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Customer Relationship Management

Customer relationship management (CRM) is the new title for relationship marketing. Explain why this is so and suggest how CRM can be effectively incorporated into a marketing plan.

Over the past fifteen years Relationship marketing (RM) has been slowly developing into customer relationship management (CRM) (Gilligan et al 2003). Markets change, even when profitable, they may mature and saturate, so we cannot be surprised that companies are changing their strategies in order to satisfy the consumer (Sturdy et al 2001). The difference between the two can be seen within the two definitions; Relationship marketing as a company that specialises in relationship marketing helps clients build relationships with their channel partners and employees, as well as customers (Duncan 2002). Whereas customer relationship management is as McDonald (2002) defines: A continuous performance initiative to increase a company's knowledge of its customers. It is clear that from these definitions that the main difference from the two is that RM concentrates on all of its relationships whether it is with its partners, employees or even its customers. Where the quote says: ‘even its customers' it gives off the idea that the customer is the least important of the three, in contrast to CRM, whereby it is simply all about the customer.

Solomon et al (2002) suggests that marketers are carefully defining customer segments and listening to people as never before. Many companies have realised that the key to success is building lifetime relationships between brands and customers. Marketers who believe in this philosophy are making an effort to keep in touch with their customers on a regular basis, and are giving them reasons to maintain a bond with the company over time. Some companies establish these ties by offering services that are appreciated by their customers. Many companies donate a small percentage of the purchase price to a charity such as the Red Cross or the World Wildlife Fund,...