Abstract

CRM is short for customer relationship management. The ideas behind customer relationship
management are by no means new. Today it’s widely acknowledged that how you understand and treat
your customers, goes a long way to determining your future success and profitability, and companies
are making bigger and bigger investments to do just that.

The concepts of customer relationship management have been in the air ever since people started
exchanging things, but CRM as a term came into existence in the mid-1990s.

Companies are already pouring billions of dollars into CRM solutions—software and services designed to
help businesses more effectively, manage customer relationships through any direct or indirect channel
a customer might use. That's why, the market for CRM technology is exploding.

CHAPTER ONE

1. Introduntion

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Customer relationship management (CRM) is a process in which a business or other organization
administers its interactions with customers, typically using data analysis to study large amounts of
information.

CRM systems compile data from a range of different communication channels, including a company's
website, telephone, email, live chat, marketing materials and more recently, social media. They allow
businesses to learn more about their target audiences and how to best cater for their needs, thus
retaining customers and driving sales growth.CRM may be used with past, present or potential
customers. The concepts, procedures, and rules that a corporation follows when communicating with its
consumers are referred to as CRM. This complete connection covers direct contact with customers, such
as sales and service-related operations, forecasting, and the analysis of consumer patterns and
behaviors.

1.1. Background of CRM

The concept of customer relationship management started in the early 1970s, when customer
satisfaction was evaluated using annual surveys or by front-line asking. At that time, businesses had to
rely on standalone mainframe systems to automate sales, but the extent of technology allowed them to
categorize customers in spreadsheets and lists. One of the best-known precursors of the modern-day
CRM is the Farley File. Developed by Franklin Roosevelt’s campaign manager, James Farley, the Farley
File was a comprehensive set of records detailing political and personal facts on people FDR and Farley
met or were supposed to meet. Using it, people that FDR met were impressed by his "recall" of facts
about their family and what they were doing professionally and politically. In 1982, Kate and Robert D.
Kirshenbaum introduced the concept of database marketing, namely applying statistical methods to
analyze and gather customer data. By 1986, Pat Sullivan and Mike Mahoney released a customer
evaluation system called ACT. Based on the principle of digital Rolodex, which offered a contact
management service for the first time.

The trend was followed by numerous companies and independent developers trying to maximize lead
potential, including Tom Siebel of Siebel Systems, who designed the first CRM product, Siebel Customer
Relationship Management, in 1993.In order to compete with these new and quickly growing stand-alone
CRM solutions, the established enterprise resource planning (ERP) software companies like Oracle, SAP,
PeopleSoft (an Oracle subsidiary as of 2005) and Navision started extending their sales, distribution and
customer service capabilities with embedded CRM modules. This included embedding sales force
automation or extended customer service (e.g. inquiry, activity management) as CRM features in their
ERP.

Customer relationship management was popularized in 1997, due to the work of Siebel, Gartner, and
IBM. Between 1997 and 2000, leading CRM products were enriched with shipping and marketing
capabilities. Siebel introduced the first mobile CRM app called Siebel Sales Handheld in 1999. The idea of
a stand-alone, cloud-hosted customer base was soon adopted by other leading providers at the time,
including PeopleSoft (acquired by Oracle), Oracle, SAP and Salesforce.com.

The first open-source CRM system was developed by Sugar CRM in 2004. During this period, CRM was
rapidly migrating to the cloud, as a result of which it became accessible to sole entrepreneurs and small

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teams. This increase in accessibility generated a huge wave of price reduction. Around 2009, developers
began considering the options to profit from social media's momentum and designed tools to help
companies become accessible on all users' favorite networks. Many startups at that time benefited from
this trend to provide exclusively social CRM solutions, including Base and Nutshell. The same year,
Gartner organized and held the first Customer Relationship Management Summit, and summarized the
features systems should offer to be classified as CRM solutions. In 2013 and 2014, most of the popular
CRM products were linked to business intelligence systems and communication software to improve
corporate communication and end-users' experience. The leading trend is to replace standardized CRM
solutions with industry-specific ones, or to make them customizable enough to meet the needs of every
business. In November 2016, Forrester released a report where it "identified the nine most significant
CRM suites from eight prominent vendors".

