National Defense university, Islamabad, Pakistan Bill Nazi Department of Leadership & Management, National Defense university, Islamabad, Pakistan Maid Hussein Department of International Relations, Quad-I-Exam University, Islamabad, Abstract In this period of hyper-competition, globalization and technological breakthroughs, organizations are compelled to realize the importance of knowing their customer better. This move has increased the importance of customer relationship management (CRM) for organizations.
Customer relationship management is an approach to manage customer related information and utilize it to acquire new customers, retain existing ones, and maximize their lifetime value. This is the reason It Is considered as a source of competitive advantage for organizations. Keeping In view the theoretical and empirical Importance, the present study discusses the results of a survey conducted to know the state of customer relationship management utilization in making strategic marketing decisions in 10 major private banks of Islamabad, Pakistan.
The results show that customer relationship management is strongly considered as a strategic tool and that fully supports the strategic marketing decisions. Keywords: Strategic Significance, Customer Relationship Management, Marketing, Banks. 1 . Introduction With increasing competition, survival for companies is becoming difficult day by day. Companies are always in search of finding solutions to help them sustain and increase the efficiency of their businesses. Organizations worldwide started restructuring and re-engineering their business processes to cut costs and become more efficient and competitive.
Smart companies are now changing their business practices by refocusing their efforts on external environment I. E. Customers. In past, easy than today because of small businesses and identifiable customers. Today, the extended size of the businesses and the wide range of customers have compelled organizations to explicitly manage good customer relationships if they want to be successful. This need led to the development of customer relationship management (CRM) concept. Customer relationship management holds the promise to achieve such corporate objectives in this highly competitive arena (Karakas, Karakas, & Pathogenesis, 2004).
CRM covers managing all possible ways that an organization uses to interact with its customers from initial contact to the delivery of the product and services. The basic aim of CRM is to organize the bundle of business processes that deals with customers and involves the collection, spreading and interpretation of customer data in order to identify the patterns of customers’ product/ service usage behavior that can be utilized to make effective marketing programs. Successful CRM programs are directed by carefully formulated and implemented organizational strategy (Cravens & Pierce, 2008).
Traditional marketing strategies focused on 4 As (Price, Product, Promotion, and Place) in order to increase market share. The basic objective was to increase the volume of transactions between the seller COPY RIGHT 0 2013 Institute of Interdisciplinary Business Research 575 VOLE, NO 10 and the buyer. The effectiveness of marketing strategies and techniques were measured by the total number of transactions. The objective of CRM goes beyond increasing the volume of transactions. Its emphasis is to increase customer’s profit, income and satisfaction.
CRM doesn’t only involves a wide set of technological tools but it also involves those company procedures that promote relationship with customer. So CRM on the whole is a working strategy and a process point of view rather than Just a technical viewpoint and that has become the need of every organization including banks. CRM came into power when banking institutions became more and more competitive. They now realized the value of their customers and this need is pushing banks to seek solutions through technology.
Banks are focusing on managing customer relationships in order to minimize the challenges like global competition for deposits, loans, underwriting fees, increasing customer demands, shrinking profit margins, and the need to keep up with the new technologies (Mali & Harper, 2009). So to improve the quality and magnitude of their businesses, companies must design and implement their own CRM programs (Such & Sand, 2008). Banks have realized the importance of CRM and its potential to help value. In order to do this, banks must have an effective CRM implemented. Effective CRM described by Mount et al. Mount, Order, & Hosier, 2008) as, first the organization must decide what kind of customer information it is looking for and what it intends to do with that information and secondly the CRM system must link up different sources of information inflow in the organization (mail campaigns, Web sites, brick-and- mortar stores, call centers, mobile sales force staff, marketing and advertising efforts etc). The objective of current study is to know the degree of CRM practiced in making strategic marketing decisions in Private Banks of Pakistan. 2. Literature Review In literature, many definitions are given to describe CRM.
