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Traditional Management Systems VS. CRM And SCM
Finance & Accounting
Pages 7 (1757 words)
This paper looks at the difference between traditional management systems with both customer relationship management (CRM) systems and supply chain management systems (SCM). …
Customer Relationship Management (CRM) is a strategy used to learn more about customers’ needs and behaviors in order to solidify their loyalty to the business’s offerings (Wailgum & Patton, 2011; “What Is CRM?,” 2010). This strategy enables businesses effectively utilize their resources to increase their knowledge of the behavior and value of their target customers. This increased insight enables businesses to identify and target the best customers, customization and/or personalize their products and services, track customer contacts, add cross-sell and upsell opportunities, reduce costs and increased overall profitability. CRM may mean different things to different industries but, ultimately, its purpose is to help organizations derive competitive advantages that will sustain their long-term profitability. This section shall differentiate traditional management systems from CRM in terms of differences in approaches, achieving efficiencies, costs savings, and firm profitability.
Differences in approaches (empowering customers, becoming a trusted partner)
A good example that could be used in comparing traditional management systems with CRM is the marketing function of an organization. Under traditional management systems the marketing was product-based and company focused. Management was more concerned with how much control they have on the message conveyed to the customer. In these cases the company was the active participant in the marketing process whereas the consumer was inactive or passive. In contrast under CRM, customers are empowered for example Dell customers can configure their computers prior to ordering through Dell’s website. ...
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