Customer Relationship Management (CRM) and Corporate Renaissance
* "Industrial production of India rose by a mere 1.6% in the first six months of 2001-2 over the previous year.....Indian exports fell by 2.3% in the first five months of the current financial year...Gross domestic product (GDP) hovers around 6% in the first six month of the current financial year thanks to higher contributions from the service sector...The growth projections are not sustainable in the nearer frame of time.... Bank borrowings of the Indian companies plummeted 40% to Rs.20, 894 crores in the first six months of the current financial year".
(Source: Business at War, India Today, November 19, 2001 pp. 68-73.)
* In the cellular business, it costs five times more to acquire a customer. It is the same in every business. Retaining this customer is the critical first step for success'.
(Harsh Goenka, Chairman, RPG Enterprises, Kolkata, India)
Indian business is in full gloom as these quick statistics show. In line with the unmistakable signs of a global recession, more pronounced after the tragic events of September the Eleventh in USA, Indian corporates as a whole, stand numb at the plummeting profits, spiraling customer expectations and a long struggle to stay afloat (Business India, 2001). The search is on for a winning formula, a quick pull back and for a continued relevance (India Today, November 2001).
In simple words, the business in India and indeed in South Asia is on the look out for a corporate renaissance. For some, the search ends on such traditional tips as cost reduction, re-engineering, market expansion and productivity improvement. The others are experimenting with such new remedies as customer orientation, customer service & care, quick product launches and niche development. In this burgeoning crowd of corporate mourners, there are several braves and visionaries too (Aditya Birla group, RPG and Netcraft for instance). They have tuned-in to an altogether new way of doing business and effecting corporate renaissance-customer relationship management (CRM for short) (Business World, November 2001).
The paper aims therefore, to describe briefly the concept of customer relations management, the ingredients of a CRM and the myths surrounding it. It hopes to stimulate a serious discussion on how CRM can be effectively used for a corporate renaissance in South Asia, which is reeling under a business downturn. Finally, it recommends that the CRM should be aggressively incorporated in the business education curricula so that the business schools of this part of the world continue to be the source of intellectual output and corporate training.
CRM: A CONCEPT IN THE MAKING
Customer Relationship Management sounds simple enough. However, the term succeeds only in whetting imagination of academics as well as business leaders (Anton, 1999; Baron, 1997; Bell, 1996).
CRM can be viewed in four principal ways. Firstly, it is a contemporary response to the emerging climate of unprecedented customer churn, waning brand loyalty and lower profitability (Cockburn, 2000; Cross, Richard & Smith, 1996). Secondly, CRM is central to the task of making an organization customer-centric (DM Association, 1999; Gamble, Stone & Woodcock, 2000). Thirdly, CRM is the surest symbol embracing information technology in business (Brown & Price Waterhouse Coopers, 1999; Gordon, 1998). Fourth and finally, CRM is the most certain way to increase value to the customers and profitability to the practicing organizations (Reichheld, 1996, Shanham 1998-1999). Be that as it may, effective CRM practices can mean the difference between the success and failure of a business across all industries, particularly for mid-size enterprises (Curry, 2000; Eckerson, 1997), Naturally, more and more companies are seeking to understand the concept and mechanics of the CRM (Swift, 2001).
So what is customer relationship management (CRM) all about? …