The effect of customer relationship management on financial performance

Between the years of 1950-1970, due to the businesses that constituted the world economy were less compared to the consumers, there was supply shortage in production and consumer demands were also high. While consumers were buying whatever they picking it up and meeting their needs, the businesses made profits by selling more products without regarding the opinions of customers with the understanding of Product Focused Marketing. By investing in new technologies that developed in the years after 1970, businesses gave importance to quality, increased production and variety of products and entered the race to get more share in the market than their competitors. But since the 1990's, innovations among internet, information, communication and transportation technologies have improved, and the rapid globalization process in the 21st century has lifted the borders of markets in economies. Consumers' accessibility to internet on the product range, quality, prices and services of the businesses led consumers to become more selective and hard-to-please by changing their profile. Now, customers have moved toward businesses that satisfy their wishes and expectations more quickly and economically, creating satisfaction, and value. Against this tough competition, business managers have to keep an eye on organizational structures; they have been forced to restructure radically and to develop new strategies in the areas such as purchasing-production -finance-personnel management, and especially in the marketing and sales departments. Besides technology and products are easy to imitate, Customer Relationship Management (CRM), a new strategy that is difficult and impossible to imitate by competitors, has started to focus on customer-oriented approach and value to its customers. It has already been understood that CRM, which is difficult to imitate, has a positive impact on the marketing, financial performance and organizational success of businesses, and will have a more significant strategy in the future. This study, consists of four parts, has aimed at determining the importance of CRM for businesses and determining the effects on the financial performance of these businesses by panel data analysis. In the first part, the concept of customer, customer value, customer satisfaction and loyalty, comparison of customer oriented marketing, as a result of changes in customer profile, with traditional marketing and relational marketing, definition, emergence and importance, objectives, benefits on both businesses and customers of customer relationship management have been addressed within the scope of CRM. In the second part, the elements of CRM, strategies and process, architectural structure and implication, marketing applications, success and risk factors of CRM, and CRM in the world and Turkey have been considered. In the third chapter, the concept of financial performance and valuation methods are explained by referring to performance concept and valuation criteria. In the fourth part, analysis of data for 3-month periods belonged to 6 firms in the Retailing Trade Sector, whose shares are traded in Istanbul Stock Exchange (BIST 100) between the years 2006-2014, are tested by Panel Data Analysis method. The effect of the CRM, which is the aim of this study, on the financial performance has not been determined, yet, but it has resulted in the positive effect of the sales and the assets of the businesses that implement CRM. This positive interaction in the sales and assets has increased the expectation that the companies which implement CRM will affect their financial performances in the future positively.