CRM is the acronym commonly used for customer or client relationship management. CRM refers to a process used by an organization to learn more about its consumers and to improve marketing productivity.
The goal of any business is to derive maximum profitability from its customer base. The CRM value chain describes the process that a business must have in place to gain the profitability wanted from customers. Five key steps are necessary for the successful implementation of a CRM strategy, and are commonly referred to as “the five step process for CRM.”
Customer portfolio analysis
This first step involves analysis of your organization's customer base to determine what groups and kinds of customers are the most profitable. This will define your organization's target customer base.
Customer intimacy is the process of getting familiar with the individual customers within the organization's target customer base. Relationship building is predicated upon how well you know your customer and that includes everything from buying habits to when their birthday is. Every interaction with a customer is an opportunity to improve customer intimacy and learn more about your target market. This step usually includes building a customer database to store the gathered information.
Network development refers to the identification and development of strong relationships with organizations, networks and people that are critical to your success in servicing your customers. These relationships will include external partners such as suppliers and investors, as well as internal partners, your employees.
Value proposition development
This step builds on the information gathered while working on customer intimacy. Once you have identified your target customer, you can move forward and create a tailored value proposition for this customer. In creating value for your customer, your value proposition must also create value for your organization.
Customer life cycle management
The customer life cycle refers to the ideal customer journey: from potential client to product/service advocate. It also relates the continuing relationship you maintain with your customer. Managing this cycle requires structure and attention to process. Your organization must determine how it will organize itself to effectively manage customer relationships (structure). As well, thought must be given to determining how your organization will approach customer acquisition and retention, as well as the performance measurement of your CRM strategy (process).
- “Journal of Economic and Social Research”; Customer Relationship Management: Emerging Practice, Process, and Discipline; Atul Parvatiyar, Jagdish N. Sheth; 2002
- "Profit Power of Customer Intimacy"
- Customer relationship report
- “Customer relationship management: concepts and tools; Volume 13”; Francis Buttle; 2004