| The generally accepted purpose of Customer Relationship Management (CRM) is to enable organizations to better serve its
customers through the introduction of reliable processes and procedures for interacting with those customers.
In today's competitive business environment, a successful CRM strategy cannot be implemented by only installing and
integrating a software package designed to support CRM processes. A holistic approach to CRM is vital for an effective and
efficient CRM policy. This approach includes training of employees, a modification of business processes based on customers'
needs and an adoption of relevant IT-systems (including soft- and maybe hardware) and/or usage of IT-Services that enable the
organization or company to follow its CRM strategy. CRM-Services can even redundantize the acquisition of additional hardware or
CRM software-licences.
The term CRM is used to describe either the software or the whole business strategy oriented on customer needs. The second one
is the description which is correct. The main misconception of CRM is that it is only software, instead of whole business
strategy.
Major areas of CRM focus on service automated processes, personal information gathering and processing, and self-service. It
attempts to integrate and automate the various customer serving processes within a company.
There are three parts of application architecture of CRM:
- operational - automation to the basic business processes (marketing, sales, service)
- analytical - support to analyse customer behaviour, implements business intelligence alike technology
- cooperational - ensures the contact with customers (phone, email, fax, web...)
Operational part of CRM typically involves three general areas of business. They are (according to Gartner Group) a Enterprise marketing automation (EMA), Sales force automation (SFA) and a Customer
service and support (CSS). The marketing information part provides information about the business environment, including
competitors, industry trends, and macroenviromental
variables. The sales force management part automates some of the company's sales and
sales force
management functions. It keeps track of customer preferences, buying habits, and demographics, and also sales staff performance. The customer service part automates some service requests,
complaints, product returns, and information requests.
Integrated CRM software is often also known as "front office solutions."
This is because they deal directly with the customer.
Many call centers use CRM software to store all of their customer's
details. When a customer calls, the system can be used to retrieve and store information relevant to the customer. By serving the
customer quickly and efficiently, and also keeping all information on a customer in one place, a company aims to make cost
savings, and also encourage new customers.
CRM solutions can also be used to allow customers to perform their own service via a variety of communication channels. For
example, you might be able to check your bank balance via your WAP phone without ever having
to talk to a person, saving money for the company, and saving you time.
Improving customer service
CRMs are claimed to improve customer service. Proponents say they can improve customer service by facilitating communication
in several ways:
- Provide product information, product use information, and technical assistance on web sites that are accessible 24 / 7
- Help to identify potential problems quickly, before they occur
- Provide a user-friendly mechanism for registering customer complaints (complaints that are not registered with the company
cannot be resolved, and are a major source of customer dissatisfaction)
- Provide a fast mechanism for handling problems and complaints (complaints that are resolved quickly can increase customer
satisfaction)
- Provide a fast mechanism for correcting service deficiencies (correct the problem before other customers experience the same
dissatisfaction)
- Identify how each individual customer defines quality, and then design a service strategy for each customer based on these
individual requirements and expectations
- use internet cookies to track customer interests and personalize product offerings accordingly
- use the internet to engage in collaborative customization or real-time customization
- Provide a fast mechanism for managing and scheduling followup sales calls to assess post-purchase cognitive dissonance,
repurchase probabilities, repurchase times, and repurchase frequencies
- Provide a fast mechanism for managing and scheduling maintenance, repair, and on-going support (improve efficiency and
effectiveness)
- Provide a mechanism to track all points of contact between a customer and the company, and do it in an integrated way so that
all sources and types of contact are included, and all users of the system see the same view of the customer (reduces
confusion)
- The CRM can be integrated into other cross-functional systems and thereby provide accounting and production information to
customers when they want it
Improving customer relationships
CRMs are also claimed to be able to improve customer relationships . Proponents say this can be done by:
- CRM technology can track customer interests, needs, and buying habits as they progress through their life cycles, and tailor
the marketing effort accordingly. This way customers get exactly what they want as they change.
