■ Introduction
Most business people are familiar with the term CRM, or to give it its full
title – Customer Relationship Management. However, while there is a
degree of familiarity there is no general consensus in relation to what
CRM actually entails. In short, CRM differs from organisation to organisa-
tion in terms of both definition, application and process. While no univer-
sal definition of CRM exists, few would decry the growing importance of
the concept. All definitions/versions of CRM have a core guiding prin-
ciple relating to the effective development and management of relation-
ships with customers. Ultimately, such relationships sustain the key
drivers of business success (e.g. customer loyalty). Moreover, the rapid
expansion of technology and Internet applications has greatly enhanced
the potential of CRM to operate at both strategic and operational levels.
Lets consider some definitions:
.... a comprehensive strategy and process of acquiring, retaining and
partnering with selected customers to create superior value for the com-
pany and the customer.
(Parvatiyar and Sheth, 2001).... strategic use of information, processes, technology and people to
manage the customer’s relationship with your company across the whole
customer life cycle.
(Kincaid, 2003)... a term for methodologies, technologies and e-commerce capabilities
used to manage customer relationships.
(Foss and Stone, 2001)When the above definitions are amalgamated they provide an overview
of CRM. This emphasises that CRM needs to be seen from a strategic per-
spective and impacts on all aspects of customer interaction, it must gener-
ate value and is often IT based.
Kotler (2003) suggests that delivering increasing levels of customer sat-
isfaction is the key to retaining customers. Clearly, organisations would
This chapter examines the concept of customer relationship management (CRM), primarily
from a strategic perspective. The chapter defines the concept and highlights the importance of
CRM being seen as an integrative process which is supported by technology, as opposed to
being lead by it. Issues relating to service and lifetime customer value are also examined.