Ecrm Strategy

INTRODUCTION

Consumers and customers are incharge! To gain competitive advantage over a company's competitors, it must form and maintain mutually beneficial relationships with its customers. It is easier than ever for a customer to click on a competitor's website and start purchasing their products or services i.e. to shop comparatively. For many corporations, customer relations have become a crucial and most valued resource. Creating a customer centric firm begins with a customer relationship management (eCRM) strategy, whereby a firm reengineers to change its organizational vision and culture. The ultimate objective is to reduce customer acquisition costs and increasing customer retention rates, thereby transforming customer relations into greater profits. Ecrm enables marketers to understand customer behaviour even though the buying process and transactions are not carried out face-to face but via the online phenomenon and help them focus on those customers who can stay loyal and derive long- term profits. Traditional meanings of value, service and competition have all changed after the digital transformation which has brought a rapid and vast reconfiguration and restructuring of today's ways of carrying out business-the streamlining of products, interaction and payment from consumers to companies and from companies to it supplier is creating much consternation and bewilderment among corporate owners and business decision makers. This drastic change has been brought about by the development of the internet. Many businesses have broadened the horizons by reaching out globally by being able to implement an internet based information system. Furthermore, the adoption of the internet and its technologies has transformed the way many businesses develop and execute their strategies, models and core competencies. E-business is the technologically driven strategy and process of interweaving business initiatives and drivers with front and back office applications to form an all-encompassing data information management system and processing. This has a significant effect on profitability and sustainability (Patel 2000). Speed of service, personalization, convenience and price are all values affected by e-business adaptations. Currently, there has been a shift from customer acquisition to customer retention for marketers. (Reicheld 1999)-studies have shown a dramatic increase in profits from small increase in customer retention rates, a 5% increase in retention had impacts as high as 95% on the net present value delivered by customers. Other studies have shown that repeat customers generate more than twice as much gross income as than newly-acquired customers-(McKinney, 2001). Innovation in CRM-related products and technological improvements has made it much simpler to deliver greater profitability from reduced customer 'churn. When customers interact the old way

* It costs 6 times more to sell to a new customer than to sell to an existing one.

* Lack of customer service will probably cause a disgruntled customer to tell of his or her adverse experience to other people, (badmouthing).

* 75%of complaining customers will do a repeat business if complaints are quickly addressed or resolved.

* 80%of sales are received from 20% of the company's customer base. (Kalakota and Robinson, 2000).

The essence of the information technology revolution is the opportunity to build better relationships by establishing, nurturing and sustaining long-term customer relationships by combining the abilities to respond directly to customer requests and to provide customers with a highly interactive and customized experience. It is all about creating value for customer, with effective management through the use of automated systems such as CRM. CRM is a strategic process and 'infrastructure