Traditionally, Customer Relationship Management (CRM) is seen largely as a sales and marketing tool, though it does have functions in other operational aspects. Indeed, CRM describes the way organizations handle interactions and relationships with either existing customers and potential ones. Therefore, it is understandable that such a perception exists. However, there exists some degree of sophistication about CRM that goes beyond sales and marketing. For example, CRM has at least 3 different forms, each trying to offer businesses an easy and personalized view of their customers.
With technological innovations taking center stage, it is no surprise that the technological version of the CRM is the most popular. This technology enabled form tracks and analyses interactions for the businesses that have them ( Baran & Galka, 2016) . Other forms here include CRM as a strategy and as a process. The former describes the management thinking of an organization towards its customers, both current and potential while the latter describes the system that such a business would develop to create and maintain such relationships.
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In any of its forms, CRM provides the platform for businesses to create deeper relationships with its customers. Here, the meaning applied to the term customer is one that focuses on the archetypal end-user type but also includes employees, partners, and suppliers. Because CRM allows companies the tools to establish and monitor relationships, it has become an essential customer acquisition and retention tool itself ( Buttle & Maklan, 2015) . Furthermore, it provides organizations with: improved productivity and sales forecasting; improved levels of service; better accuracy of sales reports: better responses from marketing activities and increased customer loyalty ( Baran et.al 2016) . Therefore, this has become an important management aspect across modern organizations.
An importance that is highlighted by the comparing interaction between companies and companies before CRM and the current world. Before the advent of this form of management, business was largely about mass production and mass consumption. However, changes in information technology and education have changed the dynamics. Specifically, hyper competition makes customer loyalty a prized asset among organizations, and through CRM, such companies seek to anticipate and meet customer needs, thereby creating or preserving said loyalty. In other words, businesses collect information on personal preferences, purchase histories and personal information with the aim of improving customer satisfaction and loyalty (Kumar & Reinartz, 2018). In the previous business world, organizations rarely targeted consumers at the individual level nor did they make available the same amount of resources to understanding and meeting the customers needs. The prevalence of CRM is a result of the failure of the old system of doing business while the developments that follow are the reactions of the business world to the new way of doing business.
Kumar & Reinartz, (2018) note that building meaningful relationships with customers is good for business in the modern day because it creates, in such customers, the right amount of loyalty. It is this loyalty that companies operating in the current commercial space seek because loyalty equals retention. Since both loyalty and revenues affect the bottom line, CRM is a management strategy aimed at increasing business profits. Moreover, retaining customers is more cost-effective than acquiring new ones. According to Baran & Galka (2016) customer satisfaction is key to the sustainability of any enterprise.
Basically, CRM is a tool for data collection and communication with customers. Notably, it is this tools ability to help businesses recognize and communicate with its customers in a scalable manner that makes it stand out. Furthermore, the implementation of any CRM solution takes several forms. Examples here include: social media; websites; telephone calls; mails; emails and traditional marketing avenues ( Buttle et.al 2015) . Because it is positioned as the basis for a scalable sales and marketing system, the diverse nature of this interface means that it is useful to both big and small businesses alike. Notably, companies of all sizes stand to benefit from keeping a record of the conversations, marketing materials and consumption patterns that can be associated with existing and potential customers.
Clearly, the main goals of any CRM are the identification and retention of loyal customers and the acquisition of customers with similar traits as a business strategy. Therefore, it is important to understand some of the ways organizations achieve this strategic objective. CRMs functions as a learning tool, allowing businesses to identify who their customers are ( Baran et.al 2016) . Furthermore, it allows companies to understand why their customers buy and use their products by analyzing their purchasing histories. Here, the strategic aim of revenue and loyalty, is attained by anticipating and fulfilling customer needs. Notably, this is possible only with well-organized customer data.
Businesses using CRM become more efficient because of the organizing and automation functions. In its technological form, this form of management automates aspects of sales processes and marketing campaigns (Kumar et.al 2018). This allows the business to generate customer data that is easy to understand and have simpler processes. Similarly, CRM enables for the optimization of customer interactions, this it achieves through streamlining and simplification of complex processes. Notably, this aspect of the CRM increases customer satisfaction.
It is in the technological form that the CRM is most visible and significant due to the scale and variation of ability available here. While there are different CRM types, all primarily serve at least 3 basic functions, which are: operational, collaborative, and analytical. The operational CRM, as the name suggests is applied to marketing, sales, and service operations. This type is vital for lead generation because it handles such aspects of customer data like service satisfaction, marketing campaigns and purchases (Kumar et.al 2018). Here, automation of these processes is vital not only for increased customer satisfaction but also for the businesses. Notably, businesses having shorter sales cycles and high repeat sales stand to benefit from the efficiency gains of an operational CRM.
