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382 Part Three Key System Applications for the Digital Age

FIGURE 9.6 CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

CRM systems examine customers from a multifaceted perspective. These systems use a set of
integrated applications to address all aspects of the customer relationship, including customer service,
sales, and marketing.

single enterprise view of customers that is useful for improving both sales and
customer service (see Figure 9.6.)
Good CRM systems provide data and analytical tools for answering questions
such as these: What is the value of a particular customer to the firm over his or
her lifetime? Who are our most loyal customers? It can cost six times more to
sell to a new customer than to an existing customer. Who are our most profitable
customers? What do these profitable customers want to buy? Firms use the
answers to these questions to acquire new customers, provide better service
and support to existing customers, customize their offerings more precisely to
customer preferences, and provide ongoing value to retain profitable customers.

CUSTOMER RELATIONSHIP MANAGEMENT SOFTWARE

Commercial CRM software packages range from niche tools that perform
limited functions, such as personalizing Web sites for specific custom-
ers, to large-scale enterprise applications that capture myriad interactions
with customers, analyze them with sophisticated reporting tools, and link to
other major enterprise applications, such as supply chain management and
enterprise systems. The more comprehensive CRM packages contain modules
for partner relationship management (PRM) and employee relationship
management (ERM).
PRM uses many of the same data, tools, and systems as customer relation-
ship management to enhance collaboration between a company and its selling
partners. If a company does not sell directly to customers but rather works
through distributors or retailers, PRM helps these channels sell to customers
directly. It provides a company and its selling partners with the ability to trade
information and distribute leads and data about customers, integrating lead
generation, pricing, promotions, order configurations, and availability. It also

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