by Moaiyad Hoosenally, Frost & Sullivan
CRM is a strategy. In the increasing competitive environment across industries, companies are continuously looking for ways to differentiate themselves. This has become of increasing importance as the features and prices of products between competitors continue to narrow. Similarly, consumers in general are now not only factoring product and price, but service is becoming of critical importance.
As a result, companies have begun to recognize the need to service their customers, well in order to retain them. CRM does not mean just implementing a solution; it is a corporate decision, not a MIS decision.
Mohandas K. Gandhi wrote, "What is a man if he is not a thief who openly charges as much as he can for the goods he sells". The abiding objective of most businesses is often to maximize profits and at the same time minimize operation costs. Ailing demand has heightened competition between the incumbent companies, causing products to be discounted and this has resulted in declining profit margins.
Price has now become the competitive advantage instead of service. This practice normally leads towards a price war. Although companies are attempting to "openly charge as much as they can" for the products they sell, competition amongst the incumbent companies has lead to lower prices. A strategy based on customer management is required. Declining product pricing will negatively impact company's profit margins.