CUSTOMER RELATIONSHIP

MANAGEMENT
Ch 3: CRM as an Integral Business Strategy
 The Nature of CRM Strategy
In studying successful companies Treacy and
Wiersema (1996) discerned three ‘Value Disciplnes’
namely:-
1. Operational excellence
2. Product leadership
3. Customer intimacy
 1. Operational excellence

• Find combination of price, quality and ease

of purchase that none of the competitors are
capable of matching.
• Offer a guaranteed low price and problem
free service
• Focus on achieving cost leadership

Eg: McDonalds, Dell

 2. Product Leadership
• Work hard to implement innovation and
renewal.
• Creative, inspired and have many ideas.
• Risky.
• Quick decisions.

Eg :Apple, Nike
 3. Customer Intimacy
• Relationship with customer
• A great deal of attention is focused on:-
Who do we want and who do we not want as
our customer?
• The company looks at the ‘lifetime value’ of a
customer, not only at the profit or loss of the
transactions.
 Conclusion

• Which value discipline fits best with the CRM

strategy?
 Conclusion

• What is the distinctive feature of ‘Customer

intimacy’ discipline?
 Conclusion
• It is not recommended to combine the three value
disciplines.
• Even an organization that strives for operational
excellence will have to maintain the minimum level
of innovation and attention to and care for individual
customers.
 Offensive versus Defensive
Strategy
Enlarge Market
Offensive
(New Customers)
Increase Market
Share
Generic
Strategy

Build Switching
Barriers
Defensive
(Current Customers)
Increase
customer
Satisfaction
 The context of CRM strategy
• Internal
• external