- The technology can track customer product use as the product progresses through its life cycle, and tailor the service
strategy accordingly. This way customers get what they need as the product ages.
- In industrial markets, the technology can be used to micro-segment the buying centre and help coordinate the conflicting and
changing purchase criteria of its members
- When any of the technology driven improvements in customer service (mentioned above) contribute to long-term customer
satisfaction, they can ensure repeat purchases, improve customer relationships, increase customer loyalty, decrease customer
turnover, decrease marketing costs (associated with customer acquisition and customer “training”), increase sales
revenue, and thereby increase profit margins.
Technical functionality
A CRM solution is characterised by the following functionality:
- scalability - the ability to be used on a large scale, and to be reliably expanded to what ever scale is necessary.
- multiple communication channels - the ability to
interface with users via many different devices (phone, WAP, internet, etc)
- workflow - the ability to automatically route work through the system to
different people based on a set of rules.
- database - the centralised storage (in a data warehouse) of all information
relevant to customer interaction
- customer privacy considerations, e.g. data encryption and the destruction of records
to ensure that they are not stolen or abused
Privacy and ethical concerns
CRMs are not however considered universally good - some feel it invades customer privacy and enable coercive sales techniques due to the information companies now have on
customers - see persuasion technology. However, CRM does
not necessarily imply gathering new data, it can be used merely to make "better use" of data the corporation already has. But in
most cases they are used to collect new data.
Some argue that the most basic privacy concern is the centralised database itself, and that CRMs built this way are inherently
privacy-invasive. See the commercial version of the debate over the carceral state, e.g. Total
Information Awareness program of the United States federal government.
Setting up a framework for CRM
- When you start setting up your CRM segment for your business you first want to see what profile aspects you feel are relevant
to your business. Which information will provide you the keys to serve your customers in the best way possible? You can look to
your financial history for this information what would you have liked to know about your customers in the past? What would have
been the effects? And what information is not useful? Being able to eliminate unwanted information is a big aspect in
implementing your CRM systems
- One idea is to keep in mind of who you are thinking of, you want to be more extensive on your information because these are
the high-margin customers. While you still want to keep you “low-margin” customers in mind you may not want to be so
extensive in your relationships with them.
CRM in Business
In this day and age the use of internet sites and specifically e-mail, in particular, are touted as less expensive
communication methods, compared to traditional methods like telephone calls. This revolutionary type of service can be very
helpful, but it completely useless if you are having trouble reaching your customers. It has been determined by some major
companies that the majority of clients trust other means of communication, like telephone, more than they trust e-mail. Clients,
however, are not the ones to blame because it is often the manner of connecting with consumers on a personal level making them
feel as though they are cherished as customers. It is up to the companies to focus on reaching every customer and developing a
relationship.
CRM software can run your entire business. From prospect and client contact tools to billing history and bulk email
management. The CRM system allows you to maintain all customer records in one centralized location that is accessible to your
entire organization through password administration. Front office systems are set up to collect data from the customers for
processing into the data warehouse. The data warehouse is a back office system used to fulfill and support customer orders. All
customer information is stored in the data warehouse. Back office CRM makes it possible for a company to follow sales, orders,
and cancellations. Special regressions of this data can be very beneficial for the marketing division of a firm.
CRM suppliers
Siebel Systems pioneered the CRM industry and is one of the largest
CRM vendors.
Many other companies supply CRM solutions, including:
There are many free and stable open source CRM projects at SourceForge.org (http://sourceforge.net/softwaremap/trove_list.php?form_cat=359), including:
- Sugarcrm (http://www.sugarcrm.com)
- XRMS (http://xrms.sourceforge.net)
These pay varying degrees of attention to usability, integration and privacy concerns - it
being widely acknowledged as impossible to fulfil all three constraints - thus it seems unlikely that any one vendor can dominate
in the near term.
External links
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