1.2. Statement of the problem

Customer Relationship Management (CRM) software should satisfy clients from the first online or onsite
visit to delivery, to sales, to after sales service, to making them a loyal customer.

1.3. Objective of the CRM

1.3.1. GeneralObjective of the CRM

The fundamental purpose of a CRM system is to improve the customer experience.

1.3.2.Spesific objective of CRM

-Improve the buyer’s journey

-To improve operational efficiency

-To increase customer retention

-Lower your customer acquisition cost

-Generate more sales

1.4. Significance of CRM

CRM helps business build a relationship with their customers that in turn, creates loyalty and customer
retention. Since customer loyalty and revenue are both qualities that affect a company’s revenue, CRM
is a management strategy that results in increased profits for a business.

1.5. Scope of the CRM

CRM, or customer relationship management, is concerned with the development and maintenance of
mutually beneficial relationships with strategically significant partners. Its focus is the creation of long-
term value, and not just short-term profits, for the company and all it works with. The scope of CRM can
thus be defined according to its constituencies, how long-term value can be created for and with them
and the benefits of doing so.

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1.6. Limitation of CRM

A lack of commitment or resistance to cultural change from people within the company can cause
major difficulties with the CRM implementation. Customer relationships may break down and result in
loss of revenue, unless everyone in the business is committed to viewing their operations from the
customers' perspective.

CHAPTER TWO

LITERATURE REVIEW

2.1. Definition of CRM

Customer relationship management (CRM) describes all aspects of sales, marketing and services- related
interaction that a company has with its customers or potential customers., both business to
customer(B2C) and Business to Business(B2B) companies often use CRM software to track and manage
communication through the
web,email,,telephone,mobileapplication,chat,socialmedia,andcorporate,marketing materials.

2.2. Typesof Customer relationship management (CRM)

2.2.1. Strategic

Strategic CRM concentrates upon the development of a customer-centric business culture.

The focus of a business on being customer-centric (in design and implementation of their CRM strategy)
will translate into an improved CLV.

2.2.2. Operational CRM

The primary goal of CRM systems is integration and automation of sales, marketing, and customer
support. Therefore, these systems typically have a dashboard that gives an overall view of the three
functions on a single customer view, a single page for each customer that a company may have. The
dashboard may provide client information, past sales, previous marketing efforts, and more,
summarizing all of the relationships between the customer and the firm.

Operational CRM is made up of 3 main components: sales force automation, marketing automation, and
service automation.

Sales force automation works with all stages in the sales cycle, from initially entering contact
information to converting a prospective client into an actual client.It implements sales promotion
analysis, automates the tracking of a client's account history for repeated sales or future sales and
coordinates sales, marketing, efforts call centers, and retail outlets. It prevents duplicate between a
salesperson and a customer and also automatically tracks all contacts and follow-ups between both
parties.

Marketing automation focuses on easing the overall marketing process to make it more effective and
efficient. CRM tools with marketing automation capabilities can automate repeated tasks, for example,
sending out automated marketing emails at certain times to customers, or posting marketing
information on social media. The goal with marketing automation is to turn a sales lead into a full
customer. CRM systems today also work on customer engagement through social media.Service

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automation is the part of the CRM system that focuses on direct customer service technology. Through
service automation, customers are supported through multiple channels such as phone, email,
knowledge bases, ticketing portals, FAQs, and more.

2.2.3. Analytical CRM

The role of analytical CRM systems is to analyze customer data collected through multiple sources and
present it so that business managers can make more informed decisions.Analytical CRM systems use
techniques such as data mining, correlation, and pattern recognition to analyze the customer data.
These analytics help improve customer service by finding small problems which can be solved, perhaps
by marketing to different parts of a consumer audience differently.For example, through the analysis of
a customer base's buying behavior, a company might see that this customer base has not been buying a
lot of products recently. After scanning through this data, the company might think to market to this
subset of consumers differently, to best communicate how this company's products might benefit this
group specifically.

