CRM is the accepted purpose of Customer Relationship Management is to enable organizations to better manage their customers through the introduction of reliable processes and procedures for interacting with those customers. In today's competitive business environment, a successful CRM software solution cannot be implemented by only installing and integrating CRM software application 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 a relevant IT CRM system (including software and maybe hardware) and/or usage of IT CRM Services that enable the organization or company to follow its CRM strategy. CRM Services can even replace the acquisition of additional hardware or CRM software application licences.
The term CRM "Customer Relationship Management" is used to describe either the "CRM software" or the whole business strategy (or lack of one) oriented on customer needs. The second one is the description which is correct. The main misconception of "CRM" is that it is only a software solution application, instead of whole business strategy. Major areas of CRM Software System Solutions 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.
A CRM software solution application can manage and run your entire business. From prospect and client contact tools to billing history and bulk email management. The software CRM Sosystem allows you to maintain all customer records in one centralized location that is accessible to your entire organization through password administration.
A front office CRM software system is set up to collect data from the customers for processing into the data warehouse. The data warehouse is a back office CRM Software system used to fulfill and support customer orders. All customer information is stored in the data warehouse. A back office CRM software application 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.A integrated CRM software system is often also known as "front office solutions." This is because they deal directly with the customer.
What is Customer Relationship Management (CRM)?
Customer Relationship Management (CRM) is a phenomenon that is becoming a major discipline within business. CRM can be traced back to the airlines' attempt to gather information about their customer flying habits in order to stop their high-fare airliners choosing low-fare carriers, however, the concept was invented even further back, when the shop owner knew all his customers by first name and they knew his name. In 1998 The Economist Intelligence Unit (EIU) in conjunction with Andersen Consulting published the result of a CRM survey of different companies around the world. The survey revealed a new heightened focus on CRM as a discipline, where companies increased their customer focus and using a process approach to customer relationship management. This was a market shift from the traditional transaction-based and functionally managed approach where the relationship with customer was divided up and dealt with by different departments. The EIU report also showed that between 1994 and 1997 the spending on customer relationship management software and services grew from $200 million to $1.1 billion in the USA. The EIU report is one of many investigations that indicate a growing interest in CRM and some literature concerning CRM even postulate that companies will have to adapt it to survive.
Several researchers define CRM differently. Couldwell defines CRM as:
"Customer relationship management is a combination of business process and technology that seeks to understand a company's customer from the perspective of who they are, what they do, and what they like"
and Hobby, defines CRM as:
"A management approach that enables organisations to identify, attract and increase retention of profitable customers by managing relationships with them".
However, I have found the following definition of CRM, to be the most adequately:
"CRM is a business strategy - an attitude to employees and customers - that is supported by certain processes and systems. The goal is to build long-term relationships by understanding individual needs and preferences - and in this way add value to the enterprise and the customer".
This definition places the strategy of adding value to the customer in the focus, whereas the first mentioned definition gives technology and processor first priority. As the chosen definition explains, the systems and processes are vital support elements in creating value for the customer. The second-mentioned definition is found to be somewhat thin and practical useless but it notice an important aspect of CRM, that the organisation has to learn how to listening to customers. In the definition, CRM is defined as a business strategy. This is an important aspect, as CRM is not to be seen as a concept or a project but as a business strategy, which affects all parts of the company.
CRM is about identifying, retaining, and maximising the value of a company's customers. CRM is a sales- and service business strategy where the organisation wraps itself around the customer, so that whenever there is an interaction, the information exchanged is relevant for that customer. This means knowing all about that customer and what the profitability of that customer is going to be. CRM is an effort to create the whole picture of a given customer, bringing together consistent, comprehensive and credible information on all aspects of the existing relationship, such as profitability information, risk profiles and cross-sell potential.
To keep customers satisfied and make them return, CRM, as a strategy, is not a new phenomenon. Every company wants profitable and loyal customers. The new aspect is that companies start to measure this profitability and loyalty and use this information to segment customers and develop strategies for approaching these customers.
