Meaning of Customer Relationship Management

Customer Relationship Management (CRM) is directly related to the satisfaction of customers’ needs. CRM takes care of expectations of customers and what and how a product is presented to the customer.

CRM is defined as a system that comprises large amount of customer data and presents it in a suitable manner. This information helps in retaining old customers and developing new potential customers. CRM plays a vital role in effective decision making in marketing management.

CRM can also be defined as ✓ A process of creating and maintaining relationships with business customers/consumers, a holistic approach of identifying, attracting, differentiating and retaining customers. ✓ A process of integrating the firm’s value chain to create enhanced customer value at every step. ✓ An integrated cross functional focus on improving customer retention and profitability for a company/organization.

Need of CRM

In competitive times the challenge is to keep the customers in fold. Companies/organizations lose many loyal and profitable customers due to absence of CRM. There has been a great urgency of CRM in marketing management as best as possible to compete well in today’s innovative business world of high technology. So to create new customers and to retain old (loyal and profitable) customers, it is very much urgent to implement CRM in marketing management. To survive in today’s tough competitive business environment, CRM is very much necessary. CRM leads to customer retention, customer loyalty, customer satisfaction, and word of mouth publicity.

The major importance of CRM is that it also leads to good public image of the organization without which no business is possible. Lastly it is very much right to say that CRM is deciding factor for tomorrow’s business.

IT (Information Technology) plays very important