Customer Relationship Management (CRM)

Customer Relationship Management (CRM)
From first contact with a prospect to servicing a long-time account, customer relationship
management (CRM) helps businesses succeed with almost every aspect of working with
customers. Customer Relationship Management (CRM) in a very broad way can be defined as
the efforts made towards creating, developing, and maintaining a healthy and long-lasting
relationship with the customers using technology.
“Successful CRM is about competing in the relationship dimension. Not as an

alternative to having a competitive product or reasonable price, but as a
differentiator. If your competitors are doing the same thing as you are (as they
generally are), product and price won’t give you a long-term, sustainable
competitive advantage. But if you can get an edge based on how customers feel
about your company, it’s a much stickier–sustainable–relationship over the long
haul.”
− Bob Thompson, CustomerThink Corporation
Business people started using the term Customer Relationship Management (CRM) since the
early 1990s when the concept of business started to change from being transactional to relational.
CRM directly contributes towards customer benefits and the growth of businesses.Information
Technology plays a very critical role in identifying, acquiring, and retaining the customers, and
thereby managing a healthy relationship with them.
What is CRM?
There can be multiple definitions of CRM from different perspectives −
 From the viewpoint of the Management, CRM can be defined as an organized approach
of developing, managing, and maintaining a profitable relationship with customers.
 By equating the term with technology, the IT organizations define CRM as a software that
assists marketing, merchandising, selling, and smooth service operations of a business.
 As per Franics Buttle, World’s first professor of CRM, it is the core business strategy that
integrates internal processes and functions, and external networks, to create and deliver
value to a target customer at profit. It is grounded on high quality customer data and
information technology.
The primary goal of CRM is to increase customer loyalty and in turn improve business
profitability.
Ingredients of CRM
Take a look at the following illustration. It shows the ingredients that work together to form a
successful CRM system.
 Analytics − Analytics is the process of studying, handling, and representing data in

various graphical formats such as charts, tables, trends, etc., in order to observe market
trends.
 Business Reporting − Business Reporting includes accurate reports of sales, customer

care, and marketing.
 Customer Service − Customer Service involves collecting and sending the following
customer-related information to the concerned department −
o Personal information such as name, address, age

o Previous purchase patterns.
o Requirements and preferences.
o Complaints and suggestions.
 Human Resource Management − Human Resource Management involves employing
and placing the most eligible human resource at a required place in the business.
 Lead Management − Lead Management involves keeping a track of the sales leads and
distribution, managing the campaigns, designing customized forms, finalizing the mailing
lists, and studying the purchase patterns of the customers.
 Marketing − Marketing involves forming and implementing sales strategies by studying

existing and potential customers in order to sell the product.
 Sales Force Automation − Sales Force Automation includes forecasting, recording sales,
processing, and keeping a track of the potential interactions.
 Workflow Automation − Workflow Automation involves streamlining and scheduling

various processes that run in parallel. It reduces costs and time, and prevents assigning the
same task to multiple employees.
Objectives of CRM
The most prominent objectives of using the methods of Customer Relationship Management are
as follows −
 Improve Customer Satisfaction − CRM helps in customer satisfaction as the satisfied

customers remain loyal to the business and spread good word-of-mouth. This can be
accomplished by fostering customer engagement via social networking sites, surveys,
interactive blogs, and various mobile platforms.
 Expand the Customer Base − CRM not only manages the existing customers but also
creates knowledge for prospective customers who are yet to convert. It helps creating and
managing a huge customer base that fosters profits continuity, even for a seasonal
business.
 Enhance Business Sales − CRM methods can be used to close more deals, increase sales,
improve forecast accuracy, and suggestion selling. CRM helps to create new sales
opportunities and thus helps in increasing business revenue.
 Improve Workforce Productivity − A CRM system can create organized manners of

working for sales and sales management staff of a business. The sales staff can view
customer’s contact information, follow up via email or social media, manage tasks, and
track the salesperson’s performance. The salespersons can address the customer inquiries
speedily and resolve their problems.
Evolution of Customer-Supplier Relationship

five phases through which a customer-supplier relationship evolves −
 Awareness − The parties come in contact with each other and see each other as a possible
customer or supplier.
 Exploration − The parties find out more about one another’s capabilities and business
prospects. Trial purchasing takes place and performance is assessed. If deal is not smooth
then the relationship terminates with the damage of less costs.
 Expansion − It is composed of attraction, communication, bargaining, development of

rules, and development of expectations from each other.
 Commitment − Trust begins to develop and deals are executed as per the norms and
expectations. Mutual understanding and cooperation develops, and number of transactions
start building up.
 Dissolution − Not all relationships can survive. Some relationships are terminated either
bilaterally (both parties agree to end) or unilaterally (one party decides to end). If it is
bilateral decision then both parties retrieve the invested amount and resources. Supplier
exits relationship in case of failure to contribute sales volume or profit. Customer ends
relationship unilaterally due to changes in product requirement, repeated servicing failure,
etc.
Approach towards Marketing/Customer Relationship

