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The impact of CRM in Customer Relationships

Written by A. Artman, A. Brunnberg & J. Westerlund

Paper category

Bachelor Thesis


Business Administration>Marketing & Sales




Thesis: CRM system The CRM system was created to store customer information and can help continuously improve customer relationships (Ku 2010). The CRM system was created to simplify the dissemination of customer information through the company (Chang et al. 2010). The systems that this subtitle will examine are CRM software and CRM performance (same as above). 2.1.1 When software CRM was first recognized, companies used it as an IT system to automate customer processes (Motiwalla and Thompson 2009). Later, another point of view of the customer appeared. It started as a system for capturing data for analysis, cost control, and tracking preferences, but later evolved into a tool to improve process efficiency and an overall view of customer relationship value (ibid.). The company has made a radical change in how it handles customers. The progress continues further, and the focus is shifted to personalized marketing, sales automation, and personalized customer service (ibid.). CRM is usually associated with IT marketing methods, but it can be much more difficult to succeed in customer relationships (Chen et al., 2009). It consists of a database that helps salespeople update customer needs in order to maintain a good relationship with customers (Hendricks et al., 2007). The purpose of CRM is to identify potential customers, collect relevant information about them, and try to improve partnerships and long-term relationships. Understanding the customer’s business makes it easier to communicate and discover their needs. Providing products suitable for customers is an important tool in CRM, which can further understand customers and create value for your customers (Valentim et al., 2011). CRM continuously collects and updates a large amount of information in order to effectively communicate with customers and provide solutions (Shah and Murtaza 2005). 2.1.2 Performance In today's current B2B market, companies usually use a system to handle customers (CRM) (Chang et al., 2010). The system allows development and effective customer management. It is important that the organization knows how to use the system to take advantage of performance (ibid.). To investigate CRM performance has become an important part of the company, and to be able to do so, the company must understand which factors are important in the CRM strategy, and their relationship with factors that directly affect the relationship with customers (Jin and Gold 2009). To measure CRM and performance, the focus is not only on the direct link between CRM and performance, but also to understand and investigate how different mechanisms and situations affect the success of the company's CRM (Reimann et al., 2010). The company has long used some kind of relationship management. The difference between CRM and other business systems is that CRM can add potential technologies and establish one-to-one relationships with a large number of customers (Payne and Frow 2006). 2.2 Relationship companies sometimes invest large amounts of money to establish, maintain, and strengthen relationships with customers in order to obtain positive financial results (Mende et al., 2013). It is important for salespeople to build positive relationships with customers, because sustainable relationships have a positive impact on financial results (Friend et al., 2011). Technology is an integral part of CRM. It makes it possible to collect, disseminate and use information throughout the organization. However, in CRM, building and improving customer relationships is a more critical factor than technology and information dissemination (Minami and Dawson 2008). Relationship marketing is considered to be one of the key development areas of modern marketing and has aroused great research interest in recent years (Sheth and Parvatiyar 2000). The origin of relationship marketing can be traced back to earlier times, and it played a role in the development of marketing theory. Relationship marketing cannot be applied to only one department in the organization. It must be supported by other departments and business functions in order to be effective and successful. Today, this is not easy to achieve (Grönroos 1994). Relationship marketing should attract, maintain and strengthen customer relationships (Berry 1995). CRM may be seen as an effective way to expand and maintain profitable customers by trying to maintain good relationships with them (Payne and Frow 2006). Grönroos and Helle (2012) went further. They believed that the focus should shift from mutual value exchange to a process of co-creating value and win-win. Relationship marketing is about how organizations manage their relationships and work with customers to achieve long-term profitability. On the other hand, customer relationship management is more about how to use information technology in the implementation of relationship marketing strategies. Relationship marketing focuses on relationships with multiple stakeholders, and customer relationship management is the most important one (Ryals and Payne 2001). A key part not to be missed when implementing a CRM strategy is employees. It is wise for companies to invest in the education of employees on how to use the system because they are the part that determines the success of the system and should not be underestimated (Chalmeta 2006). When employees are satisfied with the company's system, they will produce positive results at work. However, if employees are not satisfied, it will have a negative impact on the entire company (Po-An Hsieh et al. 2012). The CRM system helps employees and sellers obtain relevant information about customers to meet their expectations (Po-An Hsieh et al., 2012). The important thing is good communication between employees and customers. Read Less