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Literature Review

What is Strategy?

Strategy was originally a military term describing a plan of action to achieve an objective, for
example, win a battle. The strategy plan laid out what actions and tactics were needed to
defeat the enemy. The same applies to business strategy, it’s about planning a course of action
to realize our goals and objectives.

CRM Strategy:

“A CRM strategy must look holistically are the business processes and systems
that deal with customers, including marketing, sales, ordering, customer
care, technical support and business intelligence/customer analytics,” warns
Yossi Zohar, head of product and partner marketing, customer management
division at

Customer relationship management (CRM) is a strategy to learn more about

customers' needs and behaviors to develop stronger relationships with them.
It needs to be aligned with the company’s vision and goals, putting the customer at the
forefront of consideration. Consequently, the organization needs to ready itself to
adopt this customer-centric approach.

CRM strategy needs to be embedded into the company culture and recognized across the
whole organization, with an outside-in methodology.

CRM Strategy Development:

This involves development of CRM strategic options for achieving established CRM
objectives for every targeted segment, thereafter the best option shall be adopted as the CRM
strategy and the right measures for performance shall be established.
Strategy Development Process:

Why CRM?

In the commercial world the importance of retaining existing customers and expanding
business is paramount. The costs associated with finding new customers mean that every
existing customer could be important. The more opportunities that a customer has to conduct
business with your company the better, and one way of achieving this is by opening up
channels such as direct sales, online sales, franchises, use of agents, etc. However, the more
channels you have, the greater the need to manage your interaction with your customer base.

behaviour of their customers and modify their business operations to ensure that customers
of its customers and to capitalize on improved customer relations. The better you understand
your customers, the more responsive you can be to their needs.

CRM can be achieved by:

 finding out about your customers' purchasing habits, opinions and preferences
 profiling individuals and groups to market more effectively and increase sales
 changing the way, you operate to improve customer service and marketing

Benefiting from CRM is not just a question of buying the right software. You must also adapt
your business to the needs of your customers.

Business benefits of CRM:

Implementing a customer relationship management (CRM) solution might involve


which can lead to:

 increased sales through better timing due to anticipating needs based on historic
 identifying needs more effectively by understanding specific customer requirements
 cross-selling of other products by highlighting and suggesting alternatives or
 identifying which of your customers are profitable and which are not


 effective targeted marketing communications aimed specifically at customer needs

 a more personal approach and the development of new or improved products and
services in order to win more business in the future

Ultimately this could lead to:

 enhanced customer satisfaction and retention, ensuring that your good reputation in
the marketplace continues to grow
 increased value from your existing customers and reduced cost associated with
supporting and servicing them, increasing your overall efficiency and reducing total
cost of sales


and ensure that everyone in an organization can exploit this information.

Types of CRM solution:


using technology to improve CRM makes good business sense.

CRM solutions fall into the following four broad categories.

Outsourced solutions:

you are already geared towards online e-commerce.

Off-the-shelf solutions:

Several software companies offer CRM applications that integrate with existing packages.
without compromising too much.
Custom software:


and costs will vary depending on what your software designer quotes.

Managed solutions:

may mean that you have to compromise in terms of functionality.

How to implement CRM:



Stage 1 - Collecting information:

categories their behaviour. Those businesses with a website and online customer service have

Stage 2 - Storing information:

database - a centralized customer database that will allow you to run all your systems from

Stage 3 - Accessing information:

available to staff in the most useful format.

Stage 4 - Analyzing customer behaviour:

Using data mining tools in spreadsheet programs, which analyze data to identify patterns or

Stage 5 - Marketing more effectively:

their profits. Using CRM to gain a better understanding of your customers' needs, desires and

Stage 6 - Enhancing the customer experience


Potential drawbacks of CRM:

solution might not have the desired results.

There could be a lack of commitment from people within the company to the
implementation of a CRM solution. Adapting to a customer-focused approach may require a
cultural change. There is a danger that relationships with customers will break down
operations from the customers' perspective. The result is customer dissatisfaction and
eventual loss of revenue.

Poor communication can prevent buy-in. In order to make CRM work, all the relevant
people in your business must know what information you need and how to use it.

Weak leadership could cause problems for any CRM implementation plan. The onus is on
management to lead by example and push for a customer focus on every project. If a
proposed plan isn't right for your customers, don't do it. Send your teams back to the drawing
board to come up with a solution that will work.

Trying to implement CRM as a complete solution in one go is a tempting but risky strategy.
It is better to break your CRM project down into manageable pieces by setting up pilot
programs and short-term milestones. Consider starting with a pilot project that incorporates
all the necessary departments and groups but is small and flexible enough to allow
adjustments along the way.

Don't underestimate how much data you will require, and make sure that you can expand
your systems if necessary. You need to carefully consider what data is collected and stored to
ensure that only useful data is kept.

Avoid adopting rigid rules which cannot be changed. Rules should be flexible to allow the
needs of individual customers to be met.