors using meaningful communication; hence, improving acquisition by customers, retention of the customers, customer loyalty and profitability. Key steps in implementing CRM Identification of potential customers is the first step in the process of implementing CRM strategies. This process is essential because it enables the organization to select strategically significant customers that influence in the success of the organization. Necessary processes required for CRM to be successful require capturing customer dimensions and managing the dimension (Kumar and Reinartz, 2012). Most of these consumers will have special needs and due to the value they have to the organization; the organization will develop unique products that will meet their needs. For instance, in the flight industry, there are different classes of travelers. Most planes have business class and the economy class, the contribution of passengers using the business class is high as compared to passengers in the normal class, hence their services have to satisfactory for the business to be successful. The organization must identify these customers and obtain all the necessary information. The other step in implementing CRM is differentiating services meaning that the different customers of the organization will receive different level of product service from the organization based on their values to the organization and their individual needs. For instance, Beiersdorf developed Nivea sun related skin care for its UK customers for providing best protection from the sun’s rays that damage the skin. The organization was well aware of the value that customers who will use this product will bring; hence, they adjusted this accordingly. Successful implementation of CRM requires a customer centric culture in an organization (Dai, 2011). Interacting with customers in an effort to build customer relationship is necessary because it will develop and continue growing hence the organization will increase customer expectations regarding the services they receive. The organization will only make communications with customers who are significantly important. The next step will involve customizing the various products and communications for ensuring the customer’s need are met. The organization should ensure its products are adapted in such a way that every customer has something unique. Communication between the organization and the customer is also customized to be able to address the needs of the customer as well as the profile. Customization will be done in order to increase the customer’s satisfaction including the loyalty exhibited. CRM and a deeper understanding of customer needs Real essence of organizations participating in CRM is to be able to understand specific customer needs and be able to leverage that into their products and services and improve on its profitability on a long-term basis. CRM has dramatic effects on the performance of a company when implemented in a successful manner. For instance, Lowe’s Home Improvement Warehouse made a 265% rate of return when it invested 11 million dollars in its CRM investments. Virgin Wines on the other hand was able to have a twelve percent conversion of its customers as compared to four percent, which they had before implementing CRM. With an integrated management strategy rather than marketing, CRM is able to achieve a sustainable relationship with the customers (Nankervis, Miyamoto, Taylor and Milton-Smith, 2005). An organization is able to gain a deep understanding of the balance between the needs of a customer and the benefits it can achieve by looking at the scenario from both sides (Leland and Bailey, 2011). Understanding the decision making process of a customer has proved to the marketers that 80% of all decisions made by customers are influenced by their emotions. Information processing capability is vital in CRM because it assists in integrating information from various sources sending information. CRM processes have enabled combination of information from sales, customer service and marketing activities (Hill, 2011). Moreover, information technology has enabled organizations to process necessary information regarding their customers. There has been integration of data by using data warehouses. With an emphasis on data centric information, marketers have used the information that is available with less probing on its relevance. Therefore, the CRM database used by the marketers has recorded the demographics of the customers and has managed to reveal the customers. Reference Bidgoli H. (2010). The Handbook of Technology Management: Supply Chain Management, Marketing And Advertising, and Global management. New Jersey: Wiley. Blokdijk G. (2008). CRM 100 Success Secretes: 100 Most Asked Questions on Customer Relationship Management Software, Solutions, Systems, Applications, and Services. New York: Lulu. Dai M. (2011). Innovative Computing and Information. New York: Springer Donaldson B. and OToole T. (2007). Strategic Market Relationship: From Strategy to Implementation. New Jersey: John Wiley & Sons Hill A.V. (2011). Encyclopedia of Operations Management: Field Manual and Glossary of Operations Management Terms and Concepts. New Jersey: FT Press. Leland K. and Bailey K. (2011). Customer Service for Dummies. New Jersey: Wiley. Kumar V. and Reinartz Werner. (2012). Customer relationship Management: Concepts, Strategy and Tools. New York: Springer. Nankervis A., Miyamoto Y., Taylor R. and Milton-Smith J. (2005). Managing Services. New York: Cambridge University Press. Scheneider G.P. (2011). Electronic Commerce. Massachusetts: Cengage Learning. Wolenik M.J. and Sinay D. (2008). Microsoft Dynamics CRM 4.0. Unleashed. New York: Sams Publishing. Read More