What is the Impact of CRM on Organizational Performance?



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Mary Grace Mabunga, Student (MBA), London
What is the impact of CRM on organisational performance?
What are the bases of measurement and what other factors can be considered. Thank you.

 
  Impact of CRM on Organizational Performance
Sapna, India
CRM enhances the organizational performance in the following ways:
1. Enhancing the corporate stature of the organization
2. Increasing sales and profit of the organization
3. Enhancing customer satisfaction
4. Enhancing the life time value of the customer with the organization
5. Retaining old customers and acquiring new customers
6. Reaching new markets segments
To measure the impact of CRM on organisational performance the
- Customer satisfaction,
- Financial performance of the organization after implementation
- Effectiveness of the customer solution
- Increased life time value with organization, etc
are some bases to measure it.
Other factores in addition to these factors are the Return on Investment you're making on your investment in CRM and CRM information tecnology.
 
  Impact of CRM on an Organisation
Zwane, South Africa
By building the relationship with your customers and by understanding your customers from personal level upwards your organisation will be able to meet specific needs of your customers. Also it will make your customers feel valuable, thereby they might develop a longer lasting relationship with your organisation.
CRM will also enable your organisation to focus on an identified market through niche marketing, based on the data collected during surveys and customer inter-activities.
 
  Impact of CRM on an Organisation
Cockburn, UK
Yes, but remember it's not only the system: surely you also need employees who use the system as a tool to deliver and market exceptional service.
Isn't there also a cultural element to its success?
 
  What Makes CRM a Success
Mary Grace Mabunga, UK
@Cockburn: Understanding what really CRM is about contributes to its overall success in an organisation.
Researchers found out in their interviews that executives view CRM as direct mail, call center or help desk, e-commerce solution, data mining, data warehouse but CRM is more than all of the above.
How the organisation views CRM, affects its implementation success!
 
  How Top Executives See CRM
Jaap de Jonge, Netherlands
@Mary Grace Mabunga: good point. Probably CRM will have the biggest impact if it is viewed in the strategic visionary sense, like: how will customers and their demands change in the future? And, as an organization, how should we relate to those new customers and new demands? And do we plan to achieve a competitive advantage using this kind of strategic CRM?
 
  CRM as a Strategy
Mary Grace Mabunga, UK
@Jaap de Jonge (Editor): Companies implement various strategies and policies. CRM is one of those strategies as executives and managers realise that the key to success is building strong customer relationship. CRM focus is on relationship management alone (Ryals & Payne, 2001) and so it’s good to know who are you building relationship with? CRM strategy begins with the business and marketing vision; vision is important in developing CRM strategy for which the technology is an important tool.
CRM as a strategy identify customer value and depending on that value invests resources to build relationship. To manage this relationship with the customer, the technology vital role is to generate loyalty, future for the brand and customer sales. CRM strategy then helps the organisation to be innovative and create new things thus be able to offer new product and services.
 
  CRM Impact on Organisational Performance
Mary Grace Mabunga, UK
According to the literature, CRM effects organisational performance in the same way as employees effect customer satisfaction. As one marketing executive said, “building the organization to develop and execute their ideas is the real showstopper” (Brady, 2002, p.2.)
Among the four integrated CRM elements shown below, the first three elements are sustained by the organization to deliver its purpose. Some researchers pointed out that the key component of CRM success is the alignment of strategy, technology and organisation. The organisation is repeatedly identified as a key driver which supports the establishment of successful CRM (Roberts, 2005).

Figure: The Integrated Elements of CRM Programs, Brady et al., 2002, p.2

In view of this argument, the beginning of CRM as a strategy is to know and to be able to identify profitable and valuable customers, the capabilities to provide added value to the customers and the technology that manages these processes. It depends on the organisation that delivers and sustains it.
EFFECT OF CUSTOMER RELATIONSHIP MANAGEMENT ON ORGANISATIONAL PERFORMANCE
CRM has improved customer service, product quality, customer value and business profitability as in the case of Domino’s Pizza a successful brand name around the world and currently a leading pizza delivery company in UK and Ireland.
KEY DRIVERS OF CRM ON ORGANISATIONAL PERFORMANCE
The key drivers of CRM on organisational performance were trained employees, customer service and care line centres and the most influencing element is the “vision” of the organisation that clearly communicates idea about relationship management.
Sources:
Brady, M., Saren, M., & Tzokas, N. 2002. Integrating information technology into marketing practice–the IT reality of contemporary marketing practice.
Roberts, M., Liu, R., & Hazard, K. (2005) Strategy, technology and organisational alignment: Key components of CRM success.
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