After 17 years of economical and market development, Romanian companies face a new challenge: the tough competition from the European Union and the battle for the customers. The Romanian enterprises will have to learn not only how to attract customers, but also how to keep them. Marketing programs include now aspects regarding customer orientation, relationship management, loyalty and quality. In this paper, we will follow the main aspects, characteristics, dimensions and processes of Customer Relationship Management, and we will analyze the challenges that the local companies will have to face. Examples from the financial service sector will round the actual situation of the implementation of the CRM rules and principles in Romania.marketing information system, customer relationship management, business asset, customer acquisition, customer retention

Alina Mihaela Dima

Mihaela Cornelia Prejmerean

English

Research Papers in Economics

 
 
CUSTOMER RELATIONSHIP MANAGEMENT  
 
As. univ. drd. Mihaela Cornelia Prejmerean 
Lect. univ. dr. Alina Mihaela Dima 
 Academy of Economic Studies, Bucharest  
 
 
Abstract: After 17 years of economical and market development, Romanian companies face a 
new challenge: the tough competition from the European Union and the battle for the 
customers. The Romanian enterprises will have to learn not only how to attract customers, but 
also how to keep them. Marketing programs include now aspects regarding customer 
orientation, relationship management, loyalty and quality. In this paper, we will follow the 
main aspects, characteristics, dimensions and processes of Customer Relationship 
Management, and we will analyze the challenges that the local companies will have to face. 
Examples from the financial service sector will round the actual situation of the 
implementation of the CRM rules and principles in Romania.  
 
Keywords: marketing information system; customer relationship management; business asset, 
customer acquisition; customer retention. 
 
 
1. Introduction 
 
In the last decade, the majority of the companies were preoccupied with 
production, recession, mergers, new technologies and business regulation. Romania’s 
accession in the European Union will bring many advantages for further development, 
together with membership in a Common Market with common policies on product 
regulation, and freedom of movement for all the four factors of production (goods, 
services, capital and labor) 
This means that Romanian companies will compete with other companies 
from the EU directly in their home market. European companies are more flexible and 
mobile and will put a high pressure on the local companies in order to produce better 
products, launch better offers and services and orientate more towards their customers.  
High revenue equals important customer is a classic rule when the company 
organises its customer policy. “An important customer brings a gross  amount of 
money for our enterprise” has become a reflex for many companies abroad and 
perhaps in Romania, too. But is this always true, or do we need more information than 
a simple figure reported at the end of the year?  
 
 
  2. Marketing information system 
 
A winning company is more productive in acquiring and retaining customers, 
to expand its clientele (Kotler, 2003). This company improves the value of the 
customers by reducing the rate of defection, increasing the longevity of customer Management & marketing 
 
40
relationship, making low-profit customers more profitable or terminating them etc. 
Gathering information on the actual or potential marketplace not only allows the 
organisation to monitor trends and issues concerning its current customers, but also 
helps it identify and profile potential customers and new markets, to keep track of its 
competition, their strategies, tactics and future plans (Brassington and Pettitt, 2003). In 
order to collect and organize a high quantity of diverse information, the enterprises 
started to build marketing information systems. There are, mainly, a set of procedures 
and methods by which pertinent, timely and accurate information is continually 
gathered, sorted, analysed, evaluated, stored and distributed for the use of marketing 
decision makers (Zikmund and D´Amico, 1993). The marketing information system 
includes data from external and internal sources (sales records, customer records, 
marketing communications, and sales force information). The focus on the customer 
and the integration of the marketing function helps the company to create customer 
databases with comprehensive information about individual customers or prospects.  
 
 
3. Customer relationship management 
 
Customer Relationship Management has been around for the last 30 years, but 
it became very important when companies changed their attitude towards marketing 
function. Nowadays, the cross-functional approach to marketing requires an 
organizational culture and climate that encourages collaboration and cooperation 
between departments. People within the business must understand their role in serving 
customers, internal or external one. CRM builds on the principles of relationship 
marketing and recognizes that customers are a business asset and not simply a 
commercial audience, implies the structuring of the company from functions to 
processes, information are used proactively rather than reactively and develops the 
one-to-one marketing approaches (Payne, 2006). 
When defining CRM, we must first explain the difference between customer 
acquisition and customer retention. The two concepts have different drivers. 
Attracting customers has become very difficult these days, when people are harder to 
please. They are smarter, price conscious and sensitive, more demanding, less 
forgiving, and they are approached by many more competitors with equally good or 
better offers (Kotler, 2003). Companies focus more on sales analysis, customer 
segmentation, advertising, merchandising and campaign management. The more 
difficult part is keeping the customers. According to Bruhn, a customer is satisfied 
when the comparison between offer and consumption fulfils his/her expectations, after 
he/she accepts the company, trusts it  and exhibits a positive attitude towards it, 
becomes loyal to that company. In this situation, the customer talks favourably about 
the company and about its products, pays less  attention  to competing brands and is 
less sensitive to price, which turns transactions into  routine (Bruhn, 1999). With 
customer retention, the company must pay attention to service satisfaction and trust in  Customer relationship management 
 
