CRM Strategic Orientations
Many businesses claim to be customer-centric, customer-led, customer-focused or customer-oriented, but few are. Indeed, there can be very few companies of any size that do not claim that they are on a mission to satisfy customer requirements profitably.
Strategic CRM is focused upon the development of customer-centric business culture. This culture is dedicated to winning and keeping customers by creating and delivering value better than competitors. In a customer-centric culture you would expect resources to be allocated where they would best enhance customer value, reward systems to promote employee behaviors that enhance customer satisfaction and retention, and customer information to be collected, shared and applied across the business.
Customer-centricity competes with other business logic. Philip Kotler identifies three other major business orientations: product, production, and selling.
Product-oriented businesses believe that customers choose products with the best quality, performance, design or features. These are often highly innovative and entrepreneurial firms. Many new business start-ups are product-oriented. In these firms, it is common for the customer’s voice
to be missing when important marketing, selling or service decisions are made. Little or no customer research is conducted. Management makes assumptions about what customers want. The outcome is that sometimes products are overspecified or over-engineered for the requirements of the market, and therefore too costly for many customers. However, marketers have identified a subset of relatively price-insensitive customers whom they dub ‘innovators’, who are likely to respond positively to company claims about product excellence. Unfortunately, this is a relatively small segment, with no more than 2.5 percent of the potential market.
Production-oriented businesses believe that customers choose low price products. Consequently, these businesses strive to keep operating costs low and develop low-cost routes to market. This may well be appropriate in developing economies or in subsistence segments of developed economies, but the majority of customers have other requirements. Drivers of BMWs would not be attracted to the brand if they knew that the company only sourced inputs such as braking systems from the lowest-cost supplier.
Sales-oriented businesses make the assumption that if they invest enough in advertising, selling, public relations (PR) and sales promotion, customers will be persuaded to buy. Very often, a sales orientation follows a production orientation. The company produces low-cost products and then has to promote them heavily to shift inventory.
On the other hand, a customer or market-oriented company shares a set of beliefs about putting the customer first. It collects, disseminates and uses customer and competitive information to develop better value propositions for customers. A customer-centric firm is a learning firm that constantly adapts to customer requirements and competitive conditions. There is evidence that customer-centricity correlates strongly with business performance.
There is no right or wrong approach, it completely depends upon the economic development strategy you follow.
Reference: CRM by Francis Buttle
Strategic CRM is focused upon the development of customer-centric business culture. This culture is dedicated to winning and keeping customers by creating and delivering value better than competitors. In a customer-centric culture you would expect resources to be allocated where they would best enhance customer value, reward systems to promote employee behaviors that enhance customer satisfaction and retention, and customer information to be collected, shared and applied across the business.
Customer-centricity competes with other business logic. Philip Kotler identifies three other major business orientations: product, production, and selling.
Product-oriented businesses believe that customers choose products with the best quality, performance, design or features. These are often highly innovative and entrepreneurial firms. Many new business start-ups are product-oriented. In these firms, it is common for the customer’s voice
to be missing when important marketing, selling or service decisions are made. Little or no customer research is conducted. Management makes assumptions about what customers want. The outcome is that sometimes products are overspecified or over-engineered for the requirements of the market, and therefore too costly for many customers. However, marketers have identified a subset of relatively price-insensitive customers whom they dub ‘innovators’, who are likely to respond positively to company claims about product excellence. Unfortunately, this is a relatively small segment, with no more than 2.5 percent of the potential market.
Production-oriented businesses believe that customers choose low price products. Consequently, these businesses strive to keep operating costs low and develop low-cost routes to market. This may well be appropriate in developing economies or in subsistence segments of developed economies, but the majority of customers have other requirements. Drivers of BMWs would not be attracted to the brand if they knew that the company only sourced inputs such as braking systems from the lowest-cost supplier.
Sales-oriented businesses make the assumption that if they invest enough in advertising, selling, public relations (PR) and sales promotion, customers will be persuaded to buy. Very often, a sales orientation follows a production orientation. The company produces low-cost products and then has to promote them heavily to shift inventory.
On the other hand, a customer or market-oriented company shares a set of beliefs about putting the customer first. It collects, disseminates and uses customer and competitive information to develop better value propositions for customers. A customer-centric firm is a learning firm that constantly adapts to customer requirements and competitive conditions. There is evidence that customer-centricity correlates strongly with business performance.
There is no right or wrong approach, it completely depends upon the economic development strategy you follow.
Reference: CRM by Francis Buttle
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