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Chapter 12 • Customer Relationship Management 335

Build Brand Loyalty
Growth

Personalized
Marketing, Sales
Automation, Personalized
Customer Service

Process Efficiency,
Holistic View of
Customer Relationship
Value

Capture Data for
Analysis, Cost Control,
Track Preferences

FIGURE 12-1 Evolution of CRM Programs

Enabled by new technologies that collected consumer data, companies progressed to
focused segment marketing. Such tools as preference and satisfaction surveys, demographic
collection, focus group data, and point-of-sales collection technology gave industry a better
glimpse at why a customer purchased certain services and goods, along with the relative satisfac-
tion level or impression he or she had with a company or brand. This turned the tide in marketing,
manufacturing, operations, and customer service as all industries relied upon customers to
dictate the product and not internal forces. By using technology to analyze consumer data,
companies have found that incremental sales to loyal, repeat customers (i.e., existing customers)
is much more profitable than acquiring new customers. This shifted the emphasis on maximizing
the customer’s experience with the brand and spawned the customer relationship discipline that
gave way to CRM software.
The expectations of a CRM system have evolved over time. Organizations first imple-
mented CRM to capture customer data for analysis to find out what aspects of their goods and
services are important to their clients. A customer file is started from an initial point of
marketing contact, whether it originated with a phone call inquiry to customer service before
a sale, a purchased lead generation list service, a request for literature, an organized event, or
a completed warranty or registration form. The software can track all aspects of sales from
lead source tracking to meetings with a sales representative, thereby automating the sales
process. After a sale, such customer service and support activity as complaint resolution or
satisfaction feedback is captured. Each point of contact with an individual customer can be
recorded as they conduct business with a company. This allows development of a business
process across marketing, sales, and customer service. One limitation of this first-generation
CRM was that this information did not filter to the management level. There was no corpo-
rate-wide sharing of customer experiences and adjustments of corporate strategy or tactic
based on the CRM knowledge.