Customer Relationship Management Research Paper

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Customer Relationship Management

Over the last several years, customer relationship management (CRM) has become an area which is helping firms to reduce costs and increase productivity. This is because it is focusing on offering small, medium and large sized businesses with number of solutions to streamline their operations. While at the same time, they are utilizing technology to integrate various solutions together. The most notable include: technical support, sales, marketing and customer service. (Brookings, 2013) (Buttle, 2012)

These areas are helping firm to reduce their costs and more effectively understand what is most important to their customers. This is when they can introduce products and services which are most in demand. These objectives are achieved by creating a single platform and adapting to the organization itself. This offers a firm with a customized solution (via the Internet) that assists them in understanding cliental and the marketplace. (Brookings, 2013) (Buttle, 2012)

Evidence of this can be with a study that was conducted by Scribe Software. They found that 88% of organizations have realized either full or partial integration. This is transforming the kinds of solutions that are needed and the way firms are interacting with cliental. The result is that there are many different positive and negative effects. (Lawson, 2013) (Brookings, 2013) (Buttle, 2012)

For instance, CRM protocols help firms to reduce costs and understand the mindset of consumers. However, the problem is that some companies will only integrate select aspects of these solutions. In the study that was conducted by Scribe Software, they found that 15% of firms were fully integrated and utilizing these applications effectively. At the same time, only 8% of respondents were embracing some kind of mobile solutions. This is showing how advancements in technology are having a negative impact on companies. As they are unprepared to adapt with future changes and do not understand the most efficient ways to use these solutions. This is problematic, as it could hurt their competitive position. (Lawson, 2013) (Buttle, 2012)

To avoid these kinds of issues requires that all firms must focus on using these solutions as effectively as possible. This will be accomplished by understanding the strengths and weaknesses of using these protocols. Together, these elements will illustrate what challenges firms must be aware of. This will enable them to fully integrate these solutions and reduce any kind of problems. (Brookings, 2013) (Buttle, 2012)

The Strengths of CRM Technology

CRM solutions have been shown to offer firms with a number of benefits. The most notable include: improved customer service, the ability to customize / market specific solutions and there are lower expenses utilizing these solutions. The combination of these factors is leading directly to an increase in the number of firms who are using this protocol. (Brookings, 2013)

For example, the below table is showing the results of a study conducted by IBM. They found that the number of firms who are planning to fully integrate these solutions will vary depending upon the size of the firm. In general, the majority of medium and smaller employers planned an implementing these protocols into their organization. ("A Smarter Approach to CRM," 2011)

Number of Firms Who Plan on Full Implementing CRM Solutions in the Future

Size of Firm


1 to 99 Employees


100 to 499 Employees


Over 500 Employees


("A Smarter Approach to CRM," 2011)

This is showing how the benefits offered by CRM technology are leading to more organizations implementing them. These shifts have created changes in the way these solutions are utilized with them becoming an integral part of the operations for numerous firms. ("A Smarter Approach to CRM," 2011)

Improved Customer Service

CRM solutions allow firms to customize specific services for customers. This helps them to understand and address the needs. In the future, they can use the relationship which has been established to cross market a number of other products and services. According to Brooking (2013), this enables companies to compete more effectively and to build loyalty with her saying, " The collecting of information identifies customers' buying habits, including preferences and frequency, CRM systems give businesses a closer look at their customers' wants and needs so they can provide better customer service solutions. These improvements lead to more sales because customers are likely to be repeat buyers if they receive a quality product and exceptional service. They are also willing to suggest those products and services to friends and family.
Through a CRM system, customer service representatives have detailed information on them readily available. This helps them to adapt their approaches as needed." (Brookings, 2013) This is showing how improved CRM technology enables firms to understand what products and services customers demand. It is at this point, when they can be able to use their strategy to address the specific needs of the individual. Over the long-term, these solutions improve their experience and result in increased sales. ("A Smarter Approach to CRM," 2011)

The Ability to Customize and Market Specific Solutions to Clients

CRM enables firms to customize their message based upon the client's buying habits and the patterns they exhibit. This helps them to create messages that will spark their interest and increase the odds of the purchasing different products / services. This helps corporations to more effectively market their merchandise. Evidence of this can be seen with comments from Brooking who said, "CRM makes a wide range of data available to business owners and their department heads. This information allows them to target specific consumers with marketing that is based on their buying behaviors. The ability to target so precisely ensures that customers get the products and services they want and need in a timely fashion. The data can also help companies determine which types of offers customers respond best to. Equipping your sales team with these details can help them creatively and strategically pitch new product offers to customers, which can increase sales." (Brookings, 2013) This is showing how CRM solutions will help companies to effectively customize their message to cliental. When this happens, they will more successfully respond to critical challenges and can adjust to changes in demand. Those organizations which can do this are more competitive and will realize higher profit margins over the long-term. ("A Smarter Approach to CRM," 2011)

There are Lower Expenses

The biggest advantage of CRM solutions is they will decrease costs between 15 to 60%. These reduced expenses will result in the firm realizing higher profit margins. For instance, CRM solutions help sales personnel to determine the most effective times of the year for promoting different products to customers. It is based upon their buying patterns. (Wang, 2012)

A good example of this can be seen with the three factor approach. It is focused on understanding how the needs of the customer will improve the effectiveness of marketing campaigns. This is accomplished through realizing the most efficient approaches for connecting with various demographics of customers and the platforms they are using. These factors will lead to a cost saving by utilizing those platforms that will produce the greatest rewards. (Wang, 2012)

Evidence of this can be seen with comments from Wang (2012) who said, "A three-factor (customer interaction management capability, customer relationship upgrading capability and customer win-back capability) measurement model of CRM capabilities is developed and analyzed. The results support the hypothesized influences of customer orientation, customer-centric organizational system and CRM technology on CRM capabilities, as well as the influence of CRM capabilities on organizational performance and cost reductions. This study provides a useful measurement mode of CRM capabilities that managers can use to evaluate the status of CRM capabilities for their firms. Managers may also improve their CRM programs more effectively and efficiently by deploying such strategic resources of firms as customer orientation, customer-centric organizational system and CRM technology to build and strengthen their CRM capabilities. This will lead to lower costs and increased amounts of productivity. (Wang, 2012) This is showing how CRM solutions are leading to lower costs. The result is that this is increasing a firm's profit margins by keeping expenses under control. CRM is an essential tool in analyzing and achieving these objectives. It is at this point, when revenues will rise from these improvements in the balance sheet.

The Weaknesses with CRM Technology

CRM technology has a number of weaknesses to include: learning curve issues and resistance. These factors will have an impact upon the effectiveness of these solutions and if they are openly embraced. This will decide how quickly these protocols are implemented inside an organization. Depending upon the severity of these challenges, there will be varying responses and protocols that are embraced.

Learning Curve Issues

Whenever any kind of new technology is introduced, there will be challenges associated with learning to apply the different applications. This is because everyone must be proficient.....

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