2.2.4. Collaborative CRM

The third primary aim of CRM systems is to incorporate external stakeholders such as suppliers, vendors,
and distributors, and share customer information across groups/departments and organizations. For
example, feedback can be collected from technical support calls, which could help provide direction for
marketing products and services to that particular customer in the future.

2.2.5. Customer data platform

A customer data platform (CDP) is a computer system used by marketing departments that assembles
data about individual people from various sources into one database, with which other software
systems can interact. As of February 2017 there were about twenty companies selling such systems and
revenue for them was around US$300 million.

2.3. Components CRM

The main components of CRM are building and managing customer relationships through marketing,
observing relationships as they mature through distinct phases, managing these relationships at each
stage and recognizing that the distribution of the value of a relationship to the firm is not homogeneous.
When building and managing customer relationships through marketing, firms might benefit from using
a variety of tools to help organizational design,incentiveComponents

Components in the different types of CRM

2.3.1.schemes, customer structures, and more to optimize the reach of their marketing campaigns.
Through the acknowledgment of the distinct phases of CRM, businesses will be able to benefit from
seeing the interaction of multiple relationships as connected transactions. The final factor of CRM
highlights the importance of CRM through accounting for the profitability of customer relationships.
Through studying the particular spending habits of customers, a firm may be able to dedicate different
resources and amounts of attention to different types of consumers.

2.3.2.Relational Intelligence, which is the awareness of the variety of relationships a customer can have
with a firm and the ability of the firm to reinforce or change those connections, is an important

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component to the main phases of CRM. Companies may be good at capturing demographic data, such
as gender, age, income, and education, and connecting them with purchasing information to categorize
customers into profitability tiers, but this is only a firm's industrial view of customer relationships.

A lack in relational intelligence is a sign that firms still see customers as resources that can be used for
up-sell or cross-sell opportunities, rather than people looking for interesting and personalized
interactions.

CRM systems include:

Data warehouse technology, used to aggregate transaction information, to merge the information with
CRM products, and to provide key performance indicators. Opportunity management which helps the
company to manage unpredictable growth and demand, and implement a good forecasting model to
integrate sales history with sales projections.

CRM systems that track and measure marketing campaigns over multiple networks, tracking customer
analysis by customer clicks and sales. Some CRM software is available as a software as a service (SaaS),
delivered via the internet and accessed via a web browser instead of being installed on a local computer.
Businesses using the software do not purchase it, but typically pay a recurring subscription fee to the
software vendor.

For small businesses a CRM system may consist of a contact management system that integrates emails,
documents, jobs, faxes, and scheduling for individualaccounts. CRM systems available for specific
markets (legal, finance) frequently focus on event management and relationship tracking as opposed to
financial return on investment (ROI). CRM systems for eCommerce, focused on marketing automation
tasks, like cart rescue, re-engage users with email, personalization. Customer-centric relationship
management (CCRM) is a nascent sub-discipline that focuses on customer preferences instead of
customer leverage. CCRM aims to add value by engaging customers in individual, interactive
relationships.Systems for non-profit and membership-based organizations help track constituents,
fundraising, sponsors' demographics, membership levels, membership directories, volunteering and
communication with individuals. CRM not only indicates to technology and strategy but also indicates to
an integrated approach which includes employees knowledge, organizational culture to embrace the
CRM philosophy.

2.4.Effect on customer satisfaction

Customer satisfaction has important implications for the economic performance of firms because it has
the ability to increase customer loyalty and usage behavior and reduce customer complaints and the
likelihood of customer defection.The implementation of a CRM approach is likely to affect customer
satisfaction and customer knowledge for a variety of different reasons.

The Firms can customize their offerings for each customer.By accumulating information across
customer interactions and processing this information to discover hidden patterns, CRM applications
help firms customize their offerings to suit the individual tastes of their customers.This customization
enhances the perceived quality of products and services from a customer's viewpoint, and because the
perceived quality is a determinant of customer satisfaction, it follows that CRM applications indirectly
affect customer satisfaction. CRM applications also enable firms to provide timely, accurate processing
of customer orders and requests and the ongoing management of customer accounts.For example,

6
Piccoli and Applegate discuss how Wyndham uses IT tools to deliver a consistent service experience
across its various properties to a customer. Both an improved ability to customize and reduced
variability of the consumption experience,enhance perceived quality, which in turn positively affects
customer satisfaction.Furthermore, CRM applications also help firms manage customer relationships
more effectively across the stages of relationship initiation, maintenance, and termination.

