Advantages and Losses for the Company
Benefits for the Company
1. The ability to recognize the most profitable and unprofitable customers so that marketers can focus their marketing efforts on the only profitable customers and give less attention to unprofitable customers. Instead of sending the same message to all customers. Thus wasting a lot of costs used to reach customers who are not interested or low value to the company (Lamb et al. 2001, p. 361).
2. The ability to create long-term relationships with customers by interacting personally and customizing products so that they can meet customer needs, so the company can make customers satisfied. Moreover, satisfied customers would prefer to respond to other promotions if they had trusted the marketer (Lamb et al. 2001, p. 361).
3. The ability to treat different customers differently. marketers can treat each customer as an individual who has different needs from other customers (Lamb et al. 2001, p. 361).
4. Increase knowledge about customers and prospective customers. With well-developed customer relationship marketing and customer databases, marketers can easily and regularly access in depth, information about their customers, thus enabling companies to make more appropriate marketing decisions (Lamb et al. 2001, p. 361 ).
Losses for the Company
Creating a database can be quite expensive. Companies spend thousands of dollars a few months to create a basic list of customers to millions of dollars and several years to create a large customer database to use in every business decision the company makes. Moreover, without clear plans and goals, the failure rate can be very high (Lamb et al. 2001, p. 361).
Advantages and Disadvantages for Customers
Benefits for Customers
With the application of customer relationship marketing supported by current technology, it is possible for companies to interact with these consumers in new ways, and can customize products and services to suit customer needs. So consumers can choose products and servants that suit their needs and desires and get personal attention (Lamb et al. 2001, p. 361).
Losses for Customers
Another weakness of customer relationship marketing is the increasing concern about the privacy of customers which can be seen as sensitive and personal. Although some customers enjoy being needed as individuals, concerns arise from customers that the company knows too much about them and may misuse their personal information (Lamb et al. 2001, p. 361).