1. How can a good CRM system increase profits for a company?
2. Sometimes it is difficult to convince top management to commit funds to develop and implement a SIS.
Why?

1. A customer defection rate reduction of 5% the company profits can increase by as much as 85% (based on Harvard Business Review) due to

a). Increased transaction volume which will lead to economies of scale and

b) Increased utilization of already made investment

c) Return customers also refer other associates to do business with the company and

d) They cost less to serve

e) They are willing to pay more to be served by the retaining company than another establishment which they are less familiar with and in which they have a less trust relationship

2. The reasons why it may be difficult to convince top management to commit funds to develop and implement a SIS includes

a. A misalignment of views on the way forward

b. Existence of certain business constraints known only to them

c. Top management could have more query about a SIS due to lack of interest or inclination

d. It is difficult to promote the idea of committing funds to the development and implementation since the it is based on assumptions and that of a stranger's opinion

Explanation:

1. A Customer Relationship Management (CRM) system is utilized to manage customer data as well as information communication

A business that employs a CRM system as a strategy will benefit from improved optimization, centralization and well organized customer communication which will lead to higher customer retention rates and an increase in revenue.

2. A Strategic Information System (SIS) assists a company in the changing of their strategy of doing business and the company organizational structure. The function of an SIS is to enable the company react faster to changes in the business environment such that the company can have an advantage over the competition

Therefore, since the SIS is meant to implement change, there may be several reasons why the more experienced, top management, in the business will be reluctant to commit funds to develop an implement a SIS such as

a. A misalignment of views on the way forward

b. Existence of certain business constraints known only to them

c. Top management could have more query about a SIS due to lack of interest or inclination

d. It is difficult to promote the idea of committing funds to the development and implementation since the it is based on assumptions and that of a stranger's opinion.

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