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Customer Relationship Management Essay

The case mentioned talks about a cafe and how they can implement an effective and efficient Customer Relationship Management (CRM). The system mentioned is the Decision Support System which is an efficient way to model and record your data and then analyze or use it to make decisions. This system will help the company in making quality decisions related to their customers. In a business like a cafe, the most important task for success is customer satisfaction.

Word of mouth plays a very critical role and this is only developed through efficient and effective CRM in order to stay in touch with the customers and to address and meet their changing needs. As mentioned in the case, the company has relevant data available regarding its customers and the market it operates in. The company has data about local area in terms of population make-up, including a demographic breakdown and income levels of the area. A thorough analysis of the social and demographic makeup of the area can give the company various insights which will help target the company in an effective way.

This is possible through an efficient and customer focussed decision support system. Many companies use some form of system to

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gather information regarding their customers. At a very basic level, a company’s marketing database holds the names and addresses of the customers. This information can be used to segment the customers geographically. This system can be extended and build up further to store information regarding customers’ occupation, gender, income levels etc.

This can be used to segment the customers on a more advanced level and to position the products of the cafe to the appropriate segments and to target each segment differently. (Payne, A. , 2006). The decision support system will help generate a list of customers and their contacts which can be used in mass mails to customers and other various offers or gift packages to loyal customers etc. Introduction to CRM: CRM refers to different ways of managing relationships with your customers by targeting them for specific product offerings.

Moving forward, it means that a company has to empower its customers and provide necessary knowledge to make their own decisions rather than directing their fate. The business eco-system has transformed over time and has evolved from a product oriented system to a customer driven and customer centric system where demands of the customers are fulfilled in real time and companies are trying to be more proactive than reactive in fulfilling and meeting the needs of their customers. (Greenberg, P. , 2004) There are two main goals of CRM: 1. To attract and win new customers

2. To retain and nurture the existing customers (Gartner, Inc. 2009) CRM goals are in sync with the various other activities of the company. The case mentions that the company has given full autonomy to its different outlets which cater to the needs of localities in the areas they operate. This shows that the company is trying to customize its offerings according to the needs of its customers. A CRM system will take the existing values and vision of the company further ahead by strengthening its relationship with its customers. Benefits:

An effective customer focused Decision support system can provide the following benefits to Regional Variations: 1. It helps a company deliver better customer service and improve its goodwill in the market 2. It will provide the company to gain a competitive edge over other cafes in the region 3. It provides better understanding of targeting direct marketing activity as well as market buying behavior. (Payne, A. , 2006) 4. It will enable the company to personalize and customize its relationship in each of the area that its outlets are in a different manner according to their social demographics

5. As the case mentions, the food industry has a high employee turnover; the CRM system will help the company maintain its relationships with customers irrespective of which employee is servicing them. 6. Using CRM, a repository can be maintained on customer profiles, thereby treating each client as an individual and not as a group. This way, every employee can be better informed about each customer’s specific needs and transaction profile. (Gollan, C. , 2006) 7. The cafe can easily adjust the level of service to reflect the customer’s importance or status 8.

The Decision support system provides advanced user interface whereby users can interact directly with the data. (Payne, A. , 2006) 9. An effective CRM will build customer loyalty, decrease customer anxiety and help the company in getting continuous feedback from the customers which provides continuous improvement. (Reynolds, J. , 2002) 10. Using CRM data, marketing campaigns can be coordinated more effectively by ensuring that promotions target the new or potential customers rather than existing ones. (Gollan, C. , 2006) 11. Online Analytical Processing can help identify marketing and sales opportunities in the market. (Payne, A. , 2006) 12.

CRM systems facilitate cross-selling which refers to offering customers complimentary products based on their previous purchases and up-selling which refers to offering customers premium products in the same category. (Gollan, C. , 2006) 13. If a CRM system is well integrated at all levels of the organization to its customer base, it can increase the productivity of an organization by 20%. (Reynolds, J. , 2002) Introducing Decision Support System: In the first phase of the project, i. e. assignment 1, Elegant cafe has a similar type of business as this case study and therefore the two businesses can be compared in ways CRM can be implemented.