A collaborative CRM is relevant only among companies sharing customer data with outside companies. Concerns on customer privacy aside, businesses that do share such resources seek to create better experiences for their customers. It seems that sometimes at least, the best way to do this is to share customer information because it enables such companies access to data that do not have ( Buttle et.al 2015) . Evidently, customer information sharing is a necessity for companies in markets where product development and innovation are necessary for commercial success. This is because it is necessary for such companies to intimately understand what consumers are responding to currently and sharing customer data creates additional insights.
An analytical CRM enables management to better understand market trends as well as customer wants and needs. From its name, it is obvious that it does this by evaluating customer information and in the context of improving customer satisfaction ( Baran et.al 2016) . It achieves its goals through data mining and pattern recognition and is suitable for markets having both high prices and competition.
At this point, clearly CRM can be an excellent strategic tool, particularly due to its ability to increase customer loyalty, efficiency, and revenues. Furthermore, almost any type and size of business can benefit from having such a tool as it has numerous strategies and applications. Critically, it is important for companies to consider their data realities of their operational processes prior to making CRM purchases. Critically, as a philosophy and system for recording information on customer interactions, any CRM system is only as valuable as the quality of information an organization feeds it (Kumar et.al 2018).
It is evident that the success of any CRM system is solely dependent on the quality of information it uses. Ideally, CRM is used by businesses to create better customer satisfaction by anticipating their customers needs. Practically, this requires commercial entities to collect personal information, personal preferences, and purchase histories. Inevitably, this has raised concerns about customer privacy and the inconsistent use of CRMs.
Before the growth in popularity and acceptance of CRM, there was gross informational asymmetry between buyers and sellers. Put differently, businesses had more information than consumers. The confluence of advances in information technology and the fact that customer retention is vital to sustainability of businesses has served to continue this asymmetry (Nguyen ,2012). In what seems to be a misconception of the CRM concept, the use of spyware by firms to monitor consumer interaction has created a distrust for online shopping while increasing the desire for greater consumer privacy. Ironically, it is the advances in information technology that have handed this advantage to such firms.
The increasing complexity of the CRM applications means that firms have increased their data collection abilities, the outcome is that they now have more power than their consumers. Nguyen (2012) observes that once customers sense that they are disadvantaged, they may resort to intentionally withholding or distorting their information. Basically, in such dynamics, the risk is the collapse of the information sharing relationship between firms and their customers is very high. Notably, loss of privacy and trust can generate a negative reputation online especially now that customers have unprecedented access to digital platforms and word of mouth (Nguyen ,2012). Therefore, any CRM related decisions must be made in the context of preserving trust and privacy first.
It is a strategic necessity for businesses to treat customers differently while using their CRMs. Nguyen (2012) on the other hand notes that the notion that someone else is getting a better deal on the same offering can raise eyebrows and evoke dissatisfaction. Still, CRM applications are meant to target different customers and try their different needs with different price points for similar offers. Through word of mouth, these customers can interact and discover differences in the deals they and others received, increasing the likelihood of feeling mistreated for not having the same deal. Evidently, careful consideration is necessary to avoid permanent market failure given CRMs differential nature. Furthermore, consumers have norms have standards for what they consider as either fair or unfair in the context of differential treatment (Nguyen, 2012). Here, firms must address such norms as well as manage perceptions of trust and fairness for a sustainable information sharing and value creating relationship with customers.
Looking forward, the growing importance of the operational aspects of the CRM is set to continue, creating the need for an integrated approach to marketing, sales, and service. Indeed, ongoing technological advances means that, potentially, customers will have better control of their personal information. Technologies such as Artificial Intelligence (AI) and robotic process automation in CRM information will improve the quality of services offered to customers (Kumar et.al 2018). Ideally, a proper application of CRM should enable a firm to communicate the difference in doing business with it and another firm. This is true now and remains to be so in the future too.
Therefore, it seems that firms will continue to rely on technological advancements to refine their CRM implementation. In that sense, this application looks set to remain a tool for establishing competitive advantage and achieving strategic objectives. Critically, the need for establishing and preserving consumer trust; privacy; a sense of fairness in terms of differential treatment and security of consumer information will increase to safeguard against possible exploitation by firms.
References
Baran, R., & Galka, R. (2016). Customer Relationship Management: The Foundation of Contemporary Marketing Strategy . Oxfordshire, United Kingdom: Taylor & Francis.
Buttle, F & Maklan, S. (2015). Customer Relationship Management: Concepts and Technologies. Boston, Massachusetts: Routledge.
Kumar, V., & Reinartz, W. J. (2018). Customer relationship management: Concept, strategy, and tools . Berlin, Germany: Springer.
Nguyen, B (2012). The dark side of customer relationship management: Exploring the underlying reasons for pitfalls, exploitation, and unfairness. Journal of Database Marketing & Customer Strategy Management, vol. 19, 1.