However, before implementing CRM, companies need to have some basic foundations settled. First of all, the basic quality of the products has to be in order, i.e. if the product does not live up to the expectations of the customer, he will not be satisfied, hence loyal for long. The typical strategies prior to CRM are quality control systems such as Total Quality Management (TQM). Secondly, companies also have to know more about their customers before implementing CRM. I.e. they have to evaluate, which customers are most valuable in terms of profitability, loyalty and future expectations. Thirdly, the companies have to have the necessary technology to enable the employees to access information about customers in order to offer customers the best service. Finally, CRM needs full support from the management of the company to stand a chance of success.
CRM - Its Relevance
In today's demanding economy, the first line of any business during economic uncertainty is to get closer to the customer. Customers often want information along with a quote or invoice on the spot. With lack of information, the customers do not fix loyalty to a particular product or service and tend to depend on impulse decision. The companies are no exception to this. In the process "hot prospects" turn ice cold. Speed of information flow and speed of converting information into prospect are vital factors for survival. So access to data is a must. E-business has revolutionized the way for business to interact with customers.
What is CRM?
Business's effort to get closer to a customer is considered Customer / Constituent Relationship Management (CRM). CRM is a concept that combines management thought and business practices. CRM is about developing, implementing business strategies through supporting technologies to narrow down the gap between an organization's current and potential performance in terms of customer acquisition, growth, and retention. The sole purpose of CRM is to connecting the company to its customers and providing direct support. It is an effort of the business to personalize, source business intelligence and warehousing customers' requirements.
CRM is re-designing of functional activities to drive the process of re-engineering. Its focus is on managing and optimizing the entire customer life cycle. Customer / Constituent Relationship Management (CRM) encompass the totality of the business processes that an organization performs to identify, select, acquire, develop and retain its customers. CRM encompass a wide breadth of functionality. CRM improves Return on Assets. The asset in this case is the customer and potential customer base. In other words, Customer / Constituent Relationship Management (CRM) refer to management of all interactions with the customer that an enterprise indulges in.
Today, enterprises are finding that they no longer have the initiative. Customers are now empowered by ready access to information and have greater access to businesses than ever before they are demanding. It is essential to excel with each customer by sales, service agents, traditional face-to-face interaction, while contacting by phone, fax, and e-mail correspondence.
Management is interested in improving productivity, profitability and enhancing management/operational information and reduction in cost of handling customers. The organisation is interested in high powered continuous information for analysis. CRM aims in improving the ability to plan and use finite resources, increase customer support, improve the customer experience, improve morale for customer support personnel and reduce the cost of providing service and support. CRM integrates all the different requirements of different functions to that of customer's requirements by co-coordinating and unifying all points of interaction to provide a big and better picture on customer satisfaction. This functionality is portrayed as:
o CRM (Customer / Constituent relationship management),
o CRM process management, and
o CRM access management.
CRM is critical to all industries, a dominant business driver. CRM based business objectives are for improving customer service, enhancing customer relationships and reducing distribution (channel) costs. Customer / Constituent Relationship Management (CRM) helps an enterprise build a database about its customers. Therefore, management, and functionaries of management could access information about all areas for value addition.
Benefits of CRM
o To develop and design strategy for their business
o To develop business intelligence
o To develop innovative solution
o To improve customer service relationships as a competitive differentiator.
o To integrate customers' view in changing market conditions
o To achieve business objectives, increase service level commitment
o To provide investment protection by increasing profitability, productivity & cost reduction.
o To re-engineer business strategies.
o To transform business.
o To transform to a common form of user interaction with the enterprise.
o To identify primary determinants of loyalty.
o To understand the reason why customers defect.
Hurdles in implementation:
o Lack of awareness,
o Slow adoption rate,
o Lack of proper databases
o Usage of old processes
o Implementation of CRM in a phased manner.
o CRM is seen only as a technology that automates certain processes
o Lack of understanding of the concept
There are many reasons why CRM has not taken a leap. Though there are technologies and systems to gather useful information about their customers, they either not use the system to collect information or do not use the collected information. CRM solutions are seen among many as just a software packages for call centre management and not as a strategic initiative to customer relationship management.
An effective CRM is the one that enables an organization to easily gather critical information that becomes a valuable resource for improving both the top (revenue) and the bottom (profit) lines. The top line is improved by increasing sales through better data management, and improving marketing effectiveness by collecting, analyzing, and using valuable customer information. The bottom line is improved by reducing service times and costs, and by improving the general productivity of the staff.