Essay
Business level 3 unit 11 p5
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Explain how a customer relationship management system is used in a selected organisation.
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P5- Customer relationship managementCustomer relationship management is how businesses manage their interactions and relationships
with customers using databases. CRM pays attention to customer retention and they do this by
tracking customer purchases using databases which collect and capture data which they can use to
build a relationship with the customer and interact with them and they also collect data in order to
understand customers purchasing patterns. Businesses also use databases in order to understand
their customers and this can allow the business to change and create new products in order to meet
customer needs. Also using databases allows businesses to communicate with customers
individually as this is more meaningful as the communication is personalised. Databases capture
data then data is then analysed to profile and understand customers then they have a personalised
approach of how they provide service to customers. Businesses can use loyalty programmes in
order to receive data from customers such as SWA has their rapid rewards programme. Businesses
putting customers first is customer centric and it builds better relationships and interaction with
customers. When businesses interact with customers individually it allows them to satisfy
customer’s needs. When businesses only build a transactional interaction with a customers this
possibly turns out to be a one off sale whereas building an emotional relationship with customers
can be a 30 year bond. By improving customer’s satisfaction individually this will increase the profit
gained from customer relationships. SWA use CRM to understand their competitors and satisfy
them and know them better than their competitors do.
A Customer relationship system is used at southwest airlines; by using CRM systems to identify
their customers and satisfy their needs. There was a situation where a satisfied customer checked
in at SWA and the database SWA uses was figuring out the customer in order to profile them which
is identifying information about the customer such as personal information and details about flights;
Database identified that the customers is a valued customer who spends an high amount of money
with SWA and they had a terrible previous flight due to broken inflight entertainment and the
information from the data warehouse are copied into the online customer database which copies the
decisions from real time situations in SWA and the identity of the passenger is then passed to the
decision system which will determine any special action which can be taken to satisfies the
customer. The decision system recognised the customer’s incident and decided to offer the valued
customer free refreshments and vouchers and this will be applied through the departure control
system and explanation will be given. The passenger is given vouchers automatically and they will
be given a reason either by the check in agent verbally or as a prompt on the kiosk. A letter will also
be sent automatically to the passenger to apologise for the incident. Even if the passenger wanted
to use Italian as a language, the check in process will be able to communicate in Italian too.
In terms of how customer relationship management benefits Southwest Airlines; CRM systems help
give a view of each customers of all areas of the business and this allows SWA to improve and
provide better customer service and this will decrease defection because providing bad customer
service this will lead to defection which is customers leaving the business. CRM allow businesses to
use databases to analyse customer data to determine their purchasing habits which will allow SWA
to provide offers to customers, which they will value and this can reduce defection. Businesses
contacting customers who have not been making flights with SWA recently and sorting out their
problems can stop them from leaving the business and this will reduce defection. Southwest airlines
also benefit from CRM because their website has a self-service where customers can solve their
issues and this allows customers to be satisfied. CRM allows SWA to send personalised offers to
individual customers and it is likely they will appreciate and use the offers. SWA have a call back
option which will allow customers to get a call back and resolve their issues and this will decrease
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