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name of the term: CRM (Customer Relationship Management)
descriptions of the term:

CRM (Customer Relationship Management)

Whilst over the last century, sales and marketing were strongly influenced by the transactional idea; the 90’s established an increasing evolution in marketing, leading to a modern marketing understanding. The creation of consumer relationships consequently shifted into focus. This development went hand in hand with changes in sales markets, which, at the time, were characterized more by „distributing“ rather than by actually selling and resulted in today’s – sometimes extreme – buyer’s markets with an increasing adjustment of product advantages („Commodization“). This resulted in the need for a stronger analysis of market relationships and a methodical management of relationships to current and potential customers. In turn, this insight led to an increased awareness towards the scope of duties of Customer Relationship Management, both in B2B and B2C relationships. Mistakenly, the subject of CRM is often still substantially reduced to IT-supported systems for the management of customer information and is on a par with other customer retention instruments such as club cards. However, over the last years, practice has established a comprehensive holistic understanding of CRM. It is here that IT merely takes on an – albeit important - supporting role.
By respecting the principles of a value-based corporate management, CRM concepts place thinking in long-term business relationships in the focus of market-based corporate management. In this sense, the CRM objective goes beyond the boundaries of the sales department and integrates all processes to and from a customer with the aim of accomplishing a balance between customer- and cost orientation.

In practice, the frequently arising impression of restricting CRM to an IT system is associated with several CRM software providers “jumping on the CRM bandwagon” and often wrongly equating the implementation of CRM software with the implementation of a CRM concept. Associated with these communication errors, many disappointments are the outcome when implementing a CRM concept, since the desired market-sided effects are not justified, despite a frequently cost-intensive CRM IT system. On the other hand, many CRM success stories really do exist. After a phase of unjustified euphoria regarding the performance capability of IT-based CRM systems around the turn of the century, the currently prevailing practice opinion now indicates realistic market expectations. In the meantime, especially HR and cultural components of CRM implementations are being taken into account more often. Due to the full consideration of expanding and maintaining existing customer relationships on the one hand and the acquisition of new customers on the other, the CRM approach is seen as a very appropriate measure to contribute to the integration success, also in the PMI phase.

Type of term: definition
Language of the term (2 char ISO code): en
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