Customer Relationship Management Assignment

Customer Relationship Management Assignment


1.1 CRM and Customer life time value

The most important endeavour of the customer relationship management is to address the requirements to address the needs of the consumers by proposing them best available blend for their requirements. The main motive of CRM is to rise ahead of the transactional altercation course and to understand the consumer needs properly in depth with a view to pleasing them. Customer relationship management is not cramped only to single time deal but to capitalize on the inclusive consumer durational value.

Customer Relationship Management Assignment

With world changing every new day, the strategies pertaining to business are also bound to change. The new-fangled marketing strategy proposes that if consumer has not represented the prosperity for the marketer from the few transactions; it should not be the ending point for the marketers. He should try and persuade the customer in such a way which establishes the best relationship and hence the overall value perceived from the customers would be way higher than the value perceived and created from altogether a new customer (Berry & Leonard, 1983). Nevertheless, this is how we may say that the customer retention is the first and foremost task undertaken by any CRM program.

To find out customers long-term value, we may define it as the net value of cost and benefit derived out of the product.  Marketers incur the following costs:

  • Cost of gaining customer
  • Servicing cost to customer
  • Retention cost

Whilst the settlement gained in form of the customer is the total cash flow of his overall transactions. Companies have broaden their definition of profitability and for that matter, companies total ups the per customer gain to each consumer net gain received. Thus, for any company, the profitability is through the life-time customer retention. Firms practice this by maximizing CLV. The sales managers of the company try to enlarge long term relation by an effective CRM (Reichheld and Sasser, 1990). CRM is the lifelong customer retention exercise.[ Also Read: Business Information Analysis Assignment]

1.2 Transactional to relationship sales strategy     

The most business dilemma that is faced is by the people actually working on the front level. These people are mainly Sales manager and sales staff. They face the biggest challenges while applying the decided strategy by the board room people. They are forced to change their approach from short term relations to log-term customer care approach. For that matter, following are a few suggestive steps::

  1. To be better acquainted with the clients: The transactional sales strategy is designed for one time selling instead of repeat selling there by knowing the customers better. (Carrol and Reichheld, 1992). The relationship sales strategy is defined by broader view, thereby understanding the needs of the customers to serve them better, every time.
  2. More informative consumer profile to gain wider consumer base: In Relationship sales strategy, sales manager fosters the association which serves for long term client base with deeper understanding (Kotler et al, 1999).
  3. To be familiar with company’s upcoming strategy: Any important decisions should be well communicated to the sales personnel so that they can achieve the end means of the customers as well as of the organization.
  4. Satisfied customers are the best investment propositions: This ensures the repeat customers and customer retention rate remains higher.

To adopt relationship sales strategy asks for a greater change in the sales managers who have been following the traditional transactional sales strategies. The Precincts while altering the prevailing strategic practices are:

  1. The field people that are the sales people are required to know the ever changing market trends in order to change the practices they have been following of the transactional sales strategy. The different marketing framework that are imperative to know for the sales managers are:
  • market condition
  • pace of change
  • Global nature of the market
  1. Moreover, just altering the sales people behaviour is not enough for longterm impact. Company needs to readdress their focal point from the quarterly profit to the long term sustainable relationship with the clients. In the orthodox business practices, the sales strategy is of one time transaction based strategy (Buchanan and Gilles, 1990). While altering the strategy, sales managers are required to relocate their concentration from short term to long term which ensures a long term profitability.
  2. Customer significance in purchasing: It is very much imperative for the sales manager to comprehend what is the precise valuable benefit customer derived during the purchase. Sales managers also need to understand if the clients feel any value addition while offered relationship sales strategy.

Below is the example of the customer care service:

  1. Consider an example of Hyundai. The company is into car selling. They believe, the transactional cost of new customer is eight time higher than serving the same old consumers. They try their best to please the consumers for the repeat purchases by giving door step services to their customers.
  2. Another popular example is of air flight retailers. They offer exclusive prices for round trip, popularly known as two way journey. Instead of fetching two different mass of customers, these people believe that the one who flies with them is cheaper to serve the next time.[ Read about UAE Corporate Governance Policies Assignment]


  • Berry, Leonard, 1983, Relationship Marketing. American Marketing Association, Chicago. p. 146.
  • Kotler, Philip, Armstrong, Gary, Saunders, John and Wong, Veronica., 1999, p482
  • Reichheld, F. and Sasser, W., 1990, "Zero defects: quality comes to services", Harvard Business Review, Sept-Oct, 1990, pp 105-111
  • Carrol, P. and Reichheld, F., 1992, "The fallacy of customer retention", Journal of Retail Banking, vol 13, no 4, 1992
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