Customer Relationship Management
Customer relationship management (CRM) has been one of the most compelling business management concepts of the past 15 years. Originally considered simply a system to automate the sales process, CRM has matured to include a wide range of tasks and processes designed to maximize the value of customer relationships and contribute to sustainable revenue growth.
Broadly defined, CRM consists of a combination of policies, processes and strategies designed to unify customer interactions and record customer information for instant retrieval and on-going analysis.
Common sense dictates that it's cheaper to generate more revenue from existing customers than to acquire new ones. It’s generally accepted that the cost of acquiring new customers is approximately three to five times the cost of customer retention. But retaining customers isn't easy. In this increasingly competitive environment, businesses must not only differentiate their products, but their customer experience as well. In fact, customer experience is emerging as the most important competitive differentiator between vendors in many markets.
Although customers interacting with a company perceive the business as a single entity, despite often interacting with a number of employees in different roles and departments, a CRM strategy can help to provide a consistent and personalized customer experience. Ultimately, the ability to anticipate and respond to each customer’s unique needs will separate the market leaders from everyone else.
By implementing a CRM program, a business can:
- Provide better customer service
- Turn customer satisfaction into customer loyalty
- Increase customer revenues
- Discover new customers
- Cross sell/Up Sell products more effectively
- Help sales staff close deals faster
- Make call centers more efficient
- Simplify marketing and sales processes
The types of data CRM projects collect:
- Responses to campaigns
- Shipping and fulfillment dates
- Sales and purchase data
- Account information
- Web registration data
- Service and support records
- Demographic data
- Web sales data
A CRM strategy includes many aspects which relate directly to one another:
- Front Office Operations
Direct interaction with customers such as face-to-face meetings, phone calls, e-mail correspondence, online services, etc.
- Back Office Operations
Functions that ultimately affect the activities of the front office such as invoicing, maintenance, planning, marketing, advertising, manufacturing, etc.
- Business Relationships
Interaction with other companies and partners such as suppliers, distributors, industry networks, etc. that support both front and back office activities.
- Analysis
Key CRM data can be analyzed to plan target-marketing campaigns, develop business strategies and evaluate the success of CRM activities such as market share, number and types of customers, revenue, and profitability.
CRM systems support business growth in two critical ways. First, they allow sales and support personnel to easily gather detailed information about individual customer needs and enable them to offer custom products and services that the customer can’t find anywhere else. Secondly, historical information analysis provides insight into customer behavior on a broad scale. For example, knowing that customers who buy central vacuum systems also purchase hand-held, cordless vacuum cleaners can help a retailer target specific marketing efforts. These correlations aren't always evident, so analysis and data mining can uncover information about customer behavior that can greatly benefit the business.
Finally, call-centre and customer care applications empower businesses to deliver highly customized services. By knowing the details of a customer's background, product configuration, service history and satisfaction, customer service representatives can approach each customer interaction on a more personal basis.
CRM is generally considered a software “solution.” However, software alone cannot create a successful CRM strategy. CRM initiatives often fail because implementation was limited to just the software installation without providing the context, support and training for employees to learn, and take full advantage of, the information systems. To be successful, a CRM implementation must be adopted throughout the entire organization as a customer-centric strategy for doing business; supported by software.
From the early database-oriented sales-force automation applications, CRM systems have matured to include data mining, dashboards, alerts, multimedia, e-mail integration, free-form text analysis and other sophisticated features. Recently, CRM tools have started to leverage social media features to build online communities of customers, partners and suppliers. While still in the early stages, these tools point the direction that CRM is evolving toward.
The best CRM systems enable businesses to extend their capabilities as circumstances demand, and to customize the solution to their particular industry. When integrated with core financial systems, Internet commerce servers and customer contact centre software, robust CRM systems can provide a 360-degree view of the customer, allowing a business to track every customer touch-point to build a detailed profile of each customer and deliver a much more targeted set of goods and services.