The Impact of Customer Relationship Management (CRM) Practices on Customer Retention and the Mediating Effect of Customer Satisfaction
Keywords:
CRM, CRM practices, Customer satisfaction, customer retentionAbstract
CRM is built around the ideology of relational exchanges. It refers to all marketing activities directed towards establishing, developing and maintaining successful relational exchanges. Its objective is to attract, maintain and enhance customer relationships with existing and potential customers. It evolved from the concept of database marketing to relationship marketing to present form of CRM. CRM is implemented in wide components of business like customer service, involvement of customers in the business, personalization, communication and rewards etc. It is applicable at the enterprise level to direct all activities of the firm towards the customer. CRM implementation at the departmental level was less successful but implementation at the enterprise level is more successful. Competition and globalization has made CRM as one of the mandatory components of business. Firms can survive and sustain by creating and keeping valuable customers. It is possible if the firm delivers value at every customer interaction and it can be done easily if the firms know and understand their customers well. CRM helps firms to understand their customer and take précised decision. Hence it is a necessity for the existence of a business.
CRM also helps in managing customer life cycle that is acquisition; satisfaction, retention and development of customers. Customer life cycle can be managed by identifying and adopting the most suitable CRM practices. Managing customer life cycle by identifying and adopting the most suiting CRM practices is the key objective of CRM. This article tries to see the effect of CRM practices of the firm on customer retention. This study also tries to see the mediating effect of customer’s satisfaction.
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