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The Conditions when a Comprehensive Customer Relationship Management Program Becomes Useful for an Organization

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The best CRM strategy calls for a two-step process in enhancing a company’ s relationship with customers. In the car dealership industry, for example, the recommended first step involves a database analysis, in which the companies can utilize the information already on file in their DMS to identify the marketing opportunities quickly. The DMS data usually consist of sales-to-service benchmarking, consumer geographic studies and vehicle ownership analysis. The next step is refining the marketing expenditure so that a portion of the budget is channeled to the less expensive marketing techniques of interacting with customers through direct mail, telephone or e-mail.

The reason is that less than 10 percent of consumers who see newspaper or TV advertisements are actually in the market for a vehicle but nearly all of the customers in the DMS data know people who are (Kavanaugh, 2004). A common mistake in the use of CRM is thinking of the system as an IT function. Operations managers believe that once they acquired the software system, the technology will do the rest. Actually, the software is just one part of CRM whose function is to automate operations to collect in real time the lifecycle behavior of customers so this can be measured against the key performance indicators and help an organization achieve its customer relationship goals (Wikipedia).

There are three facets to CRM: operational, collaborative and analytical CRM. The operational aspect is intended to support the front office and business processes, including the sales, marketing, and service units. Its main objective is to improve interaction with customers and thus considers that customers have different needs and behavior and should be handled differently.

This calls for a database recording the history of contacts with customers, which information should be within the fingertips of the staff. As for collaborative CRM, this covers the direct interaction with the customer and may involve different channels like the Internet, e-mail, and automated answering systems.

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