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That definition, in our opinion, is too narrow, and doesn’t address the issue of customer loyalty. A coffee shop that gives a free cup to a customer after his fifth purchase is an example of CRM. A better definition of CRM is the process of identifying, developing and maintaining individual relationships with certain customers in the hope of maximizing the total customer lifetime value. Hopefully, our coffee shop owner in our example above, also makes the effort to know her loyal customers by name, as that greatly increases the chances of getting repeat business.
Since technology plays a central role in CRM, very often CRM is synonymous with IT. But the IT department only manages the technology and to some extent ensures data quality, it does not (or at least should not), be the group that analyses the data to make inferences about customer preferences. Furthermore, to gain a complete understanding of the company’s interactions with the customer, the company needs to organize its delivery services around the customer, which entails modifying internal business process across different departments. The company’s senior executives therefore need to be on board and support the project. Simply put, implementing CRM is a big job, and the bigger the company, the more resources it will take to implement CRM successfully, and therefore, the more it will affect the price of your products.
Because of the reasons outlined above, it might not surprise you then to learn that well over 65 per cent of companies that attempt to implement a CRM project ran over budget or failed to deliver on the project objectives. The implementation of a successful CRM programme therefore should be regarded as a long-term investment that includes new implementing new IT systems, re-engineering business processes and training staff.
ECRM
eCRMs can also be implemented on the Internet to target individuals online and offer targeted promotions based on their browsing habits. Each click a user generates on Amazon for example is passed through its servers, which in turn push recommendations based on the buying habits of other users of the site. Apple’s iTunes