Question

Q64

Describe briefly the three (3) components parts to a CRM model. [3 Marks]

Answer 1

The three components of CRM model are

1. Customer Value/Benefit
2. Primary activities
3. Supporting activities

For every business these activities and values vary. Let’s take an example of an oil refining company. They purchase crude oil and their final product is diesel or petrol. The customer value is the final value that the customer receives. This means for a customer to purchase crude oil and use it would be not feasible. Thus the usable product that the customer receives is the value that is created by the company.

Next is the primary activity. Oil refining happens in multiple stages and each stage takes the crude oil more and more towards the usable product. These core activities are the primary activities.

The last component is the supporting activities. Consider the chemical that needs to be added to the crude oil. These chemicals has to be purchased and a purchasing team undertakes these tasks. This is a supporting activity. While this is not the core business but the quality and the value added(well negotiated price for high quality materials) by these supporting activities hold up the overall primary activity and contribute towards the final value.