Question

When customers have an unpleasant customer experience, the company no longer has to worry about them telling a few friends and family; the company now has to worry about them telling everyone. Internet service providers are giving frustrated consumers another means of fighting back. Free or low-cost computer space for Internet websites is empowering consumers to tell not only their friends but also the world about the way they have been treated. A few examples of disgruntled customer stories from the Internet include:

■ A bike-riding tourist requires stitches after being bitten on the leg by a dog. The tourism company is banned from renting bikes and in turn bars the tourist from taking any future tours.

■ A customer leaving Best Buy refuses to show the receipt voluntarily to the guard at the door. The Best Buy employees try to seize the customer’s cart and then decide to park a car behind the customer’s vehicle.

■ Enterprise Rent-A-Car operates a high-stress business, and frequently its customers find that the company did not honor reservations, did not have cars ready for reservations, rented cars with empty tanks of gas, and charged higher rates to corporate account holders.

The pervasive nature of the Internet is increasing customer power and changing business from product-focused to customer-focused. Explain the difference between product-focused business and customer-focused business and why CRM is more important than ever before.

Answer 1

The difference between product-focused business and customer-focused business is that product focussed business is more oriented towards the sales of the product and it's reach to a large customer base and target market. This approach is product centric and the customers are secondary in this approach and it is assumed that customers will definitely buy the product in this approach. However customer focused approach is based on the customer preferences and is customer centric. In this approach, the customer decides which product to buy and which product to not buy. Their preferences are of prime importance and customer service is the key for the success of any organization.

Customer Relationship Management (CRM) is more important than ever before because customer service is the key for success of any organization and the only way of increasing customer base is by providing best service to the existing customers and maintaining CRM database which provides information about the customers and their buying preferences as well and organization can make strategies to serve them in a better manner.