The Shift to Relationship Marketing
Though many of today's marketing practices have evolved due to increasing
technology, the marketing environment still centers around the four Ps of
marketing described above. However, in order to remain competitive, companies
must create a unique set of those four Ps which appeal to each individual
customer and sets them apart from their competitors. Target marketing is no
longer an efficient use of marketing efforts because a great deal of resources
can be lost to uninterested individuals while in the process of trying to
capture potential customers. Because of the potential loss of resources, there
is now a movement away from targeting markets to specific individual customers.
What is now required is customer-oriented relationship marketing. Many studies
have shown that it can cost anywhere from four to ten times as much to acquire a
new profitable customer as it does to maintain repeat buyers. These statistics
are one of the driving forces behind the move to relationship marketing, which
focuses its emphasis on customer retention rather than attraction. This type of
strategy calls for a different type of marketing technique that is customer and
information driven as opposed to product driven. With this in mind, marketers
and business developers are now seeking new ways to obtain, manage, and analyze
information on their customers. As we are increasingly finding, one of the most
effective ways of capturing and utilizing customer data for marketing and sales
efforts is by investing in technologies such as a customer relationship
management system (CRMs).
The Benefits of a Customer Relationship Management
System According to the Gartner Group, the term CRM describes methodologies,
software, and usually Internet capabilities that help an enterprise manage
customer relationships in an organized way. From a technological standpoint, CRM
can be categorized as the largest compilation of IT concepts to date. It
involves moving the ownership of customers away from individual departments to
the enterprise level. In addition, its focus is also on best serving the needs
of each customer on a personal level rather than serving the needs of target
markets as a whole. The primary functionalities of CRMs are still debated by
experts, and often times it varies depending on the purpose the system is
intended serve in that instance. However, the high-level buckets of CRM
capabilities can be categorized according to customer service, marketing, and
sales. Although customer service is an important aspect of customer relationship
management, it is primarily employed by companies who sell products as well as
have call centers and websites to market and/or sell their merchandise. For
example, most consulting firms are in the business of marketing and selling
professonal services. which results in their consultants and client managers
having closer relationships with customers. Therefore, call centers are not a
major aspect of their operations and delivering transactions based customer
service over the web is not necessary. The scope of this paper is to explore
CRMs and how they improve the sales and marketing efforts within professional
services firms. With that in mind, this paper will not provide an in-depth
analysis of the customer service capabilities offered by CRMs. Marketing
Capabilities of CRMs
