Rio Bravo

Problem Statement

Parkard made the mistake of assuming that they knew what their customers’ requirements and expectations were. They rode on their past success and forgot that every single customer is unique and has unique needs.

The only requirements that were specified were the quantity, deliver date and place and the price. Nothing was discussed under quality and specifications. This led to rework and hiring of external consultants, all which led to overspending unnecessarily and missed timelines.

Discussion

Customer relationship management becomes imperative to every organisation as soon as the organisation finds a market and customers for its products and services. Firms need to continually develop new products and services while improving on their current products; this will help in retaining their customers and attract new customers. It costs more to attain a new customer than to keep an existing one, therefore every effort must be made to keep the current customers happy.

CRM involves building and maintaining long-term customer relationships. It includes face to face dialogues with customers in order to understand and know their exact expectations instead of making assumptions about the customers’ needs. Most companies make the mistake of starting with a new product, designing it, validating it and testing it without finding out from the customer if it meets their need. Organisations should instead start with customers and end up with the product. CRM must include talking to customers, understanding their behaviour and their requirements, and then building a system and processes to satisfy those requirements. The human element in customer relationships needs to be cultivated as it remains a necessary factor in creating value. When CRM is used effectively, both sides win; customers get what they want from businesses and businesses increase their profit margins.

Every organisation needs to consider putting a CRM plan in place, this will force the organisation to think about their CRM needs, their technology alternatives and their customer’s needs. Wisner, Tan and Leong (2012:362) states that putting together a solid plan for a CRM project is crucial both as an aid to purchasing and implementing CRM applications, and to obtain executive management approval and funding for the project. The plan should include the objectives of the CRM program, its fit with corporate strategy, new applications to be purchased or used, the integration or replacement of existing methods or legacy CRM systems, the requirements for personnel, training, policies, upgrades and maintenance, and the costs and time frame for implementation.

Once this document is completed, the firm will have a roadmap for guiding

the purchase and implementation process, as