41
the organization and its staff. Some companies believe that if a customer complaints 
the problem will be solved, but 96% of unsatisfied customers don’t complain and go to 
another company.  
Therefore, Customer Relationship Management is the mechanism for retaining 
customers (Russell-Jones, 2003).  
Mainly CRM allows the company to understand who their customer is, isolate 
the best customer (those with whom you desire to have long-standing relationships), 
create relationships stretching over time and involving multi-interactions, manage the 
relationship to mutual advantage, seek to acquire more of those “best” customers. 
Inputs like marketing strategy, customer base, products, and regulation, competitors 
and staff skills are synthesized in a CRM programme which creates outputs as 
customer service, customer retention, higher share of wallet, customer referral, more 
predictable revenues streams, improved profitability, lower costs and better 
compliance (Russell-Jones, 2003). 
 
 
4. Developing a strategy in customer relationship management 
 
Because CRM is a cross-functional activity and large companies have 
thousands and millions of customers, the need for a strategic framework is very high. 
The dimensions of a CRM strategy are mainly focused on defining the following 
topics: 
-  object of the customer relationship management – the company has three 
options: focusing on the company itself, on a brand or on the distributor; 
-  target segment – the company usually sets priorities between different 
customer segments, it defines  strategic customers based on the portfolio 
analyses, factors as revenue, length of the relationship, income, collaboration 
with the customer. These are its analysis criteria; 
-  ways of retaining the customers – customers’ satisfaction  is in the centre of 
all the decisions, but customers retention can also become a central issue 
through contractual clauses, such as service, leasing and warranty; 
-  choosing the instruments of CRM – the company combines the instruments of 
the 4P´s with focus on the customer; 
-  intensity and timing of the CRM decisions – show when and how should the 
company introduce different instruments; programmes can last from one day 
to one week, or from three month to two years;  
-  cooperation within the CRM programme – sometimes the company must 
cooperate with other partners from the distribution channel, mainly between 
producer and wholesaler and retail. 
 
 
 Management & marketing 
 
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5. Instruments of customer relationship management 
 
  The communication policy plays an important role in the instruments mix. It 
follows two objectives: first, to build a permanent dialogue with the customer in order 
to stabilize or change its expectations, and second, to counteract influences after 
consumption. The main CRM instruments within the communication policy are:  
Direct-Mail is material distributed through the postal service to the recipients’ home 
or business address to promote a product or service. In CRM the mailed issue can vary 
from a simple letter to a catalogue, and its sending will always occur at a particular 
moment in customer’s life (birthday, invitation for an event). It must incorporate 
sticky gadgets to increase their chances of being opened and read; 
Newsletters are distributed to customers for free and contain information about new 
products, offers for special events and others; 
Fidelity cards (store cards) are an important tool in gathering information about 
customer behaviour. By accumulating points of fidelity, the customer can benefit from 
different special offers; 
Clients club designates a concept which has grown in parallel with the fidelity cards. 
Its main forms are VIP-Club, Fan-Club, Product-Interest-Club, and Lifestyle-Club. 
The club represents an opportunity for the company to make offers in accordance with 
the social status, acceptance, prestige and expectations of its customers; 
Telemarketing allows companies to undertake marketing research and is highly 
measurable and accountable; the number of positive and negative responses are easily 
recorded and monitored. It provides for interaction, is flexible and permits immediate 
feed-back. 
Online-marketing includes many forms such as on-line advertising, on-line sales 
promotions, on-line direct marketing, on-line public relations, one-line personal 
selling. The medium used is the internet and the main instrument is the email. Virtual 
promotions are cheaper than hard copy versions, but the challenge is to drive traffic to 
your company’s Web site. 
Event-marketing takes place in three main areas: the product (here, it focuses on 
increasing sales), the corporation (for developing a corporate body) and the 
community (to make a difference in the life of the local community) (Bruhn, 1999& 
Fill, 2002).  
The price policy can be thought about in various ways when building a CRM 
programme: discounts for special customers, underselling or matching competitors, 
loyalty refunds, bundling items together and offering overall prices. Although price is 
not a measure of inherent value received, it is often used by customers as a 
benchmark, ignoring any other features or differences. 
Key factors in the product policy are the product itself, with quality, design, technical 
features, packaging and service management which includes lifelong warranty, price 
warranty or a customer telephone line.  
An active management in the distribution policy can focus on the customer or on the 
distribution channel. The producer evaluates the activity of the distribution partner and  Customer relationship management 
 
43
intervenes when needed. The focus on the customers is realised through a Key 
Account Management which develops programmes for special customers.  
 
