The Impact of Customer Relationship Management on Company Profitability and Growth: An Empirical Study on Some Selected Service Organizations in Bangladesh

Abstract

Customer Relationship Management (CRM) can be defined as the process of creating and maintaining long-term relationship between a company and its customers for a positive sum game (that is, for mutual gains). To implement this process, it is needed to have long term relationships between the company and its suppliers and marketing channel members as well. The traditional marketing mix (4 Ps plus R&D) is not sufficient to ensure a sustainable growth. To grow (in terms of profit growth rate and customer growth rate), it needs an effective CRM strategy in operation. The present study finds that CRM is a necessary strategy for growth of a company, but it is not a sufficient strategy. A company may have a product advantage, a price advantage, sufficient spatial convenience (right product in right place at right price), promotional activities, and R&D activities. But these strategic marketing tools and R&D activities alone cannot ensure either sustainable growth or a competitive advantage of a company. An effective CRM strategy along with right strategies regarding the 4 Ps and R&D activities is a must for a company for its very survival in the market. The present study also finds that the impact of CRM on company profitability and customer growth is stronger in people processing service organizations than in possession processing service organizations.