Understanding The Basics Of Customer Relationship Management

Customer Relationship Management


Understanding The Basics Of Customer Relationship Management 







At the end of this article, readers should be able to understand what:

  • Customer Relationship Management (CRM) is,
  • Understand the drivers of CRM
  • Identify the elements of a good CRM strategy,
  •  Know the relationship between technology and CRM.
  •  They should be able to explain the CRM solution map,
  • Define E-CRM, know the differences between CRM and E-CRM.
  • They should be able to highlight some of the challenges of implementing CRM in any organization.


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Definition of CRM

When we talk about CRM, we are talking about how you relate to your customers. We want to look at where your business is focused on. However, before doing that, I would like to look at the subject matter of CRM from the angle of authorities in the field.

Customer Relationship Management

Brent Frei, the president of Onyx software, defined CRM as a comprehensive set of processes with potential and current customers and business partners across marketing, sales and services regardless of the communication channel. The goal of CRM is to optimize customer and partner satisfaction, revenue and business efficiency by building the strongest possible relationship at an organizational level.


From the above definition, we can see that CRM is a deliberate effort by an organisation to manage the relationship between all stakeholders in the organisation in order to increase their value. It is a deliberate attempt at ensuring that customers enjoy maximum satisfaction irrespective of their communication channels. This means that whenever a customer walks into an organisation or calling a customer service centre, he enjoys the same benefits.





Fig 1: Overview of CRM

From the above diagram, you notice that objectives come first, that shows that objective, they will formulate programs of action to achieve the objectives. The organization will communicate the idea to marketing, sales and services organization can now introduce technology in order to make it web-based.


In essence, CRM is the desire of an organisation to do business from a customers perspective. In this regard, all effort should be focused on the customer alone. You should know that this will not happen overnight as it has to be a gradual process before we get to the Zenith of a customer-centric enterprise.


You should know from the onset that CRM is not all about customers alone. It has much to do with all the stakeholders involved in your business. You want to make sure that distributors, partners, employees and all others involved in the business chain work to project the good image of your business.



Mr Winston is an MTN customer. He used to buy cards and lines in bulk from Mr Andrew a dealer. If Mr Andrew did not treat him well as a customer or he had a problem with some of the cards he purchased and Mr Andrew was reluctant in addressing the issue, it can force Mr Winston to stop dealing in MTN cards and sims.

The above scenario simply shows that any incident in the distribution chain can affect the business if it is not properly addressed.


Another Definition

CRM, according to Robert Thompson of crmguru.com is a business strategy to select and manage customers to optimize long term values. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales and service processes. CRM applications can enable effective CRM, provided that an enterprise has the right leadership, strategy and culture.


In applying CRM, you try to select some of your profitable customers and see how you can package products and services in order to meet the needs of your loyal customers. The greatest mistake one can make in life is for one not to be able to identify your loyal customers and how they want to be served. It is unfortunate today that many businesses in Nigeria do not know the total number of their customers and what they actually want. CRM requires a customers centred philosophy in which you try to make all the departments in the organisation most especially marketing, sales and customer service to make customers the centrepiece of their day to day decision.


According to Thompson, CRM needs three basic things in order for it to materialize. These are leadership, strategy and culture. This is to say that before a customer-centric enterprise come into fruition, you have to involve top-level management. You must also have a well-documented plan of action and the organisation must metamorphose from product centred enterprise to customer centred enterprise.


In my own view, I would say that CRM has much to do with the innate desire of an organization to do business from a customer perspective. This is done in order to raise the exit bar for loyal customers and the desire to meet a customer at an organisation to ensure that customers enjoyed the same benefits irrespective of the communication channels they are using to reach the organisation.


Above all, some scholars believe that CRM is a process, strategy and practice but not technology. The reason being that it is not the applications or software that really matters but it is a concise decision from the organisation to do business from a customer perspective through a well laid down strategy.



In this chapter, we have tried to explain what CRM is. It is the desire of an organization to retain its loyal customers and do business from their perceptive. It is said to be a measure put in place by an organization in order to ensure that customers have the same experience irrespective of a communication channel.

CRM is a business strategy to create and sustain long term, profitable customer relationships through successful CRM initiatives. It starts with a business philosophy that aligns company activities around customer need. Only then can CRM technology be used as it should be based-as a critical enabling tool of the processes required in order to turn strategy into business results.



  1. You are a staff in a new generation bank. Your Branch Manager has appointed you and some keys staffs to work out the modalities on how the bank will become customer-centred. In your own view, how can you enlighten your Branch Manager on the need for the bank to become customer-centred?
  2. Critically examine the fig. 1 diagram and use it to explain to your Branch Manager, how CRM works in any organisation.
  3. Using Mr Winston issue as a case study. In your own view, why do you think that MTN as a large organisation needs to monitor the activities of their partners so that they are not misrepresented?



  1. Given the various definitions of CRM
  2. Why do you think metric is necessary for CRM
  3. Explain Robert Thompson definition of CRM.



Action Point

I know you might agree with some of the points that I have raised in this article. You might not agree with some of the issues raised. Let me know your views about the topic discussed. We will appreciate it if you can drop your comment. Thanks in anticipation.



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About Adeniyi Salau 884 Articles
I am an IT enthusiast and a man of many parts. I am a Certified Digital Marketer, Project Manager and a Real Estate Consultant. I love writing because that's what keeps me going. I am running this blog to share what I know with others. I am also a Superlife Stem Cell Distributor. Our Stem Cell Products can cure many ailments.

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