 
6. Customer relationship management in financial services 
 
Financial services differ from many other industries. This can be seen 
particularly in Romania, where 40 commercial banks fight for a population of 21 
million citizens.  
They cover the whole spectrum of customers from individuals to partnerships, 
institutions, corporations and governments. As a result, it can be very difficult to focus 
on single markets. Customers are often in two positions: they may have a deposit and 
savings accounts, but also loans and overdrafts. They are very service focused, they 
sell only intangibles. Financial services require processing billions of transactions 
worldwide and they are one of the heaviest regulated industries in the world (Rusell-
Jones, 2003).The customers in the financial services are better informed, are switching 
channels, and seem to be more demanding of service, and used to change. The market 
is also highly competitive and new entrants are coming with diverse products and 
approaches. 
  The industry of financial services in Romania has a very high potential and 
registers every year high growth rates. Till now, the location in a major city of the 
country with a population around 300.000 people was an advantage of the business 
and a success factor. Now the battlefield has moved in the small towns. The 
competition became tougher; banks began to develop and to introduce new products. 
Some experts say that a weakness of the banking sector is market segmentation. There 
is lots of information about customers, but it seems that banks prefer to focus on 
clients with large savings accounts. The main banks in Romania, as BRD, BCR, ING, 
and HVB-Tiriac announced for the year 2005 an increase in the number of the private 
banking clients. These are mainly customers with accounts between 50.000 and 
100.000 Euros, they benefit of private consultancy, special interest rates, commissions, 
and special insurances.  
Customers have also a word to say about their bank. A market study made by 
Deadalus Consulting revealed that the customer profile for banking services is:  person 
aged between 45-55 years, with higher or middle education. The most utilized service 
is the bank card for salaries payment (32,6%). Next, savings accounts (10,2%), credits 
for personal needs (11,1%), credits for buying electronics (9,2%) and auto leasing. 
The best grades were received by Raiffeisen Bank (8,83), BCR (8,58) and BRD 
Societe Generale (8,57). A customer’s criteria when choosing a bank are the trust in 
the bank, the environment in the branch, the quality of the staff, the advice they 
receive, the best interest rate they can receive, the information about the credit costs, 
and the conditions for obtaining a credit.  
A successful service provided by the majority of the banks is internet banking. It 
allows clients to save time and money, without going to the bank, 24 of 24 from inside Management & marketing 
 
44
or abroad. The access is free of charge or very cheap, and includes all kinds of 
activities from money transfer, payment orders, currency exchange, payment of 
current bills, external payments etc. The rate of penetration is still low, ranking 
between 10% and 30% of the customers in one middle bank. 
 
 
7. Conclusions 
 
  Romanian companies must focus in the future on the Customer Relationship 
Management and try to turn a “susceptible” client into a “partner”, to transform people 
who once needed their product/service, or occasional business partners into supporters 
and advocates and, eventually,  into loyal partners that “sell” on the behalf of the 
company. Companies must create a permanent dialogue with their customers, and 
fight for them, because the clientele is not given for free.  Customers that were price 
sensitive show now a higher interest in quality, service and behaviour of staff, and a 
company which concentrated on a price strategy should check how prepared its rivals 
are for a competition in the aforementioned fields. Customer Relationship 
Management increases its flexibility and adaptability to the market, in a world of 
capricious clients.  
 
 
References 
 
Russell-Jones, N. (2003). Customer Relationship Management, The Chartered Institute of 
Bankers, Canterbury 
Brassington, F., Pettitt, St. (2006). Principles of Marketing, Prentice Hall, Harlow  
Payne, A., 2003. Handbook of CRM: Achieving Excellence in Customer Management, 
Butterworth-Heinemann, Oxford 
Fill, C. (2002).  Marketing Communications, Contexts, Strategies and Applications, Prentice 
Hall, Harlow 
Kotler, Ph. (2003). Marketing Management, 11
th edition, Prentice Hall, New Jersey.  
Bruhn, M. (1999). Kundenorientierung – Bausteine eines exzellenten Unternehmens, Verlag 
C.H. Beck, München 
Weis, H.Ch. (2004).  Marketing,13. überarb. und akt. Auflage, Kiehl Verlag, Ludwigshafen 
www.capital.ro,  accessed in September 2006 
 
 
Note: This paper has been presented to the International Conference on Business Excellence, 
27-28 October, 2006, Brasov, Romania 

Customer Relationship Management, The Chartered Institute of Bankers,

Kundenorientierung – Bausteine eines exzellenten Unternehmens, Verlag C.H. Beck,

Customer relationship management

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