Abstract
M.Comm.
The inclusion of e-commerce in an organisation's business strategies entails much more than
just digitalising old business processes. Organisations need to rethink all of their business
process and apply innovation, or else they will just become another industry player. In order
for them to do this, organisations need to consider the impact of e-commerce on business
approaches. The extent of this impact lies at the heart of this study.
A study of customer relationship management activities and e-commerce developments were
made, in order to identify the main CRM components and areas in implementation
methodologies which will be impact on by e-commerce.
South African financial institutions are facing increased competition from international and
local organisations that have entered the market. Financial institutions are losing market
share because of this, therefore they must become more focussed on attracting new and
retaining existing customers.
In today's world customers have more knowledge available to them to help them in product or
service selection, causing them to become more demanding in their expectations and
requirements from organisations. A CRM strategy will help organisations to understand
customers, finding and keeping the right customers, building a relationship with customers
and channeling the important tangible and intangible aspects to customers.
One of the most important implications for organisations that implement CRM strategies is
that it aids the organisation to achieve customer profitability. Organisations usually treat their customers the same, regardless of their individual profitability. But not all customers are
profitable. Thus, some customers might actually cost the organisation more than their
individual profit. Traditional segmentation of the customer base can aid in keeping track of
the current as well as future costs and profits. The second important implication for
implementing CRM strategies is the focus on customer retention. The impact of retention on
the organisation's bottom line should be noted. Organisations can increase their profit with
up to 100 percent if they increase their retention rate by 5 percent. Organisations need to
understand the current and past behaviours of customers so that the organisation can identify
those customers that are likely to switch. The third important implication is customer
acquisition. This is one of the most costly activities in an organisation. The cost of attracting
a new customer is estimated to be five times the cost of keeping a current customer happy.
Implementing CRM strategies will help organisations to focus on the relationships resulting
from customer acquisition building it into profitable relationships.