Michael Porter states, "Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value." Customer relationship management (CRM) is a business philosophy that aligns strategy, business culture, customer information and technology in order to manage customer interactions to the mutual benefit of the customer and the enterprise. At its highest use, it is a competitive strategy. The only long- run competitive advantage is the ability to make better customer-facing decisions and make them faster. One day, like operational excellence, rich product features, everyday low prices, high product quality and short time to market, some semblance of CRM will be ubiquitous and expected by our markets. In the meantime, each company now has the opportunity to differentiate itself through CRM while leading companies are defining what the marketplace CRM expectation is going to be.
CRM is a process that leverages customer data, marketing models and life events to improve overall customer satisfaction and gives businesses the ability to perform customer segmentation and treat each customer uniquely. CRM is a reaction to saturated marketplaces. It is also an understanding that it is more expensive to win new customers than to keep existing customers, that new customers come from competitors, that every company is in the "retail" business and that everyone in the company "sells." Companies wishing to survive must understand CRM. CRM is more important as a competitive advantage in some industries where it becomes important to use these strategies to change the perception of the enterprise in the marketplace so it is not seen as a commodity provider.
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