CRM value chain model and its role in an effective

Customer relationship management


With the increased demand of CRM in the modern world of advanced business management, a number of solution providers have become dominant in providing software based CRM services.

The importance of CRM in organizations can be justified from the fact that the CRM market which is currently valued at $20.6 billion will grow upto$36.5 billion by 2017 on international basis.

The effectiveness of CRM implementation in any business has become prominent as a lot of large and big companies go for this procedure in order to maximize their business as well as make good relations with clients.

The awareness of Customer relationship management has risen to such a value that most of the modern companies are investing more in CRM implementation then in intellectual business works.

CRM software venders

A lot of companies have shown remarkable performances by launching very competitive products in market which help in specification, implementation, maintenance and development of CRM. The top names include Oracle, SAP, Salesforce, Microsoft and SugarCRM.

Oracle CRM

The oracle CRM has been providing its CRM services for a long period of time. Its most prominent products include Oracle Siebel CRM, Oracle CRM on Demand, Oracle E-Business Suite, PeopleSoft Enterprise, Oracle Contact Center Anywhere, RightNow and Fusion CRM. As of now Oracle has 6000 CRM customers worldwide and around 6 million users.

It is a leading company in CRM services. Oracle Siebel has become much popular in providing CRM services through Sale Force Automation. Its well developed structure is well suited for organizations facing high risks and increase costly development.

The new oracle product Oracle Fusion would be top service provider in history of CRM service providers.


Talking about SAP CRM services, it comprises of a complete CRM system which is integrated to a application which works best for midsized businesses. It has served as the most demanded tool for CRM services for very long time in industries. Most recently released product of SAP is SaaS.

A cloud based CRM service extension is also launched by SAP. SAP and Oracle are very old rivals in field of CRM services. Another name in world of CRM service providers is It is third most famous company in providing cloud CRM services.

It provides a variety of customer relationship management applications which may turn out to be the turning point of any falling business if used properly and effectively.

Having a top position among CRM service providers, has reputation of providing these services to bigger firms. However in case of, the CRM cloud services are provided on subscription bases and are not allowed to be utilized for private usage.

Microsoft CRM

The next name in CRM world is Microsoft. Dynamics CRM has been an effective and unique device from Microsoft which has served the organization for years by enabling these to make valuable and better relationships with the customers keeping in view the customer management as well.

Microsoft CRM has a feature of welcoming cloud customers and business partners as well to install server-side code in cloud. This increases the versatility and universality of CRM services provided by Microsoft.

Sugar CRM

The last major name with high reputation in CRM world is SugarCRM. SugarCRM is a leading service provider when it comes to open source CRM software.

It is most easy to use and cost effective stand alone service provider in the market. It adapts itself automatically to the challenging industry so that better CRM goals can be achieved. It is known for its low cost services.

The type of the CRM service that an organization needs must be thoroughly concluded with a detailed research because it is very crucial in development of a good CRM. If the right CRM is implemented in any organization at right time then the business of this organization can go up to skies within days!

CRM development

Why organizations need to follow CRM principles and models?

A CRM in any company can be practiced in different ways. Usually the principles and rules developed by researchers are deployed in successful development of CRM.

Some models are also available in market, which are practiced by a lot of organizations and now the most refined form of these models is established which is being deployed in organizational work structure in this modern era of progress.

The tough competition has forced the organizations to giving importance to every type of customer in order to make a beneficial and long lasting relationship which may give fruitful results in future. One such model is known as CRM value chain model.

Customers in light of CRM value chain model

This model first defines four types of customer and then the steps are defined in light of these customers so that the CRM strategy may be sorted out and executed for betterment of customers as well as organization.

Life time customers

The first type of customers in light of this model is high life-time customers. Such customers are those who have high demands but they are loyal as well. For such customers if any dispute arises, then the whole setup of an organization has to be changed in order to satisfy such customers.

Such customers are less in number but are valuable to company in enhancing its business.


The second types of customers are the ones copied by the other ones. These customers are known as benchmarks. Such customers are willing to do business with any company as they just want a solid platform and a good reputation which can be showed off to attract other fishes.

Innovative customers

The third ones are those who bring innovations and new ideas to the company. Such customers often become the turning point of a company’s business at they have very inspirationally amazing ideas which can be practically implemented to increase the business of any firm.

Cost magnets

The last types of customers are cost magnets which absorb a huge amount of cost in all circumstances. This enables the other minor customers to get stable and become more profitable. Keeping in view this sorting of customers.

CRM system implementation in light of CRM value chain model

  1. First, the customers of any organization being considered for CRM implementation are sorted out according to above mentioned customer genres.
  2. Once sorting out is done then the statistical reports are made which show the percentage and quantity of each and every type of customer of the firm.
  3. The next step deals in development of a good and effective understanding with the customers who are selected for CRM strategy processing. This development involves interaction with customers in a very thorough way in order to get their complaints, suggestions and feedback.
  4. Once such intimacy with customers is developed then the information obtained from customers is processed in order to select the most suitable path which may be followed later on.
  5. The last step involves the proposing ways and ideas which are in mutual beneficial understanding of both the organization and the company. The researches, predictors and management staff together select the final strategy which is to be followed.

Outcomes of effective CRM deployment using this model

CRM system following this model, once implemented will increase the number of good customers possessed by the company which will increase the profits of any firm by significant amount. A good CRM must be effective in communicating with customers as well. It must be treated as a process.

A CRM must be focused, relevant, reliable and coherent so that it may give beneficial results to the organization once it is implemented. It is only because of CRM that long term profitability and sustainability, growth of customers and reduced losses accompanied with increased profit rates are achieved in organizations.

One thing must be kept in mind that the cost of gaining a new customer is far more than the cost of keeping the existing one.

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