1. Networking
2. Cherish Each Customer
3. Listen to Your Customers
4. Build a Brand Identity
5. Communicate Often
Electronic Customer Relationship

Management (E-CRM)
Definition - What Does Electronic Customer Relationship Management (E-

CRM) mean?
Electronic customer relationship management (E-CRM) is the application of
Internet-based technologies such as emails, websites, chat rooms, forums and other
channels to achieve CRM objectives. It is a well-structured and coordinated
process of CRM that automates the processes in marketing, sales and customer
service.
An effective E-CRM increases the efficiency of the processes as well as improves
the interactions with customers and enables businesses to customize products and
services that meet the customers’ individual needs. Electronic customer
relationship management provides an avenue for interactions between a business,
its customers and its employees through Web-based technologies. The process
combines software, hardware, processes and management’s commitments geared
toward supporting enterprise-wide CRM business strategies.
Electronic customer relationship management is motivated by easy Internet access
through various platforms and devices such as laptops, mobile devices, desktop
PCs and TV sets. It is not software, however, but rather the utilization of Web-
based technologies to interact, understand and ensure customer satisfaction.
An effective E-CRM system tracks a customer’s history through multiple channels
in real time, creates and maintains an analytical database, and optimizes a
customer’s relation in the three aspects of attraction, expansion and maintenance.
A typical E-CRM strategy involves collecting customer information, transaction
history and product information, click stream and contents information. It then
analyzes the customer characteristics to give a transactional analysis consisting of
the customer's profile and transactional history, and an activity analysis consisting
of exploratory activities showing the customer's navigation, shopping cart,
shopping pattern and more.
The benefits of E-CRM include the following:
 Improved customer relations, service and support

 Matching the customers' behavior with suitable offers
 Increased customer satisfaction and loyalty
 Greater efficiency and cost reduction

 Increased business revenue
E-CRM software systems may contain a selection of the following

features:
i. Customer management:
Provides access to all customer information including enquiry status and
Correspondence
ii. Knowledge management:

A centralized knowledge base that handles and shares customer Information
iii. Account management:

Access to customer information and history, allowing sales teams and
customer service teams to function efficiently
iii. Case management:
Captures enquiries, escalates priority cases and notifies management of
unresolved issues
iv. Back-end integration:

Blends with other systems such as billing, inventory and logistics through
relevant customer contact points such as websites and call centers
v. Reporting and analysis:

Report generation on customer behavior and business criteria
Business Benefits of E-CRM:

Implementation of an E-CRM system enables an organization to streamline
processes and provide sales, marketing and service personnel with better,
more complete customer information. The result is that E-CRM allows
organizations to build more profitable customer relationships and decrease
operating costs.
Direct benefits of an E-CRM system include:

i. Service level improvements:
Using an integrated database to deliver consistent and improved customer
responses
ii. Revenue growth:

Decreasing costs by focusing on retaining customers and using interactive
service tools to sell additional products
iii. Productivity:
Consistent sales and service procedures to create efficient work processes
iv. Customer satisfaction:

Automatic customer tracking and detection will ensure enquiries are met and
issues are managed. This will improve the customer’s overall experience in
dealing with the organization.
v. Automation:
E-CRM software helps automate campaigns including:
(i) Telemarketing
(ii) Tele sales
(iii) Direct mail
(iv) Lead tracking and response
(v) Opportunity management
(vi) Quotes and order configuration

Customer Relationship Management (CRM)

Uploaded by

Copyright:

Available Formats

Customer Relationship Management (CRM)

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Customer Relationship Management (CRM)

Uploaded by

Copyright:

Available Formats

Customer Relationship Management (CRM)

“Successful CRM is about competing in the relationship dimension. Not as an

− Bob Thompson, CustomerThink Corporation

 Analytics − Analytics is the process of studying, handling, and representing data in

 Business Reporting − Business Reporting includes accurate reports of sales, customer

o Personal information such as name, address, age

 Marketing − Marketing involves forming and implementing sales strategies by studying

 Workflow Automation − Workflow Automation involves streamlining and scheduling

 Improve Customer Satisfaction − CRM helps in customer satisfaction as the satisfied

 Improve Workforce Productivity − A CRM system can create organized manners of

Evolution of Customer-Supplier Relationship

 Expansion − It is composed of attraction, communication, bargaining, development of

Approach towards Marketing/Customer Relationship

2. Cherish Each Customer

3. Listen to Your Customers

4. Build a Brand Identity

Electronic Customer Relationship

Definition - What Does Electronic Customer Relationship Management (E-

 Improved customer relations, service and support

 Greater efficiency and cost reduction

E-CRM software systems may contain a selection of the following

ii. Knowledge management:

iii. Account management:

iv. Back-end integration:

v. Reporting and analysis:

Business Benefits of E-CRM:

Direct benefits of an E-CRM system include:

ii. Revenue growth:

iv. Customer satisfaction:

(ii) Tele sales

(iii) Direct mail

(iv) Lead tracking and response

(v) Opportunity management

(vi) Quotes and order configuration

You might also like