2.5.Customer benefits

With Customer relationship management systems, customers are served better on the day-to-day
process. With more reliable information, their demand for selfservice from companies will decrease. If
there is less need to interact with the company for different problems, customer satisfaction level
increases.These central benefits of CRM will be connected hypothetically to the three kinds of equity
that are relationship, value, and brand, and in the end to customer equity. Eight benefits were
recognized to provide value drivers.

1. Enhanced ability to target profitable customers.

2.Integrated assistance across channels.

3. Enhanced sales force efficiency and effectiveness.

4. Improved pricing.

5. Customized products and services.

6. Improved customer service efficiency and effectiveness.

7. Individualized marketing messages are also called campaigns.

8. Connect customers and all channels on a single platform. In 2012, after reviewing the previous
studies, someone selected some of those benefits which are more significant in customer satisfaction
and summarized them into the following cases:

1. Improve customer services: In general, customers would have some questions, concerns, or requests.
CRM services provide the ability to a company for producing, allocating, and managing requests or
something made by customers. For example, call centre software, which helps to connect a customer to
the manager or person who can best assist them with their existing problem, is one of the CRM abilities
that can be implemented to increase efficiency.

2. Increased personalized service or one-to-one service: Personalizing customer service or one-to-one

service provides companies to improve understanding and gaining knowledge of the customers and also
to have better knowledge about their customers' preferences, requirements and demands.

3. Responsive to customer's needs: Customers' situations and needs can be understood by the firms
focusing on customer needs and requirements.

4. Customer segmentation: In CRM, segmentation is used to categorize customers, according to some

similarity, such as industry, job or some other characteristics, into similar groups. Although these
characteristics, can be one or more attributes. It can be defined as a subdividing the customers based on
already known good discriminator.

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5. Improve customization of marketing: Meaning of customization of marketing is that the firm or
organization adapt and changes its services or products based on presenting a different and unique
product or service for each customer. To ensure that customer needs and requirements are met
Customization is used by the organization. Companies can put investment in information from
customers and then customize their products or services to maintain customer interests.

6. Multichannel integration: Multichannel integration shows the point of co-creation of customer value
in CRM. On the other hand, a company's skill to perform multichannel integration successfully is heavily
dependent on the organization's ability to get together customer information from all channels and
incorporate it with other related information.

7. Time saving: CRM will let companies interact with customers more frequently, by personalized
message and communication way which can be produced rapidly and matched on a timely basis, and
finally they can better understand their customers and therefore look forward to their needs.[44] .
Improve customer knowledge: Firms can make and improve products and services through the
information from tracking (e.g. via website tracking) customer behaviour to customer tastes and needs.
[45] CRM could contribute to a competitive advantage in improving a firm's ability of customer
information collecting to customize products and services according to customer needs.

Examples

Research has found a 5% increase in customer retention boosts lifetime customer profits by 50% on
average across multiple industries, as well as a boost of up to 90% within specific industries such as
insurance.Companies that have mastered customer relationship strategies have the most successful
CRM programs. For example, MBNA Europe has had a 75% annual profit growth since 1995.The firm
heavily invests in screening potential cardholders.Once proper clients are identified, the firm retains
97% of its profitable customers. They implement CRM by marketing the right products to the right
customers. The firm's customers' card usage is 52% above the industry norm, and the average
expenditure is 30% more per transaction. Also 10% of their account holders ask for more information on
cross-sale products.

2.6.Customer profile
A customer profile is a detailed description of any particular classification of customer which is created
to represent the typical users of a product or service. Customer profiling is a method to understand your
customers in terms of demographics, behaviour and lifestyle. It is used to help make customer-focused
decisions without confusing the scope of the project with personal opinion

Amazon has also seen great success through its customer proposition. The firm implemented personal
greetings, collaborative filtering, and more for the customer. They also used CRM training for the
employees to see up to 80% of customers repeat.

