The Impact of CRM and eCRM on Customer Retention and Profitability

Abstract

Customer Relationship Management (CRM) has evolved into a critical strategy for businesses aiming to enhance customer satisfaction, retention, and profitability. This paper explores the conceptualization of CRM, particularly focusing on its role in marketing, customer retention, and after-sales engagement. It highlights the collaborative nature of CRM, enabling companies to develop better relationships with customers by leveraging data-driven insights. Furthermore, the study examines the implementation of electronic CRM (e-CRM) across different industries, with a particular emphasis on its impact on the car rental sector in Bosnia and Herzegovina and the banking industry in Thailand. The findings reveal that organizations using e-CRM experience increased customer retention and profitability, while challenges such as technological limitations and financial constraints hinder broader adoption. Additionally, this paper provides an analysis of CRM features, including cost, ease of use, and security, which are critical in determining the right CRM solution for businesses. The study concludes by emphasizing the importance of continuous improvement in CRM strategies to foster long-term customer loyalty and competitive advantage.