CRM aims to develop strong customer relationships through understanding customer needs and behaviors. There are several stages in developing customer relationships from an initial contact to a long-term institutional relationship. Customers can be categorized as platinum, gold, iron, or lead based on their value and loyalty. CRM provides advantages like increased efficiency, cost reductions, better customer service, and more profits. However, significant investments of time and money are required and it can threaten existing power structures and processes.

1. CRM (Customer Relationship
Management)
●“Strategy used to learn more about customers’ needs and behaviors
in order to develop stronger relationships with them”
●“the development and maintenance of mutually beneficial
●long-term relationships with strategically significant customers”

2. Stages in the development of a Customer
Relationship
● The Pre-relationship Stage
– The event that triggers a buyer to seek a new business partner.
● The Early Stage
– Experience is accumulated between the buyer and seller although a great
degree of uncertainty and distance exists.
● The Development Stage
– Increased levels of transactions lead to a higher degree of commitment
and the distance is reduced to a social exchange.
● The Long-term Stage
– Characterised by the companies’ mutual importance to each other.
● The Final Stage
– The interaction between the companies becomes institutionalized

3. Customer Types
● Platinum Heavy, reliable users, not price-sensitive, try new
products, loyal
● Gold Large users who push for price breaks, shop around and not
so loyal
● Iron Low volume or intermittent users; cost to serve them is
quite high
● Lead Demanding, want special attention but don’t buy much and
show no loyalty

4. Advantages
● Quality and Efficiency
● Decrease in overall cost
● Customer Attention
● Increase profitability
● Decision Support

5. Advantages
● While company is quickly growing, customers are more satisfied as well
● Service provided in a better way, and a quicker way
● Sales force automated
● Integrated customer information
● Certain processes eliminated
● Operation cost cut, and time efficient
● Brand names more quickly established
● A central database so that everyone in your company can keep track of customer
contacts
● Sales and marketing teams can benefit from having all this inside knowledge about
customers
● Lets you set up rules for distributing work throughout your company
● Lets you pick and choose the functionality that you want

6. Disadvantages
● Organizational wise change of priority to customers.
● Significant investment of time and money
● Threatens management’s control/power struggle
● Heightens people’s resistance to change
● Inappropriate integration leads to disaster

7. Business Process Reengineering
● The search for, and implementation of, radical
change in business processes to achieve
breakthrough results
● Start from the future and work backwards
● BPR is not easy - serious work
● BPR is not free - financial & cultural
● BPR often driven by fear and greed
● Change is a “struggle”; BPR is a “war

8. BPR : Strategy
● Stakeholder Assessment - shareholders, customers,
employees
● Determine which stakeholder expectations should be
met to gain competitive advantage
● Determine how to redesign to meet expectations
● Map out IT solutions to support
● Develop & implement new processes, etc