Business success is dependent on the customer relationships with the company. The growing online presence for various global corporations has led to increased interactions between a firm and its customers. The patterns, behaviors and expectations depicted by customers during these communications are vital to the companies efforts when it comes to formulating strategies that can enhance levels of customer experiences and satisfaction. This has led to the inception of CRM approach which enhances the management of customer interactions with a firm. There is the need of utilizing the concept of different types of CRM to forecast the companys CLV.
IntroductionThe success of a given business is dependent on the types of relationships it has developed with its customer base. Through customer relationship management (CRM) model, companies can identify, acquire and retain customers. This enables an organization to manage and coordinate customer interactions across different channels, departments, geographies and lines of businesses (Benfell, 2017). This implies that an organization significantly benefits from the maintenance of a CRM since it facilitates the maximization of the value of a particular customer association. It is imperative for the firms strategic team to analyze customer needs and expectations, which is demonstrated by the companys ability in integrating business, information, stakeholders, business processes and technologies into an intelligible CRM deployment.
Customer lifetime value (CLV) is one component which is interlinked with the type of the CRM adopted by a particular firm. CLV mainly perceives a customer as a stream of income, primarily facilitates the prediction of the value the business is likely to derive from its relationship with a customer (Bradley, 2017). The inception of the technologies such as chatbots or magic mirror has enhanced the ability of different corporations when it comes to improving customer experiences, which are vital in the enhancement of the customer value to the business. There is the need of marketing strategies to focus on the ongoing sequence of the profitable transactions made by the customer. This highlights the importance of the customer relationship practices and approaches, which are measured through improvements in the CLV of a company.
It is apparent that CRM and CLV are correlated. This task will be dedicated to exploring the understanding and utilization of the CLV in various activities and practices of CRM. This report will, therefore, focus on explaining the relationship between CLV and CRM as depicted in identified customer life-cycle.
AimEvaluating a recognizing development of leads and customers as they relate to the CLV through known customer life-cycle.
ObjectivesTo explore the concept of CLV in relation to CRM
To describe and analyse various types of CRM
To establish the benefits of different types of CRM in developing leads and customers.
ConclusionFrom the findings, it is revealed that operational, analytical and strategic CRM exist. The application of these forms of CRM enables the company in the management of leads and prospects which are crucial in the establishment and evaluation of the customer profitability and valuation during their lifetime. It is established that CRM enables an organization to manage and coordinate customer interactions across different channels, departments, geographies and lines of businesses (Benfell, 2017). This is an indication that an organization significantly benefits from the maintenance of a CRM since it facilitates the maximization of the value of a particular customer association.
It is essential for the firms strategic team to analyze customer needs and expectations, which is demonstrated by the companys ability in integrating business, information, stakeholders, business processes and technologies into an intelligible CRM deployment. Establishing the profitability and the value of the customers through CLV indicators such as retentions rates, leads and prospects management is another crucial element associated with CRM practices (Damm & Monroy, 2011). Operational, analytical and strategic CRM are typical forms of customer relationship management whose functionalities are interlinked to facilitate successful completion of the customer life-cycle. It can, therefore, be asserted that CRM promotes the development of the long-term interactions with customers, which enables a firm to get an insight into the needs and expectations of the customers. Insights into particular details or requirements of the customers help the company to have significant leads and appropriate approaches to satisfying the customers
References BIBLIOGRAPHY Bauer, E. (2017). An Introduction to Different Types of CRM Systems. Propeller, 1-7.
Bradley, S. (2017). Customer Experience, Retail, Marketing: Exploring the Relationship Between CRM, CX & CLV. Plexure, 1-7.
Chaturvedi. (2009). Customer Relationship Management. Excel Books India.
Damm, R., & Monroy, C. R. (2011). A review of the customer lifetime value as a customer profitability measure in the context of customer relationship management. Intangible Capital , 1-5.
Duffy, J., Koudal, P., & Pratt, S. (2015). The Future of Collaborative Customer Relationship Management: Integrating Demand and Supply Chains. Deloitte Consulting, New York, USA, 1-31.
Iriana, R., & Buttle, F. A. (2006). Strategic, Operational, and Analytical Customer Relationship Management. Journal of Relationship Marketing, 1-22.
Kumar, A., Sinha, C., & Sharma, R. (2007). Customer Relationship Management: Concepts & Application. Dreamtech Press.
Kumar, V., & Reinartz, W. (2012). Strategic CRM. In Customer Relationship Management. (pp. 35-53). Berlin: Springer, Berlin, Heidelberg.
Lamont, J. (2001). Analytical CRM: Capturing Data to Cater to Customers. Knowwledge Management , 1-7.
