For those who don't know, Customer Relationship Management (CRM) is a relatively new marketing strategy which places an emphasis on customer knowledge and retention in order to meet and anticipate customer needs. This is typically done through customer engagement and the subsequent use of databases to track and organize customers. Don Peppers and Martha Rogers are well known thinkers in this area of business. While CRM may be newer to the marketing game than older strategies, it has certainly bloomed into a diverse and valued area of marketing--though it is not without its critics.
After reading an article on CRM, Exploring the Role of Customer Relationship Management Systems in Customer Knowledge Creation by Farnoosh Khodakarami and Yolande Chan, I began to wonder how and why CRM methodology has become so divisive. According to Khodakarami and Chan, the key to CRM is knowledge creation, this knowledge is pivotal in giving companies insight into what customers need. To summarize their findings, the authors believe that there are multiple aspects of the CRM process which require delicate care and attention to detail--namely, the socialization, externalization, combination, and internalization of knowledge within a company. Accordingly, it would seem that to neglect any one of these categories presents difficulties for a fluid, effective CRM strategy. Now we begin to see why CRM is a particularly hot topic among marketers: a lot has to go right in order for it to work. If any one of these small details is neglected, a CRM program will not be as effective as perhaps more traditional methods. It is for this reason why companies and marketers are divided on the effectiveness of CRM.
Overall, CRM strategy is not some 'plug-and-play' marketing strategy that magically produces positive results. The spirit of CRM is to capture data and understand the customer, but if customers are not truly understood, disaster could ensue. Certainly, no matter how good a service or product is, ANY marketing solution that does not fit the customer will fall on deaf ears. Even worse, the result could be committing the grave sin of selling items customers do not actually need, only to then realize that they have a negative image of your brand--or what we might call post-purchase dissonance. Similarly, if CRM is crippled by a lack of knowledge, the same could just as easily happen. I think the key to any marketing strategy, not just CRM, is to know not only your customers, but your company as well. Knowing what your company is capable of and how it communicates and relates to its customers is of first importance. This way, you know exactly what strategies to use or test rather than blindly engaging in 'popular' or 'controversial' methods. So when considering if CRM is right for your company, you have to first know how and why you would use and apply it. If it fits use it, if not, don't.
Feel free to comment your thoughts, agree, disagree, or criticize! Read my more extensive analysis of the article mentioned above at: https://bit.ly/2O1eIEl or visit my portfolio: http://www.soohooportfolio.com/read-me/
References:
Exploring the Role of Customer Relationship Management Systems in Customer Knowledge Creation - Farnoosh Khodakarami, Yolande Chan
Managing Customer Relationships: A Strategic Framework - Don Peppers, Martha Rogers
Customer Relationship Management - Wikipedia
A Review of Customer Relationship Management’s Role in Knowledge Creation - W. Ethan Soo Hoo