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Advanced Interactive and Relationship Marketing (MK4002)

Master of Science in Strategic Marketing

Student Name: Zhang Feng

Student ID: w11037600

Name of Lecturer: Ms. Magdalene Kong

Total Words Account: 957 Due Date: 9 March 2012

Customer Relationship Management (CRM) has been defined in several ways, reflecting a variety of viewpoints of different people. Some describe CRM is a business strategy that optimizes profitability, operational efficiency and customer satisfaction by implementing customer-centric processes (Zablah et al. 2004); others as a philosophy that values two-way communication between company and customers; a kind of capability that allow companies to determine which customers are most valuable and to react in a timely manner with customized product and service offerings that closely match customers needs, or a technological tools (Green and Keegan, 2005, p.192; Zablah et al. 2004). CRM is considered to unite the potential of relationship marketing strategies and IT to increase customers satisfaction and loyalty by offering a more responsive and customized services; create customer lifetime value; generate significant profit; long-term relationships with customers and other key stakeholders (Croteau and Li, 2003; Dimitriadis and Stevens, 2008; Mukerjee and Singh, 2009);

Within the present business environment, characterized by an increasingly aggressive competence, the battle to gain customers confidence, win customers loyalty are stronger every day (Grimn et al. 2007). Maintaining and nurturing good relationships with existing customers is more important than ever before for companies to thrive in a slow-moving economy (Ha and Wang, 2011), this particularly pertains to the retail industry as the competition gets tougher along with the expansion of retail channels such as multi-channel retailing, retaining customers and building relationships with other value-adding allies become critical to corporate performance. And companies realized that acquiring new customers can be more costly than keeping existing customers and longer relationships are often more profitable than short-term associations (Reichheld and Sasser, 1990). Therefore, CRM becomes an important strategy for companies (Palmatier et al., 2006). Nowadays, CRM strategy is widely implemented in various industry and areas, specifically for service films having an important dematerialized part of offering, such as airlines companies, hotels industry or banks (Willcocks and Plant, 2001; Sigala, 2005), through offering the membership card and online registration, company is able to acquire customers individual particular and own preferences on certain services

and product, so that the films is able to customized the services and offerings so that increase customers satisfaction level (Dagger and OBrien, 2010; Sigala, 2005). Developing good relationship with customers is no longer a matter for private sectors, the government and public sectors are also focus on in order to build good reputation and selling a good image to the public. Silva and Batista (2007) mentioned that UK government adopted new business approaches and applying new information technologies, which the new CRM system to boost up the government reputation, and also adapted the model from Kell (1993) to improve the relationship between citizens and businesses with those government agencies, to hear them more effectively. Similarly to Singapore government, Prime Minister Mr. Lee Hsein Loong mentioned on his national day rally in 2010 that Member of Parliament and grassroots leaders should use multimedia to communicate with citizens and getting feedback and view exchange from the ground, such as facebook, blogger and twitters. CRM can also be used in the education setting, such as Seeman and OHara (2006) explored CRM in a higher education setting and found out that the benefits are student-centric focus, improved customer data and process management, increased student loyalty, retention and satisfaction with schools program and services. Marketing Institute of Singapore (MIS) also used CRM to build their own database for those part time students who enrolled with school for postgraduate courses. MIS consistently send out the updated newsflash, executive training program to students, and also invite them for alumni dinner in order to retain the relationship with them. Personalization is one of the important attributes of CRM, and it must be integrated as part of CRM approach and personalization results in both qualitative and quantitative benefits for companies (Jackson, 2007). Qualitative benefit including increased customer loyalty and increased share of customers, which not directly measurable, but are critical to the long-term viability of any companies. Other qualitative benefits are also including increased brand awareness, increased customer satisfaction scores, increased number of referrals. Quantitative benefits are more straight and measurable, including cost saving on the marketing expenditures, and increased revenue.

Nevertheless, CRM is an information system that contains and tracks customers interaction with the companies, including past sales, service records, and

outstanding records (Newby, Nguyen and Sherif, 2007). We have to use data properly and wisely in order to enhance a films abilities to achieve the ultimate goal of retaining customers and gain strategic advantage over competitors.

Knowing CRM is a tool that can help the company to achieve the goals, however, applying CRM concepts and technologies to the company needs thorough dedication. There are some possible problems and issues the management would encounter, which are the barriers before implement CRM, such as poor leadership due to lack of strong commitment and support from management level or different focus area from managements view; insufficient help from CRM vendors. Whats more, staff resistance to use CRM is another barrier that may stop the success of CRM. Issues also happen after implementing CRM, such as the rising standard for CRM excellence. The standards changes from last time due to customers demand and competitors growth (Newby, Nguyen and Sherif, 2007); lack of ongoing training efforts so that staffs do not have knowledge and skill to fully utilize CRM in order to acquire, sustain analysis those useful data (Beasty, 2006). CRM can enhance an companys ability to improve the standard of customers services, which in turn can generate revenue; create long life time loyalty customers for the company; increase customers satisfaction; create long term and healthy relationship between customers and company, however, you have to use CRM properly in order t achieve above benefit or advantages.

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