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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Use of CRM Technology in a Business:

Kadison Sayer/245275

Madonna University


When technology entered the business world customers were no longer people, they simply became an account number.  Marketing was not individualized, and mass production allowed for higher product availability, but unique relationships with customers were hurt because of it.  The competitiveness in a business market is very high and organizations are constantly trying to gain the upper hand, customer relationship management (CRM) offered the opportunity to do that.  CRM is a business strategy in which technology is used to gain knowledge about customer's habits, information, trends and much more.  The goal of CRM is to manage customers by focusing on retention and the development of relationships.  Companies began working to re-establish the relationships with customers and started connecting different information systems to create a database that stored information about customers in one easy to access place (Chen & Popvich, 2013).  The CRM software allows businesses to no longer look at their customers as an account number, but to associate that number with their specific information.  Once the data is collected on specific customers, they can then be segmented and targeted based on common trends, habits, and interests.  CRM can also offer perks to the customer such as simplicity, customization, and convenience.   A business that can successfully implement CRM technology will receive benefits including, higher profits, satisfied customers, increased competitiveness, and customer loyalty (Bhat & Darzi, 2016).


CRM Implementation

CRM is not a simple program that can be run and all of the sudden a business will have information on its customers.  In order to implement CRM, it must involve the combination of three things, people, processes and technology (Chen & Popvich, 2013).  Employees must be trained properly on how to use constantly changing technology and be willing to adapt.  Customers also fall into the category of people, without customers there is no need for the CRM.

The next element involved in implementing CRM is processes.  The business market is highly competitive causing it to always adapt and change, part of the change is how business is conducted.  With the Internet and E-commerce came ease of entry into multiple business sectors, and higher product availability.  Processes changed, and product customization became highly sought after by consumers.  Due to consumer mindset changes came the need for advertising adaptation, which sparked the use of analytics, data mining and other technological tools that are mentioned in the "technological factors" section below (Bhat & Darzi, 2016).

Successful customer relationship management involves linking the customer's contact points with all of the business systems.  These systems include both the front and back office functions such as, sales, customer service, human resources, financial, and other systems.  The customer's contact points with a business is all of the areas that they have access to any portion of the business.  A few examples of customer's contact points are email, Internet, brick and mortar stores, and even advertising (Chen & Popvich, 2013).

Technological Factors

Customer relationship management would not be successful without the use of technological innovations and the Internet.  According to Chen and Popvich (2013):

"CRM applications take full advantage of technology innovations with their ability to collect and analyze data on customer patterns, interpret customer behavior, develop predictive models, respond with timely and effective customized communications, and deliver product and service value to individual customers".

These technological innovations have created a lot of information and data, but raw data alone cannot help a business gain profits or become successful.  Data warehouses are locations in which all database and operational systems are combined to put all of the raw data in one place. CRM would not be possible if data warehouses did not offer a spot to centralize data.  

Data mining has to be talked about when on the topic of technological factors of CRM Chen et al. (2015) described data mining as "discovering novel, interesting, and potentially useful patterns from large data sets and applying algorithms to the extraction of hidden information" (p. 14).  Once this raw data is put into patterns, analytics can be used to segment customers into groups where they will then be targeted based on specific interests, trends, and even social media habits.  In the eyes of a business this promotes a competitive approach to acquire and retain customers by providing more relatable and accurate advertising. If the advertisements are going to people who have been segmented and targeted for specific reasons the chances that the marketing will peak their interest is much higher.  Targeted advertising will allow businesses to spend less money on marketing while being more efficient than they would be if just using mass advertising without the use of data mining and analytics (Chen et al., 2015).

With so many different types of technological factors and the constantly evolving software involved in CRM it is hard for businesses to stay on top of each aspect.  CRM has become so critical that there are now customer relationship management companies that founded their entire business on CRM software.  These companies offer software packages for different sized businesses and have adapted the software for varying needs throughout the business setting.

CRM Effectiveness

CRM can be a large investment for a business, software, employee training, technology upgrades, and technical support are all costs that a business must be willing to pay when implementing CRM.  The goal of any business is to generate profits, a common way to do this is return on investment (ROI).  Even though CRM is a large investment if implemented successfully the ROI will be well worth it.  Effectiveness is the most important aspect of every business decision, if a plan is not going to be efficient there is no reason to spend time, money, or resources on it.  Navimipour and Soltani (2016) ran an analysis on what makes electronic customer relationship management (E-CRM) efficient and found that "cost, technology acceptance, and employee satisfaction all play important roles towards the effectiveness of E-CRM" (p.388-410).

E-CRM comes with a large up-front cost, the software will need to be bought, and once it is bought technical support will also need to be purchased.  Employees have to learn the new technology that is being brought in, and that involves a training fee up front.  E-learning systems have been put in place for most technological advancements and could possibly be provided if purchasing software from a customer-relationship management company.  Cost can also be viewed as a positive when looking at the effectiveness of CRM technology.  If the system is efficient it will be able to lower marketing costs, as retaining customers is cheaper than getting new customers (Navimipour & Soltani, 2016).

Technology acceptance is the next key to CRM effectiveness, a business that has objections or disagreements while implementing a change will promote a culture that will be inefficient.  Having CRM software only works if everyone in the organization is willing to put the customer first.  "Investing in CRM technology without a customer oriented cultural mindset is like throwing money into a black hole" (Chen & Popvich, 2013).  Ease of use is essential in acceptance of new software in the workplace, if the software is easy to use employees are more likely to get behind the idea of using CRM and there will be high employee satisfaction (Navimipour & Soltani, 2016).


Doing business in such a technologically driven time period involves staying ahead of the competition and constantly adapting new software and technological processes.  With so many businesses and such high buyer power, it is imperative to effectively acquire customers, and even more important to retain them.  The best way to build and retain a customer base is with CRM. Through the use of data warehouses, data-mining and analytics, customer relationship management can be achieved.  CRM is beneficial on both sides of every business relationship. The business is able to earn higher profits, gain loyal customers, and create customer satisfaction.  The customer also benefits from CRM, customer empowerment can be achieved through, customization, simplicity, and convenience.  As a business it is crucial to understand every aspect of CRM before implementing it, being the large investment that it is, smooth implementation is key.  With a customer-oriented culture and an efficient CRM process in place, any business, regardless of size, will see benefits including, higher profits, satisfied customers, increased competitiveness, and customer loyalty.  

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