Application of CRM in the life insurance Company in China and in a Dissertation

Application of CRM in the life insurance Company in China and in a company of Ping An Life Insurance of China - Dissertation Example Ping An Life Company understands customer behaviour, focus, and focus on the customers who can deliver long terms profits since they are of great benefit to the company. This company stresses much on customer retention as opposed new customer acquisition since the latter is very expensive. Studies show that retained customers generate over twice as much gross income than new customers in any business hence businesses should focus more on customer retention (Gouthier and Stefan, 2003). The considerable improvement in technology and innovation is making it possible to improve on the customer retention methods through improved customer relationship management. The first step in customer relationship management is to construct a customer database where transaction and customer contact information is accumulated to enable easier follow up on the customer behaviour with time. This task involves seeking historical customer data from operative internal sources such as accounting and customer relations, which since they already have the customer information (Ramashesham, Bejou, Subhash, Mason and Pancras, 2006). Since this company uses a web-based business, this transaction is relatively cheap when compared to other methods, which do not use web-based operations. The database collected from the customer includes the transactions, descriptive information among others. Winer 2001 argues that every satisfied customer brings at least three more while dissatisfied customers discourage at least ten more potential customers. They also assert that regular customers exhibit less price sensitivity than new customers thus customer orient companies can charge higher prices than their competitors without negatively feeling the heat of the competition. Customers expect the sales people to be accountable and continuously solve their problems. They also expect them to be accessible at all times and be creative in responding to their needs. The provision of customer relationship management offers a number of advantages and disadvantages to both the company, which carries the initiative, and the customers who enjoy the benefits, which come with the initiatives. CRM provides the company with the advantage of internal and external information flow thus enhancing the customer satisfaction with the company. Strategies of CRM used in Life Insurance Company This company is applying the new customer relationship approach, which combines advanced technology and sophisticated billing analytical identities, which secures payment before the customer reaches the collection gate. The first strategy used by this insurance company is to choose the right people for the job of customer relationship management. The people chosen for the task should be well trained so that they possess the individuals skills needed in handling the customers