Taylor, M. (2014). Operational CRM Extensive Overview. 1-7. Retrieved from http://crm.walkme.com/operational-crm-extensive-overview/
Tkachenko, Y. (2015). Autonomous CRM Control via CLV Approximation with Deep Reinforcement Learning in Discrete and Continuous Action Space. Cornell University Library , 1-7.
Appendix A Literature Review
Leads and Customers as they Relate to the CLV
CLV is one of the customer metrics are utilized when it comes estimating the value and profitability of the customers affiliated with a particular brand or business. Damm & Monroy (2011) asserts that the wrong investment in the customer relationships is associated with potential risk of destroying the customer value and profitability, which can be detrimental to the success of the firm. Corporations are often required to justify their efforts in marketing activities, which highlights the significance of adopting marketing practices which can be linked to the future value of the customers as well as the firm business performance (Damm & Monroy, 2011).
The use of CLV mechanisms enables a company to quantify the possible monetary customer value over their lifetime. This enhances the estimation of the financial value of the customers, hence helping the firm to focus on profitability, classifying of the customers and evaluating the returns on investments channeled towards customers (Bradley, 2017). This is an indication that the primary function CLV is to increase the accountability and transparency of the marketing activities as they relate to the applied marketing strategy and the companys financial outcomes. Peterson et al. (2009) aver that customer relationships play a crucial role in the improvement of the firms CLV.
The CRM facilitates the establishment of the long-term interactions with customers, which enables a firm to get an insight into the needs and expectations of the customers. Insights into particular details or needs of the customers help the company to have significant leads and appropriate approaches to satisfying the customers (Damm & Monroy, 2011). According to Tkachenko (2015), customer discernments provided by the firms CRM avails suitable knowledge which can be utilized in the improvement or development of the new product. This implies that a business should frequently evaluate and compare the costs incurred in the customer acquisition and retention to decide on the strategy to be adopted for the long-term future. It is therefore essential for an organization to keep track of the CLV determining factors such as the expected lifetime of the customers and customer retention rates. Peterson et al. (2009) contend that these activities can be achieved with the aid of the firms coherent CRM practices.
Customer Relationship Management
Kim et al. (2003) assert that the CRM approach is a crucial component in business as far as the management of the customer interactions with a firm is concerned. The CRM models attest the abandonment of the traditional functional marketing which focused on the development of products and customer acquisition. The emphasis is now placed on the comprehensive marketing strategies which prioritize the firms relationship with the customers (Kim et al., 2003). Technological advancement has also been vital in enabling the businesses to embrace holistic views regarding customer relationships, ultimately paving the way for the shifting from transactional-based marketing towards relationship-centered marketing. Damm & Monroy (2011) observe that improved information technology has played a primary role enhancing the functionalities of CRM, especially in aggregating customer data and discernment of the customer trends and patterns.
It is imperative to establish long-term relationships with the customers, which in turn increases the companys CLV rate. According to Kumar, Sinha & Sharama (2007), a business benefits significantly from CRM. These benefits include improved customer retention, value and loyalty and an improvement in the customer profitability. CRM also facilitates the creation of the value for the companys loyal customers and customization of the firms products and processes (Kumar, Sinha, & Sharma, 2007). It is revealed that relatively higher retention rates are an indication of the current growing value of the customers. Chaturvedi (2009) asserts that identification and acquisition of the customers should be primarily based on the financial CLV and customer profitability.
Distinguishing different phases of the customer relationship is a crucial aspect when it comes to the companys implementation of the CRM. Bradley (2017) reveals that marketing concept should encompass developing and managing ongoing customer relationships. It is also highlighted those customer relationships are dynamic, and they keep on evolving. It is therefore essential for an organization to interact with its customers as well as managing relationships distinctly at each stage (Bauer, 2017). It is crucial for a firm to understand its relationship with the customers in terms relationship initiation, retention (maintenance) and termination. These dimensions ought to be captured and conceptualized in the CRM activities, which are determinant to the type of the customer relationships established.
The onset of the customer relationship is vital since they set the precedence of the futur...
If you are the original author of this essay and no longer wish to have it published on the thesishelpers.org website, please click below to request its removal:
- Al-khaia Group and the Purchase of CRM Software - Research Proposal
- Employee Performance Management Intervention: Case Study of Google
- McGregor's Theory X and Theory Y of Employee Motivation - HRM Coursework Example
- How to Overcome Self Issues at the Workplace
- A Summary of Step One of the Multidisciplinary Approach
- Samsung History and Background - Essay Example
- HRM Essay Sample: Personnel Recruitment