Page 31 - Banking Finance JANUARY 2017

ARTICLE

tomers is what CRM aims at building in the long run. "CRM order to induce interest a stranger is asked to go for explo-
is a strategy that focuses on the profitable development and ration or trail. Suppose a customer drives a car worth Rs. 7
management of customer relationships" (Lovelock, Wirtz & lacs today may not have the purchasing ability at the mo-
Chatterjee 2010). CRM involves five distinct processes like ment to buy a car worth Rs. 12 lacs. For the company which
strategy development that involves defining the vision and is selling a Rs 12 lac car in the Indian market, the customer
mission statement from the perspective of the customers. mentioned above is a stranger. Yet the company is inducing
Value creation is another process wherein a firm wants to trail or exploration for these types of customers even to-
create values within the ambit of stated business strategy. day. The reason is very simple.
Multichannel integration is another area which CRM ad-
dresses with precision. They want to make these strangers a prospective customer
in days to come when the income level of the customers is
A company communicates with all the Ps of Marketing mix likely to change in upward direction. The relationship goal
like product ,price ,place , promotion ,physical evidence, here is to acquire the customer's business in the long run.
people, process and productivity. CRM minimizes the chal- The sustainability of the competitive advantage is generally
lenges posed by the various interfaces by providing a uni- low as the company struggles to device ways to look attrac-
fied customer interface. Information management -the big- tive.
gest of all challenges tries to synchronize information gar-
nered from all sources and provide them at all touch points The next phase of relationship building is known as acquain-
by creating a dynamic data repository. tance. The customer is no longer stranger. He/She knows
the company, its product offering or even the brand name.
CRM, therefore, should not be seen merely as a technology The number of trials & exploration has led to the familiarity
. It is an encompassing process to bolster and build profit- with the product & the brand. The time is ripe to sustain
able customer relationship. CRM finally through Perfor- and enhance this relationship. The product offering has to
mance Assessment tries to understand whether it has been be standard, interlaced with more value. The source of com-
able to create value for its various stakeholders or not. petitive advantage is to create satisfaction.

"Firms' relationships with their customers, like other social This satisfaction emanates from the various explorations and
relationships, tend to evolve over time" (Zeithaml, Bitner trials - customer has undergone in the past. The problem at
Gremler & Pandit 2011). A customer goes through four dis- the acquaintance level is that the product offerings remains
tinct phases. First he is a stranger for a firm and then a almost the same with that of the competitor, therefore, it
relationship is forged and the customer who was a stranger is sometime difficult to sustain this phase. The relationship
initially becomes an acquaintance. Over a period of time time horizon is also short as the buyer has plenty of choices
this relationship develops and the customer becomes a friend
and finally emerges as a partner.

This continuum of relationship needs to be maintained very
well. The product offering for a customer who is still a
stranger has to be very different. It has to be attractive vis-
à-vis the competitor- meaning thereby that the product
offering cannot be below par. "Strangers are customers and
suppliers in a pre-awareness and/or pretransaction period".
(Michael D. Johnson & Fred Selnes 2004).

The customer is a stranger because she has not become a
potential customer to a particular firm as yet even though
he or she is not a stranger to other competing firms. In

BANKING FINANCE | JANUARY | 2017 | 31

Copyright@ The Insurance Times. 09883398055 / 09883380339