The business-to-business (B2B) landscape is rapidly changing due to a variety of trends: The evolving end-customer expectations drive companies to be more responsive and provide a better value-proposition to their customers. This has translated into business markets, demanding greater responsiveness, reliability, and quality consciousness from supplying firms (Sheth & Shainesh, 2001: 274).
Market consolidation as a result of a wave of mergers and acquisitions in many industries during the past two decades forces many companies to focus on the few large customers that survived (Narayandas, 2003: 1). Globalization, hyper-competition, the rapid rise of information technology, and the commoditization of many products through e-commerce have resulted in better visibility of demand and supply and lower switching costs. Logistics and communication advances have made buying from across the globe as easy as buying locally (Schäfer, 2007: 10).
All this has lead to an erosion of customer loyalty and the ability to seek lower priced, better quality options from a wide variety of suppliers instantaneously. Therefore, building customer loyalty through relationship management is not a choice anymore for most businesses; it is crucial for the achievement of sustainable competitive advantage (Sheth & Shainesh, 2001).
This report to the head of marketing of an imaginary business-to-business supplier aims to discuss the implementation of a customer relationship management (CRM) system. More specifically, the author will define the relevant terms, outline the suggested CRM techniques, and highlight their potential benefits and limitations. At the end, some final conclusions and recommendations will be presented.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Customer Relationship Management in Business Markets
- Definition of CRM
- Types of Relationships
- Relationship Value and Customer Profitability
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This report aims to discuss the implementation of a Customer Relationship Management (CRM) system in a business-to-business (B2B) context. It defines relevant CRM terms, outlines suggested CRM techniques, and highlights their potential benefits and limitations.
- Defining Customer Relationship Management (CRM) in B2B markets.
- Analyzing different types of business relationships (transactional vs. collaborative).
- Assessing the value and profitability of customer relationships.
- Exploring the implementation of CRM strategies.
- Identifying the benefits and limitations of CRM systems.
Zusammenfassung der Kapitel (Chapter Summaries)
Introduction: This introductory section sets the stage by discussing the evolving B2B landscape and the increasing importance of customer relationship management (CRM) in achieving sustainable competitive advantage. It highlights trends such as changing customer expectations, market consolidation, globalization, and technological advancements that necessitate a shift towards proactive relationship management. The report's objective – to analyze the implementation of a CRM system – is clearly stated, along with a roadmap outlining the discussion of relevant terms, suggested techniques, and their potential benefits and limitations.
Customer Relationship Management in Business Markets: Definition of CRM: This section tackles the diverse interpretations of CRM, acknowledging the lack of consensus among academics and practitioners. It contrasts the narrow (technology-focused) and broad (holistic, strategic) definitions of CRM, adopting the latter for its comprehensive approach. The discussion emphasizes CRM as an integrated approach encompassing people, processes, and technology, aiming to understand and manage customer relationships effectively to ultimately enhance shareholder value. This foundational definition lays the groundwork for understanding the subsequent discussions on relationship types and value.
Customer Relationship Management in Business Markets: Types of Relationships: This section delves into the spectrum of buyer-seller relationships, ranging from transactional exchanges characterized by anonymous transactions and arm's-length dealings to collaborative exchanges built on trust, joint problem-solving, and mutual commitment. It highlights the importance of aligning relationship strategies with the specific characteristics of each customer, considering factors such as the availability of alternatives, market dynamism, purchase importance, and information exchange. The chapter differentiates transactional and collaborative relationships based on key characteristics, laying the foundation for understanding how different CRM strategies might be applied to different customer types.
Customer Relationship Management in Business Markets: Relationship Value and Customer Profitability: This section focuses on the crucial aspect of assessing the value and profitability of customer relationships. It introduces the concept of return-on-relationships (ROR) and its role in determining the optimal level of engagement with customers. The chapter emphasizes the importance of considering risk alongside return, suggesting the application of the capital-asset-pricing-model (CAPM) for objective relationship valuation. The section also highlights the use of activity-based costing (ABC) for determining individual customer profitability, illustrating how focusing on the most profitable customers can significantly enhance overall profitability.
Schlüsselwörter (Keywords)
Customer Relationship Management (CRM), Business-to-Business (B2B), Relationship Marketing, Transactional Exchanges, Collaborative Exchanges, Customer Profitability, Return-on-Relationships (ROR), Activity-Based Costing (ABC), Sustainable Competitive Advantage, Customer Loyalty.
Frequently Asked Questions: A Comprehensive Language Preview
What is the purpose of this report?
This report analyzes the implementation of a Customer Relationship Management (CRM) system in a business-to-business (B2B) context. It defines CRM terms, outlines CRM techniques, and highlights their potential benefits and limitations.
What are the key themes explored in this report?
The key themes include defining CRM in B2B markets, analyzing different types of business relationships (transactional vs. collaborative), assessing customer relationship value and profitability, exploring CRM strategy implementation, and identifying the benefits and limitations of CRM systems.
What are the different types of business relationships discussed?
The report distinguishes between transactional exchanges (anonymous, arm's-length) and collaborative exchanges (trust-based, joint problem-solving, mutual commitment). It emphasizes aligning relationship strategies with individual customer characteristics.
How does the report define Customer Relationship Management (CRM)?
The report adopts a broad, holistic definition of CRM, encompassing people, processes, and technology, aiming to understand and manage customer relationships effectively to enhance shareholder value. It contrasts this with narrower, technology-focused definitions.
How is customer relationship value and profitability assessed?
The report introduces the concept of Return-on-Relationships (ROR) and suggests using the capital-asset-pricing-model (CAPM) for objective relationship valuation. Activity-based costing (ABC) is also highlighted for determining individual customer profitability.
What are the key benefits and limitations of CRM systems discussed in the report?
While the report details the benefits of CRM in achieving sustainable competitive advantage and enhancing customer loyalty, it also acknowledges and implicitly explores potential limitations through its analysis of different relationship types and the complexities of assessing relationship value and profitability. Specific limitations are not explicitly listed but are implied throughout the analysis.
What is the structure of the report?
The report includes an introduction, sections on CRM in business markets (covering definition, relationship types, and value/profitability), and concludes with a summary of key terms and concepts.
What are the key takeaways from the report's introduction?
The introduction sets the stage by discussing the evolving B2B landscape and the increasing importance of CRM for achieving sustainable competitive advantage, highlighting trends impacting relationship management. It clearly states the report's objective and provides a roadmap for the subsequent discussion.
What are the key words associated with this report?
Key words include: Customer Relationship Management (CRM), Business-to-Business (B2B), Relationship Marketing, Transactional Exchanges, Collaborative Exchanges, Customer Profitability, Return-on-Relationships (ROR), Activity-Based Costing (ABC), Sustainable Competitive Advantage, Customer Loyalty.
Where can I find more detailed information on each chapter?
The report provides chapter summaries that offer a detailed overview of the content covered in each section. These summaries provide more detail on the specific topics covered in each chapter.
- Arbeit zitieren
- Timo Beck (Autor:in), 2010, The Importance of Customer Relationship Management in Business Markets (B2B), München, GRIN Verlag, https://www.grin.com/document/147717
