The Concept of Customer Relationship Management

The Concept of Customer Relationship Management

Customer relationship management (CRM) is critically important to any businesses, regardless of their levels of operation and size. CRM is the art of managing a good customer relationship and prospective customers (Diffley, 2018) and is all about understanding customers’ scope and developing a good relationship with them by doing what will bring them closer and keep them for the purpose of the business’s good progress. There are different methods of enhancing customer relationships in organisations, including the assistance of the customers in a timely manner, automation of customer support, and continuous engagement. There are aspects that cause poor customer relationships, like not treating customers with respect and not delivering according to promises and customer expectations. It is important to maintain good customer relations to improve customer retention and increase the organization’s profitability. Thus, it is important to manage customer relationships, understand what creates poor customer relationships, and specify the impacts of customer relationship management on businesses.

2. Methods of Customer Relationship Management

Live Assistance of Customers

There are different methods that are used in enhancing customer relationships. One is live assistance of the customers. This is a good way that customer relationship officers use to boost customer engagement. Waskito (2018) contends that businesses using visual engagement tools mark about an 83% year on year increase in annual revenue and achieve 2.7 times greater annual improvement (decrease) in customer effort score. Visual engagement involves communicating with customers visually in the form of screen sharing, Co-Browsing, or face-to-face video conferencing (Lockwood, 2004). The use of visual tools in assisting customers is adopted in organizations and businesses in to save on time for employee interaction as at the comfort of their places. They can interact with the businesses by use of video tools. Video tools involve a one on one interaction between the customer and the organization officer by the use of videos for live assistance (Kotorov, 2003). This saves the time they would have used traveling to meet customer service officials physically. Customers will thus appreciate what does not waste their time. The use of visual engagement tools makes it easy for customers to troubleshoot their software or accounts as well as to ask any questions they have about their transactions (Abhyanker, 2008). This contributes to CRM by ensuring that customers are satisfied by the services offered.

Automation of Customer Support

Another method of CRM is the automation of customer support. This is a method of customer support provided by an automated system like a chatbot and other artificial intelligence software (Taylor, 2015) Today, technology has taken over the world, and businesses are also striving to cope with the technology pace and improve customer experience and support. When there is a delay in customer support delivery, the customers tend to give up with the given business and leave dissatisfied (Abe, 2008). Automating customer support using software like chatbots can redefine your customer satisfaction rates by improving your response times, engagement, and your customers’ interests (Plakoyiannaki, 2006). The businesses develop systems that are fitted with the most commonly asked questions by customers. When customers log into the customer support system, they are first exposed to these questions to determine whether their inquiry is a part of these questions (Johnston, 2012). Since the questions have direct answers, the customer will not have to wait online to get answers to their query. Automation of customer support also avail procedures to customers regarding business transaction processes and any other form of inquiry. This makes the experience of the customers better.

Continuous Marketing Engagement

The other method of CRM is continuous marketing engagement. Customer engagement entails both the physical and emotional connection of the customers to the given brand (Nabe, 2002) If customers are not well engaged in business, they are likely to raise a red flag, which will have a dire consequence to the business. These consequences may include finding an alternative, which is an advantage to the competitors. Actively disengaged customers cause disruption and dissatisfaction within the company (Angel, 2002). When a business gets customers, it is important to try and retain them for the betterment of the future operations of the given business. Royal customers are far more profitable if retained than looking for new customers and making them loyal (Waskito, 2018). As a result, the customer relationship management team must strive to retain loyal customers as they look for new ones, other than finding new ones at the expense of the old loyal customers, as it happens in many businesses. The more engaged the customers are, the happier they are, and the easier it is to retain them, recommend other customers, and buy more (Ivanovic, 2011). Providing a high-quality customer experience is an important component in customer engagement strategy (Peppard, 2000). Engagement can be done by listening to the comments of customers and responding to them.

Social Media

Today, social media has become the most used form of media, and businesses are using it to enhance the customer experience. Social media can be defined as forms of electronic communication through which users create online communities to share information, ideas, personal messages, and other content (Newell, 2000). The customers share both positive and negative experiences and reviews using the business social media and expect an immediate response from the business personnel (Diffley, 2018). When businesses improve on their use of social media and use them for customer service and not just for business satisfaction, they gain increased exposure for their customers. Social CRM is the involvement of social media in CRM (Reinartz, 2004). This is a way of improving on customer relationship management for the betterment of the business operations and gains. Social CRM supports CRM and customer interactions alongside the traditional methods like phone calls (Kumar, 2010). In this case, the customers are able to choose what platform to use depending with the ease of use.  According to Berry (2000), social CRM system helps businesses gather richer, actionable insight about customer sentiment on their company, their brand, and specific products or services. .

