Evolution of Customer Relationship Marketing

According to Langerak and Verhoef (2003) the thought of customer relationship marketing comes from the concepts of customer orientation, relationship marketing and database marketing. Supported by the rapid advancement of communication and information technology, the three marketing concepts have emerged and become the basis for customer relationship marketing.

In addition, according to Barnes (2001, pp. 8-9) there are 2 factors that influence the emergence of customer relationship marketing. First is the company has been able to measure the value of a customer and the loss that will be experienced by the company if the customer is lost, the way is to calculate the customer livetime value (CLV). As a result, many companies have begun to focus on strategies to satisfy and retain existing customers, while at the same time trying to attract new customers. Secondly, with the growing emphasis on the customer service sector, marketing experts have begun to pay attention to the interactions that companies make with customers. Many are beginning to realize that having a quality product and a low price may not be enough to win the competition, perhaps the customer's decision to continue doing business with a company is largely influenced by how the customer is treated or even what feelings grow inside these customers at the time they interact with the company.

Kotler (2003, pp. 53-72) states that there are 2 CRM terms. First is customer relationship marketing that emphasizes customerization. According to Kotler and Armstrong (2004, p. 73) customerization is a company inviting customers to design their own desired products or services according to their needs and desires. Second is customer relationship management which emphasizes managing detailed information about customers with the aim of maximizing customer loyalty.

The statement above is in accordance with what was described by Moller and Halinen (2000) which states that there are 2 types of relationship marketing theory, namely: market-based relationship marketing and network-based relationship marketing. In short, market-based relationship marketing can be characterized as management of a company based on customers, where the main challenge is to treat customers individually and still be profitable. The main managerial task relates to internal procedures of the company such as planning marketing strategies and analyzing information about customers using databases and information technology. While network-based relationship marketing can be explained briefly as an interdependent management between the company and parties outside the company (external partners) such as suppliers. The tasks and challenges of management include broader and deeper interactions with external parties and customers.

It can be concluded from the description above that market-based relationship marketing is a theory that underlies customer relationship marketing. While network-based relationship marketing is a theory that underlies customer relationship management.

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