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6 Key Elements of Customer Relationship Marketing

6 Key Elements of Customer Relationship Marketing

Customer Relationship Marketing (CRM) is a highly topical and relevant way of thinking about marketing. It is relevant because of the internet, and the impact it has had on the way marketing is carried out by businesses.

In this article, I’d like to look at six of the key conceptual elements which under-pin the CRM approach.

Element 1: Customer Differentiation

As its’ name implies, CRM is a customer centric approach to business. With this approach, a company is aiming to differentiate its’ product or service offering by customer profile. Instead of a more conventional approach, where a company differentiates primarily by its’ products or services.

Element 2: Long Term Emphasis

The aim here is to build a relationship with a customer over a period of time. This approach dove-tails very well with many Inbound Marketing strategies which are used on the internet.

This ongoing relationship has both cost and revenue benefits. On the cost side, it is almost always less expensive to market to an existing customer, than find a new one. The reason is simple; they already trust your organisation.

Element 3: Continuing Transactions

This is in some ways related to element two above. Rather than seeking one-off transactions with customers aim for multiple transactions. This may be in the form of cross-sales, add-on sales etc. Or it may be that you become a preferred supplier for a given niche product or service.

Sometimes, this is an economic necessity, as the cost of getting a first transaction is so high, that only repeat sales make the process worthwhile.

Element 4: Two-Way Communication

A core element in the building up of meaningful customer relationships is their ability to stay in touch with a company. With the advent of social media, email and SMS, this is even easier. This technology allows the communication to become more of a two-way process. And it is the customers who are just as likely to initiate a communication as is the organisation.

This is a great way to get real feedback of people’s wants and needs. And it ties in well with element one above; creating customer centric products and services.

Element 5: Retention Focus

With the CRM approach, a company is focused more on how to retain customers as opposed to simply how to acquire more customers. Aiming for a low customer churn rate is seen as highly desirable, and it is very often a cost effective way of doing business.

This feature again ties in well with the shift in power between buyers and suppliers that the internet has created. Buyers are no longer dependent on supply companies to tell them what’s available. They can go to the internet and do their own research, and share stories with other people who have used a product or service.

Element 6: Share of Values

By aiming to share a value set with their customers, companies can build strong relationships. These strong relationships translate into a clear brand identity, which transcends the ability of organisations to simply buy loyalty with advertising or special offers.


In summary, CRM is a major shift in marketing practice, from mass marketing to individualized marketing. The focus has shifted from acquiring lots of new customers to retaining and building more business from a smaller base of loyal high-value customers.