3. Causes of Poor Customer Relationship

Poor customer relationship involves dissatisfaction of customers in the way they are treated and how their concerns are handled. Poor customer relationships can have a dire impact on the operations of a business. Poor customer relationships in business results from failure to have a consensus between the customers and the business (Verhoef, 2003). When there is no respect for customers, they tend to back off and look for alternatives that would definitely benefit the competitors (Thakur, 2016). Customers should be treated with respect by employing the right terms, showing respect from the employees. The use of vulgar language when communicating with customers angers them and deteriorates the relationship between the customers and the employees (Payne, 2005). Also, poor customer relationship results from lack of efforts from the customer service personnel. Customers need a constant communication from the business and immediate actions and solutions as well as avoidance of blame games (Thakur, 2016). When there are delays in customer support and response, the customers are forced to seek services elsewhere. This created a rift between the customers and the customer service personnel, thus, creating a disadvantage and bad relationship for the business.

The other causes of poor customer relationships in a business are lack of delivery as per expectations and failure to focus on customer experience. The quality of services offered to customers matters a lot in the way the businesses relate with their customers. It is the hope of every customer that they will receive the expected services and quality goods from the company that they trade in (Bhat, 2016). If this is not the case, there is a rift created, and the relationship between the customers and the business is ruined. When promises are made to customers and not delivered, the customers tend to react in a negative way and this rates the company negatively (Chen, 2003). In addition, the failure to focus on the experience of customers results in unreasonable customer relationships. Businesses should always follow up on the customers and find out how their experience was after every service delivery process (Diffley, 2018). This gives the business the ability to evaluate the process of service delivery and improve on any negative comment given by the clients. The customers are the main assets in a business, and they should thus receive such kind of treatment.

4. Impacts of Customer Relationship Management

Good customer relationship management is very beneficial to the enterprise in the long run. When a business exercises good customer relationship management, it increases its efficiency, effectiveness, and profitability. When the customers are satisfied with the services being offered, they tend to buy more from the given enterprise, thus increasing their sales (Dewnarain, 2019). Also, there is an increase in effectiveness and efficiency as customers are treated the right way and in a way they would like to be, thus improving their experience. Improved ability to target profitable customers, integrated offerings across channels and improved sales force efficiency and effectiveness (Plakoyiannaki, 2006). Good customer relationship management increases customer retention in an enterprise. There is no customer who will be willing to leave an enterprise where they are treated well and where their goals and targets are met (Ivanovic, 2011). The customers will thus be easily retained and recommend others to the enterprise as they are satisfied with the enterprise’s services.

Good customer relationship management creates a great experience for the customers, both new and old. Enterprises that offer good customer relations management services find it easy to attract new customers in their business from competing businesses that lack such a form of services for their clients (Heimbach, 2015). In this case, they are existing customers who recommend their friend to the business, and when they are treated well, they are retained (Waskito, 2018). This increased the market share of the given enterprise, and in this case, they increase their production and profits. Coming up with an acquisition strategy that also promotes retention is a win-win scenario for everyone involved (Buttle, 2019). This encourages customers to recommend others as they are also benefiting from the referrals. Customer satisfaction should be an objective for every enterprise in its quest for growth. A good customer relationship management also offers an enterprise the improved ability to target profitable customers (Goldenberg, 2002). When there is a close relationship between the customers and the enterprise personnel, the customers are well examined and monitored regarding their purchase trends, delivery, and satisfaction levels. Losing some key customers is very costly to an enterprise, and these customers must thus be treated rightly to avoid losses to the company (Kolegayev, 2015). This can only be achieved if there is a good relationship with them, only achievable through customer relationship management to keep the customers on board and satisfied always.

5. Summary

Customer relationship management remains to be a critical field in business that businesses need to put much effort into maintaining at the highest standards. Each business should be ready to invest in customer relationship management if they want to retain their customers and increase their profitability levels. By use of technology, businesses can improve on the experience of their customers by live assistance to limit the time spend seeking services physically, automating customer support for easy access, as well as engaging the customers continually and using social media support. This will help avoid unreasonable customer relationships resulting from poor treatment of customers, resulting in a loss of clients. A good customer relationship management assures a business of customer retention and high profitability rates.




















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