CUSTOMER RELATIONSHIP MANAGEMENT

Customer Relationship Management

Customer Relationship Management

Executive Summary

Business today has evolved to become more customer oriented. Companies are shifting towards the customer segment focusing on customer relationship management, customer lifetime value and customer retention. General Electric (GE), a diversified company and already so successful in the old economy, was not spare from the shift either. Its former CEO, Jack Welch, executed a series of changes in the company to prepare GE for the shift towards customer focus.( Cacace, 2003 12)

Once there, it concentrated on Customer Relationship Management (CRM) to improve Customer Lifetime Value and Customer Retention. This is done by continuously delighting customers to achieve customer satisfaction. With that comes customer loyalty and ultimately a successful company. CRM has both positive and negative strategic implications on GE. With CRM GE's has achieved employee satisfaction, quality, good positioning, customer satisfaction / loyalty and improved performance / productivity. It has also increased profit, shareholders' wealth, market value as well as voter the most admired company. Despite GE's achievements there are also setbacks such as company downsizing, retrenchment, staff resignation, high CRM systems cost, intruding customers privacy and loss of customer through segmentation. Companies could learn from the GE's example (known as the GE Way) on how to execute the shift towards the customer segment and implement the CRM systems smoothly and successfully. CRM helps companies manage customers effectively bringing success along the way, if implemented correctly(Carpenter, 2001, 124).

Introduction

Up till the early 1980s "customers are seen as average statistic, passive buyers with a predetermined role of consumption. Market research and inquiries had very limited or no interaction with the customers. It is mostly a one way communication in the old economy. As the business competition gets tougher in the 1990s, Kotler admitted the economy has shifted into a customer economy where companies became customer owning focus because customers are now more knowledgeable and in short supply. Even General Electric, already so successful in the old economy, has not been spared of the shift. And, there is no better way to illustrate this fact than to follow the dramatic revolution that has taken place in General Electric or GE in short. Jack Welch, former CEO of GE, once said, "If you are not thinking customer you are not thinking. He transformed GE's focus towards the customers through several changes over the years. Customer Relation Management systems were set up to manage valuable information about customers so that Customer Lifetime Value and Customer Retention can be enhanced(Cacace, 2003, 32).

Due to a period of recession Canon faced a difficulty with the sale of copy machines, cameras, computers etc. The company could not increase its sales and other needed help. The main cause was a comprehensive customer database. It cannot be shown to sales personnel, management etc. Moreover, the company could not transfer the complete data of individual sales to overall sales. The important customer information was overlooked and badly managed.

As the company face with those problems, the company had to find ways to solve ...