Phase 4 Individual Project Essay Example | Topics and Well Written Essays - 1500 words - 1

Phase 4 Individual Project - Essay Example Customer relationship management is broadly defined as a model through which a company manages its interaction with customers, both current and potential (Kumar & Reinartz, 2012). With the development of technology, the model has incorporated technology and has made it easier and efficient for firms to automate, organize, and synchronize marketing, sales, technical support and customer service. Buttle (2012) states, â€Å"customer relationship management is the major function of an organizational strategy that combines the internal functions and process, and external networks, to create and offer value to target market at a profit.† (Buttle, 2012) Greenberg (2004) defined CRM as â€Å"a philosophy and a business strategy, supported by a system and technology, designed to improve human interactions in a business environment.† (Greenberg, 2004) Fostering good relations with customers is very essential for any business that wants to survive and achieve profitability. Custo mers form the society in which the business operates, hence, they determine to a great extent the performance of the company. They are ‘kings’ in business and therefore should be treated with utmost care and respect. A good customer relationship is healthy for an organization in that it makes consumers develop confidence in the organization and improves their perception on the capability and competence of the business (Kumar & Reinartz, 2012). This eventually creates customer loyalty leading to customer retention. As a result, the company will be in a position to increase its revenues due to the favorable market. According to previous researches, it has been found that it is easier to retain a customer than to attract a new customer. This therefore underlines the importance of a firm to foster good relations with its customer in order to retain them. The main objective of CRM is to create a continuous mutual business relationship with current and potential customers in order to help an organization achieve competitive advantage as it also creates value for the customers (Microsoft Dynamics, 2009). According to Nordic school of thought, in order for an organization to have an effective CRM, knowledge of how to develop customer value and enhance the degree of customer satisfaction is necessary. This school of thought tries to explain the importance of relationship marketing theory and acknowledges the value and importance of such relationship to the business and the customers. It also notes the crucial role played by customers and suggests that customer service should be joined with marketing (Buttle, 2012). According to Morgan and Hunt (1994), customer trust is essential in having a successful customer relationship. Customers’ trust in the business comes up as a result of an assurance that the organization will perform certain activities that will benefit them. Anderson and Narus (1990) state that it is hard to break a trustworthy relationsh ip; even if one party is negatively affected by the deeds of the other, trust can still be restored. In order to build customer trust, a firm should ensure there is consistency in its actions. It should ensure that products and services have the right quality at all times and meet the customers’ needs. In addition, goods and services should be availed at the right place and time. There should be no cases of goods shortages in the market (Kamakura, et al., 2005). One of