Benefits and challenges of customer relations management

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Management of customer relationships CRM

CRM is a strategy or set of techniques, methods, and technology that businesses use to monitor and manage customer interactions and data across the course of a customer's lifecycle with the aim of enhancing client relationships, promoting client retention, and boosting revenues. For instance, businesses utilize customer loyalty programs to keep customers and to manage and maintain client connections in order to get information about how to enhance company relationships with customers. Customer relations management includes the use of CRM systems that are designed to collect customer’s data/ information using different channels such as company websites, telephone, email, live chat and social media (Chan et al., 27-42). For companies to get loyal customers, they provide loyalty programs which may require the customer to register with the company, like the ‘my choice members’ of the UPS company hence the collection of data for demographics.

Benefits of CRM

CRM innovation enables firms to gather and oversee a lot of client information and after that plan strategies in view of that data.

  • Data gathered through centred CRM activities help firms tackle particular issues all through their client relationship cycle—the chain of exercises from the groundwork of targeting clients to winning them back through a loyalty program.

CRM data also provide companies with important new insights into customers' needs and behaviors, allowing them to tailor products to targeted customer segments (Karjaluoto et al., 584-600).

Information accumulated through CRM programs frequently creates answers for issues outside an organization's advertising capacities, for example, supply network administration and new product improvement.

The CRM technology allows people who could be potential customers to peek into and experience what current customers experience of the company’s services.

CRM gives customers the power to make purchasing and ordering decisions without influence or pressure.

CRM together with the loyalty program enables the company to increase its customer base and keep customers who will keep coming back for services by incorporating a reward system for loyal customers.

Challenges of customer relations management

Companywide cultural shift- CRM is not just a marketing technology for a company’s marketing department. It requires getting all functional parts of the company to change from a product oriented organization to a customer-centered orientation which is a hard thing to do because most employees will be reluctant to change.

Complexity- the CRM technology is not simple, the fact that it is a complex system proves challenging to most companies. It requires extensive training of majority of the employees together with department overhauls and employee role changes.

Cost- gaining and maintaining a customer base is a huge investment especially when you plan on keeping tabs on every customer, listen to their complaints and needs and provide solutions. This requires additional software development, computer hardware and personnel. All these translate into money spent by the company.

Management of CRM- working with and managing CRM means restructuring the work culture of the people working around it. The organization should shift focus to providing customer service by default without forgetting their business needs.

Infrastructure development-CRM is a growing technology with an assortment of software options. The problem comes as a selection headache due to the different needs of different sized companies. Picking the right software solution that fits your specific technology system can be a hard task.

Service performance- no matter how good your products or services are, the success of CRM will rely on the overall experience of the customer and their satisfaction. This includes their perception of the company employees after interaction through CRM. This means the company must invest heavily in training as any loss of focus may lead to disrupted front-end conveyance which can destroy any efforts to exploit CRM opportunities (Yi et al., 53-104).

Slow returns- CRM takes time to develop and mature, most of the customers may not even be aware of the existence of such a program in the company, same goes for the loyalty program. The original large investment may not yield for years on end. This tests the patience of the company and its employees who may start forgetting to implement effectively.


Customer relationship management used to be just the interaction between service or product provider and the customer; it has since developed into an IT software system designed to help manage customer interactions. CRM has been applied successfully in different sectors which saw the need for customer interaction and retention programs as a necessary addition to their companies’ structure due to worldwide changes in customer desires. CRM methodologies have turned out to be progressively critical because if increasing competition, changes in customer expectations and changes in market trends. CRM is based on the belief that it is easier to keep existing customers than to acquire new ones and therefore seeks to give a company insight on the individual needs of a customer. This would, in turn, help net new customers and through the loyalty program keep them in the company for long.

Works Cited

Khodakarami, Farnoosh, and Yolande E. Chan. "Exploring the role of customer relationship management (CRM) systems in customer knowledge creation." Information & Management 51.1 (2014): 27-42.

Saarijärvi, Hannu, Heikki Karjaluoto, and Hannu Kuusela. "Customer relationship management: the evolving role of customer data." Marketing intelligence & planning 31.6 (2013): 584-600.

La, S., and Y. Yi. "A critical review of customer satisfaction, customer loyalty, relationship marketing, and customer relationship management." Journal of Korean Marketing Association 30.1 (2015): 53-104.

February 22, 2023

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