The Impact of the Customer Relationship Management on a Company's Financial Performance

This paper and further research describe the link between Customer Relationship Management and the company's financial performance. The main aim of this paper is to discover whether improved customer orientation leads to better financial (and other performance) results. The authors use quantitative research at small and medium sized Czech companies in the service industry. This particular industry has been selected because of its intangibility which makes for a more competitive environment and therefore produces a need for corporate diversity. This diversity may be fulfilled by a customer-oriented approach - the active seeking and retention of customers. In his book Marketing Management Philip Kotler wrote that retaining a current customer is five times less expensive than acquiring new one. It is therefore less expensive to increase the strength of a relationship resulting in a better relationship between the customer and the company. The research data were collected via quantitative questionnaires covering four main dimensions of customer relationship management - customer satisfaction, loyalty, value and equity. Each dimension consists of several questions on the topic and is graded on a scale. This grade is tested for correlation with financial performance indicators. ROS (return on sales) which describes how effectively the company transforms sales into profit was chosen as the main financial performance indicator.