We had introduced a decision support system in assignment one whereby we had information regarding demographics about few of the cities in South East of England. The company has several months of information on the Cost of Goods sold and the Operating expenses of the company. The data in the decision support system can be further used in the following ways which will benefit various operations and functions of the company: 1. The system will enable the company to decide where the outlets can be opened in the future since the company is looking forward to opening outlets at various other locations based on a higher younger population

2. The system will help the company in making up its income statements and calculate net profit from the available information. 3. The information can help in forecasting the future earnings of the company and cash flow requirements. Similarly, Regional Variations can use the data in many different areas of the organization: 1. The data about customers can be used to analyze the future demand and changing customer tastes and preferences 2. The customers can be notified about new product developments 3. The customers can be informed about different promotions of the company

4. It can be used to forecast the future performance of the company 5. Demographics can be used to estimate the future target market and demand patterns 6. It can help the company identify which areas it can expand its operations in Challenges and Problems: An effective DSS system requires more than just buying and setting up the system. Rather it requires full integration of marketing, promotion, sales and service to the corporation. (SAP white paper, 2003) The critical issues that Francois Brocoli, owner of Regional Variations, will face are: 1.

The cafe will require extra employees and well trained personnel to perform extensive manual work to load and maintain the system. This will involve an opportunity cost since the key personnel and resources could be used elsewhere too 2. Moreover, using the analytical tools of a DSS directly on the existing operating system limits the scope of analysis by making it difficult to link data on different operational systems. (Payne, A. , 2006) 3. If Francois Brocoli hires business analysts to establish or set up the system, they will leave once they finish.

However a successful system will require their continuous participation in implementation and deployment of the system. (Dyche, J. , 2002) 4. Sometimes, a cafe like Regional Variations which is a mid-sized company can put constraints on its funds by purchasing this system since the cost of renewing and maintaining a system may be high. (Janakiraman, J. & Gopal, R. K. , 2006) Real Life Cases: Changing technology is enforcing a lot of pressures on companies to meet the customer needs and acquire a bigger market share than their competitors.

An industry where the decision support system, of a similar kind as in the case, is used is the banking industry. Banks are constantly seeking updated solutions in order to better enhance ways of improving customer relationships. A large portion of their budgets are going in implementation and application for marketing decision support. Banks have been able to capture the market by adapting adequate strategies and making use of their CRM systems. Royal Bank of Scotland, when launching their supplementary credit cards, used its database of customers and asked their opinions about the product before its launch.

Banks are using new channels to stay in touch with customers. They offer their services to customer segment through the use of most appropriate channel like branch, ATM, email, Telephone etc. (Rajola, F. , 2003) Internal CRM: As mentioned earlier, effective CRM needs to be integrated at all the levels in an organization. Since the cafe in the case faces issues in maintaining its staff, if not currently but it is a threat for the future, it is important to have an internal CRM in order to keep the employees of the cafe involved so that they do not feel disillusioned.

Internal CRM or iCRM needs to start with a basic understanding of the customer. It is important for Francois Brocoli to link its staff with its CRM system which should help the staff to understand that there are common segments of customers that reach across traditional organizational boundaries. The actions and behaviors along with needs and attitudes of the staff will result in better service and in a business like cafe, service and positive attitude of the staff are main success factors (Nykamp, M. & McEachern, C. , 2001).

Francois Brocoli should invest in education training and motivation of the staff to enhance their human skills which is very vital in maintaining its customers. Conclusion: An efficient DSS will result in enhancing the productivity of Regional Variations and will help achieve its targets. However the company should try to tackle its problems and challenges the new system will present and handle the internal CRM of the cafe simultaneously. It is important that DSS in linked to all levels of the organization and data used is of good quality in order to achieve good quality decisions and results.

Bibliography: Payne, A. , 2006, Handbook of CRM: achieving excellence in customer management, Pages 237 – 238: Butterworth-Heinemann, Oxford University Press Greenberg, P. , 2004, CRM at the speed of light: essential customer strategies for the 21st century, Pages 10-12, 3rd Ed: McGraw Hill Companies Gartner, Inc. 2009, What’s ‘Hot’ in CRM Applications in 2009 Reynolds, J. , 2002, A practical guide to CRM: building more profitable customer relationships: CMP books Gollan, C. , 2006, Advantages of CRM, EzineArticles. com <http://ezinearticles. com/?

Advantages-¬of-¬CRM&id=244781>. SAP white paper (2003) CRM Without Compromise Dyche, J. , 2002, The CRM handbook: a business guide to customer relationship management, Pages 269 – 270: Addison Wesley Janakiraman, J. & Gopal, R. K. , 2006, Total Quality Management Text And Cases, Page 213, 3rd Ed: CRC Press Rajola, F. , 2003, Customer relationship management: organizational and technological perspectives Pages 17 – 18: Springer-Verlag Berlin Nykamp, M. & McEachern, C. , 2001, Internal CRM is Gaining Momentum, Customer Relationship Report in Information Management Magazine

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