It is far less expensive to retain an existing customer than it is to acquire a new customer. This is the concept behind the use of which business computer application systems?

It is far less expensive to retain an existing customer than it is to acquire a new customer. This is the concept behind the use of which business computer application systems?

• A. enterprise resource planning (ERP) systems
• B. customer relationship management (CRM) systems
• C. supply chain management (SCM) systems
• D. business intelligence (BI) systems

Answer: (B)

The idea here is that keeping existing customers is cheaper than finding new ones, and CRM systems are built to capitalize on that. A customer relationship management system consolidates all interactions with customers—sales, marketing, and service—into one place. This gives a complete view of each customer’s history, preferences, and issues, which enables personalized communication, timely follow-ups, and proactive support. By tailoring offers, automating retention campaigns, and providing faster, more consistent service, a business increases loyalty and lifetime value while reducing the cost of serving the same customers. Other systems serve different purposes: ERP focuses on internal resources and processes, SCM on the flow of goods from suppliers to customers, and BI on analyzing data across the organization. They can support decision-making, but they don’t target ongoing customer relationships and retention as directly as a CRM does.

The idea here is that keeping existing customers is cheaper than finding new ones, and CRM systems are built to capitalize on that. A customer relationship management system consolidates all interactions with customers—sales, marketing, and service—into one place. This gives a complete view of each customer’s history, preferences, and issues, which enables personalized communication, timely follow-ups, and proactive support. By tailoring offers, automating retention campaigns, and providing faster, more consistent service, a business increases loyalty and lifetime value while reducing the cost of serving the same customers.

Other systems serve different purposes: ERP focuses on internal resources and processes, SCM on the flow of goods from suppliers to customers, and BI on analyzing data across the organization. They can support decision-making, but they don’t target ongoing customer relationships and retention as directly as a CRM does.