Improving CRM within a firm

Consultants argue that it is important for companies to establish strong CRM systems to improve their
relational intelligence.According to this argument, a company must recognize that people have many
different types of relationships with different brands

Analyzing the information

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Managers must understand the different reasons for the types of relationships, and provide the
customer with what they are looking for. Companies can collect this information by using surveys,
interviews, and more, with current customers. Companies must also improve the relational intelligence
of their CRM systems.

Employee training

Many firms have also implemented training programs to teach employees how to recognize and
effectively create strong customer-brand relationships. For example, Harley Davidson sent its employees
on the road with customers, who were motorcycle enthusiasts, to help solidify relationships. Other
employees have also been trained in social psychology and the social sciences to help bolster strong
customer relationships. Customer service representatives must be educated to value customer
relationships and trained to understand existing customer profiles. Even the finance and legal
departments should understand how to manage and build relationships with customers.

Chapter Three

3.1.Conclusion
customer relationship management is acontributed to the company’s financial, operational, managerial
and development initiatives with a robust customer relationship that has fostered great sale of its
product.

Mercedes Benz operates a similar customer relationship management system just BMW and due to
market power, the company has greatly diversified is customer roots to various market bases,Mercedes
has majored in a customer-dealership business relationship.

This has provided the company with strategic mechanization of customer retention, satisfaction and
purchase behavior enhancing the company’s profitability through an increased purchase command.The
two companies are among the leading CRM implementers in the automotive15 industries and
established to outdo other manufacturing companies due to their high-profile customer base.

From the discussion, you can realize, CRM in the automotive industry is strategically useda model
mechanism for brand promotion and customer attraction. The technology comes with imperative
customer analysis measures using technological systems for business organization, automation, and
synchronization of the business sales, customer services, marketing, and technical support. CRM has
been used to promote local and internal customer interaction elevating the marketing initiative.

Through CRM information, BMW has been able to identify the target customer base and competitive
marketing strategies for customer strengthening and retention.

References

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16.WIKIPEDIA (2014) Market Segmentation [online] Available from
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METTU UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS DEPARTMENT OF

MANAGEMENT MBA PROGRAM

Group Assignment of Customer Relationship Management for Second year first Semister MBA Weekend
Program Bedele

Group members ID.Number

1.NazifAdemLigdi…………………………………………………………WM0044/14

2.

3.

4.

Advisor; Dr.Sekata

BEDELE, ETHIOPIA

July, 2022

12
Table of content Page

Tittle page………………………………………………………………………………….............i

Abstract…………………………………………………………………………………................ii

Chapter one…………………………………………………………………………………........1

1.introduction………………………………………………………………………………….....1

1.1 Background of the study……………………………………………………………………….1

1.2 Statement the Problem…………………………………………………………………………2

1.3.Objective of the CRM…………………………………………………………………................2

1.3.1 General objective of the study………………………………………………………………..2

1.3.2 The specific objectives are……………………………………………………………….......2

1.4.Significance of CRM…………………………………………………………………………...2

1.5.Scope of the CRM……………………………………………………………………………...2

1.6.Limitation of CRM……………………………………………………………………………..3

CHAPTER TWO………………………………………………………………………………...3

2.LITERATURE REVIEW……………………………………………………………………3

2.1 Definition of CRM……………………………………………….......................3

2.2 Types of CRM………………………………………………………….................................3

2.2.1.Strategic………………………………………………………………………………….3
2.2.2.Operational………………………………………………………………………………3
2.2.3.Analytical …………………………………………………………………………………4
2.2.4.Collaborative …………………………………………………………………………….4
2.2.5.Customerdataplatform………………………………………………………………...4
2.3.Components CRM…………………………………………………………………………4
2.4.Effect on customer satisfaction…………………………………………………………6

2.5.Customer benefits…………………………………………………………………………6
2.6.Customer profile……………………....................................................................................8

13
Chapter Three……………………………………………………………………..9

3.1.Conclusion…………………………………………………………………………………..9
References……………………………………………………………………………………10

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