CUSTOMER RELATIONSHIP MANAGEMENT (CRM) ON CUSTOMER’S LOYALTY

CUSTOMER RELATIONSHIP MANAGEMENT (CRM) ON CUSTOMER’S LOYALTY

Background Of The Study

Organisations have a greater ability today to establish, nurture, and sustain long-term customer relationships than ever before, with the abilities to respond directly to customer requests and to provide the customer with a highly interactive and customized experience. The ultimate goal is to transform these relationships into greater profitability by increasing repeat purchase rates and reducing customer acquisition costs. Each organization is subject to marketing elements which influences the company’s function and performance as a whole. Accordingly, such elements are the one’s attributed in determining whether the company has met their organizational objective and if they are able to satisfy their clients (Oliver, 1997). There are a lot of marketing strategies. Some companies have transactional relationships with consumers: they focus on one-time purchases, do not maintain connections with their customers and try to achieve a large stream of consumers. Other companies claim that the quality of relationships between buyers and sellers is much more important in comparison to pure quantity of contacts. This strategic direction refers to the concept of Customer Relationship Management (CRM).

Customer relationship management (CRM) is a leading new approach to business, which has already become established in the literature (Szeinbach, Barnes, & Garner, 1997). Indeed, CRM refers to all business activities directed towards initiating, establishing, maintaining, and developing successful long-term relational exchanges (Heide, 1994; Reinartz & Kumar, 2003). One of the results of CRM is the promotion of customer loyalty (Evans & Laskin, 1994), which is considered to be a relational phenomenon (Macintosh & Lockshin, 1997). The benefits of customer loyalty to a provider of either services or products are numerous, and thus organizations are eager to secure as significant a loyal customer base as possible (Reinartz & Kumar, 2003).  

Furthermore, CRM is basically an integrated approach to managing relationships by focusing on customer retention and relationship development” (Chen & Popovich 2003, p.672). As a business strategy it started to appear in 1999. CRM stresses the importance of long-lasting relationships with customers and enhancing their loyalty and commitment to a company. It proposes various retention strategies and recommendations for creating customer loyalty. In the light of the above, this study seek to examine the impact of customer relationship management (CRM) on customer’s  loyalty.

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