Customer Relationships Marketing

Literature Review The Evolving Sales and Marketing Landscape Marketing and business development professionals are confronting a rapidly different and changing business landscape. The traditional business model that was once the standard is now being transformed due to technology drivers that make advanced marketing and sales capabilities possible. The business model of yesterday supported mass marketing, mass production, and standardized cookie-cutter products and services. Enterprises will have fall behind the competition if they continue to rely and operate on this substandard model. Today, companies are re-engineering their operations and investing in enhanced IT infrastructures, which enable them to provide customized, personalized, information-rich products and services. The new objective for marketers and business developers involves understanding the needs of their clients and the markets that they serve. This new focus on providing customer value is redefining business processes. Professionals, who understand and anticipate this shift, are positioning themselves ahead of the competition. The Impact of Technology Enabled Business Processes There is no denying the effect that technology has had on the way we conduct business. In recent years, technology has begun to play a significantly larger role in all aspects of business, including sales and marketing. Business processes must be re-engineered to incorporate a pro-active strategy for using information and IT to build a competitive advantage over other organizations. In many instances, the functionality provided by sales and marketing technology only automates current processes. Therefore, it is imperative that processes are clearly defined and well proven. Automating a poorly understood or followed process usually results in failure. Technology must be used as an enabler to support an already sound sales and marketing strategy. Beyond automating sales and marketing capabilities, technology is now designed to provide professionals with a wealth of information about their company's clients and the markets that they serve. Companies are now able to collect data about their customers that when analyzed and utilized properly, can result in a competitive advantage. Online shopping is a prime example. If a customer makes a purchase, then the transaction is completed and revenue is generated. However, if a sales transaction is not made, the company still collects the shopper's behavioral data and stores it in a marketing database. The company then has the opportunity to segment and analyze this data in order to learn more about that particular customer shopping habits. An analysis can then be performed to determine why this person did not make a purchase as well as what can be done differently to persuade this person to buy their product. The company can now position the four Ps of marketing: product, price, promotion, and place to better serve this customer. This process the company has taken unlitmately succeeds in developing a relationship with the customer. The company now knows more about what the customers preferences are and how to offer them. Consequently, the customer has a vested interest in the relationship as well, and is more likely to conduct business with that company in the future. 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 One of the key reasons that companies invest in CRMs is because they can provide an analysis of customer data that can result in an improvement in process or product. CRMs can achieve an improvement in marketing processes because they help enterprises identify and target their best customers. An