In this post, let us consider the importance of customer relationship management in the value chain.
Continue reading to know more about the topic.
What Is the Value Chain Model of Customer Relationship Management?
The value chain model of customer relationship management is a new concept that can be added to the value chain model.
The traditional value chain model includes four steps:
1. Order taking and order fulfillment
3. Marketing and sale
4. Customer service
Customer relationship management is defined as the processes, systems, and activities of a company.
These are also necessary for engaging with customers and managing their relationship with the company after the sale.
One could say that customer relationship management is a subset of the marketing process.
It also targets customers after the sale. So, it is unlike marketing which targets potential customers before they become actual customers.
Customer relationship management ensures that customers are happy with their experience of dealing with a company or its products or services.
It is also essential to ensure that customers are satisfied with the product or service. So, they will recommend it to others in the future.
CRM also aims at engagement with customers, loyalty to the brand, repeat sales, and high profitability.
The Importance of Customer Relationship Management in the Value Chain
Now, why is CRM important in the value chain? For one reason, the value chain is incomplete without CRM.
CRM is a new concept that can be added to the value chain model.
Some companies have extended the traditional value chain with the addition of customer relationship management.
This is also due to the fact that CRM has become an essential part of doing business in today’s competitive and fast-changing business environment.
Companies have to focus on their customers if they want to remain competitive in the global market.
They also have to create a competitive advantage by focusing on their customers’ needs, wants, and expectations. Customer relationship management is an important part of this process.
It helps in improving a company’s relationships with its customers. It also ensures that customers are satisfied with the product or service that they buy from the company.
This also improves customer satisfaction and brand loyalty. So, it leads to repeat sales and high profitability for a company’s products or services.
Without customer relationship management, it would also be difficult for a company to sustain itself in today’s competitive environment.
So, it is important for companies to focus on their customers if they want to remain competitive in the global market.
The Bottom Line
With all of that said, it’s safe to say that the value chain needs CRM. After all, customers have also become more demanding and choosy in today’s competitive market.
They are no longer satisfied with just the product or service they buy.
If companies do not focus on their customers and create a positive perception of their brand in the minds of customers, they will also lose out to competitors who are more focused on their customers’ needs.
To learn more about CRM, check out our blog for more articles.