Loyalty, customer relationship management

CRM Customer Relationship Management. CRM aligns business processes with customer strategies to build customer loyalty and increase profits over time. (Quoted from Rigby, Darrell K., Reichheld, Frederick F., and Schefter, Phil, Avoid the four perils of CRM, Harvard Business Review, Febmary 2002, pp. 101-109 ) Computer applications that deal with the front-office interface between the company and its customers. 

Customer relationship management (CRM) software now exists to capture data to improve overall supply chain perfonnance (also see Chapter 9). The objective of CRM is to develop a customer-centred organization that ensures every opportunity is taken to delight the customers, foster customer loyalty, and build long-term relationships that are mutually beneficial. The ultimate gain is to ensure that each customer s current and future wants and needs are satisfied. 

Third, simple approaches constrain the relationship to be the same for all contexts. Jones and Sasser (1995) find that the customer satisfaction-customer loyalty relationship varies by industry, possibly because of differences in competitive environment. Bowman and Narayandas (2001, 2004) find that customer-specific factors such as the competitive context at a given customer account can occasion differential responsiveness. Accounting for heterogeneity in customer relationships and customer response to a vendor s strategies and tactics is a key theme of much recent research in management science. 

CRM software can be used to capture and monitor individual customer data from - for example - loyalty cards to enhance demand management (section 6.1.1). The next case study. Batman, illustrates the evolution of diamond-type relationships in an industrial setting. 

---