Customer Relationship Management
- 2What is Customer Relationship Management?
- 4Key Elements of CRM
- 5CRM Building Blocks
- 6Implementation of a CRM System
- 7Advantages of CRM
- 8The Types of data, CRM software collects
- 9Disadvantages of CRM Systems
- 11Different levels of eCRM
- 12Implementing and integrating CRM solutions
When company communicates its customers the process can involve many different people within both organizations using a variety of different methods. CRM is the acronym for the term “Customer Relationship Management”. The main tool that is used is an order that is communicated by company’s customer to its sales department. However this is only one of many communications that should be managed. To ensure that company can provide the best customer service experience possible the use of customer relationship management (CRM) software should be considered.
Typical CRM software will allow company to track and organize its contacts with its current and prospective customers. The software allows your employees to store information about customers and customer interactions which then can be accessed by employees in different departments within company.
There are three areas which in general company interacts with its customers.
Front Office Contacts
These involve the direct contact your employees have with your customers which can include phone calls, e-mail, instant messages and face to face communication.
Back Office Operations
These are processes that are used to facilitate the front office, such as finance communications, marketing, customer billing and advertising.
Your employees will interact with customers and suppliers through networking, industry events and trade associations.
Customer Relationship Management refers to the methodologies and tools that help businesses manage customer relationships in an organized way.
Customer relationship management is a broadly recognized, widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support.
The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. With an effective CRM strategy, a business can increase revenues by:
- providing services and products that are exactly what your customers want
- offering better customer service
- cross selling products more effectively
- helping sales staff close deals faster
- retaining existing customers and discovering new ones
- make call centers more efficient
- simplify marketing and sales processes.
For small businesses, customer relationship management includes:
- CRM processes that help identify and target their best customers, generate quality sales leads, and plan and implement marketing campaigns with clear goals and objectives.
- CRM processes that help form individualized relationships with customers (to improve customer satisfaction) and provide the highest level of customer service to the most profitable customers.
- CRM processes that provide employees with the information they need to know their customers' wants and needs, and build relationships between the company and its customers.
Customer relationship management tools include software and browser-based applications that collect and organize information about customers. For instance, as part of their CRM strategy, a business might use a database of customer information to help construct a customer satisfaction survey, or decide which new product their customers might be interested in.
CRM can be broken down into a number of different components which many software vendors have developed packages for. For the most part, there are three areas which are core to successful customer relationship management :
- Customer Service
- Sales Force Automation
- Campaign Management .
The customer service function in your company represents the front office functions that interact with your customers. These are the business processes that allow your company to sell products and services to your customers, communicate with your customers with regards marketing and dealing with the after sales service requirements of your customers. Each interaction with the customer is recorded and stored within the CRM software where it can be retrieved by other employees if needed.
Sales Force Automation
Your company’s sales department is constantly looking for sales opportunities with existing and new customers. The sales force automation functionality of CRM software allows the sales teams to record each contact with customers, the details of the contact and if follow up is required. This can provide a sales force with greater efficiencies as there is little chance for duplication of effort. The ability for employees outside of the sales team to have access to this data ensures that they have the most recent contact information with customers. This is important when customers contact employees outside of the sales team so that customers are given the best level of customer service.
The sales team approach prospective customers in the hope of winning new business. The approach taken by the sales team is often focused in a campaign, where a group of specific customers are targeted based on a set of criteria. These customers will receive targeted marketing materials and often special pricing or terms are offered as an inducement. CRM software is used to record the campaign details, customer responses and analysis performed as part of the campaign.
In today's fast-paced, competitive business environment it's more important than ever to create and maintain long-lasting business relationships.
Today, CRM manages business processes spanning sales, support, and marketing creating effective customer interactions. Given the purpose of CRM, the functionality is straightforward, and the benefits of successful deployments clearly generate value and profitability for any company. Great CRM solutions need to encourage users to interact with the application as well as be in-tune with the business and IT cost-saving needs.
For the up to date CRM to be world class it needs to be revolutionary in market incursion and evolutionary in technological up gradation.
Today the major business focus is towards endowing value addition to the sales cycle, and customer retention rather than constructing a new customer base which is costlier and also an uncertain chase from business perspective. The basic philosophy behind CRM is that a company's relationship with the customer would be the biggest asset in the long run.
Before implementing any Customer Relationship Management solution in the organization there are many Question's which need a comprehensive explanation from the users' point of view
- What is the added value preposition of the CRM to the organization?
- What would be the environment under which the implementation would be done?
- How would the synergies be reflecting in the processes of the company?
These are mere stencils of the holistic scenario prevalent right now, and are to a great extent a factor which harms the opportunities of long term survival for any CRM vendor.
Below are listed the following building blocks for successful CRM projects:
The board must take leadership in creating a CRM vision for the enterprise. The CRM vision should be used as the guide to the creation of a CRM strategy.
The CRM strategy is all about how to build and develop a valuable asset: the customer base. It must set objectives and metrics for attaining that goal. It directs the objectives of other operational strategies and the CRM implementation strategy.
The customer experience must be designed in line with the CRM vision and must be constantly refined, based on actively sought customer feedback.
Changes to organizational structures, processes, metrics, incentives, skills, and even the enterprise culture must be made to deliver the required external customer experience. Ongoing change management will be key.
Successful customer process reengineering should create processes that not only meet customers' expectations and support the customer value proposal, but also provide competitive differentiation and contribute to a designed customer experience.
Successful CRM demands the creation of a customer-information blood supply that flows around the organization, as well as tight integration between operational and analytical systems.
CRM technologies form a fundamental part of any enterprise's application portfolio and architecture. CRM application needs should be considered as the provision of integrated functionality that supports seamless customer-centric processes across all areas of the enterprise and its partners.
Enterprises must set measurable CRM objectives and monitor all levels of CRM indicators to turn customers into assets. Without performance management ,a CRM implementation will fail.
The above building blocks are part of the strategy framework to help organizations go through the important CRM journey. However, successful implementation and using the CRM solution to benefit the business depends largely on the people (from senior management down) within the organization to truly adopt and embrace it.
The keys to successful CRM implantation are the followings:
- Develop your customer-focused strategy first before considering what kind of technology you need.
- Break your CRM project down into manageable pieces by setting up pilot programs and short-term milestones. Start with a pilot project that incorporates all the necessary departments but is small enough and flexible enough to allow tinkering along the way.
- ·Make sure your CRM plans include a scalable architecture framework. Think carefully about what is best for your enterprise: a solution that ties together “best of breed” software from several vendors via Web Services or an integrated package of software from one vendor.
- Don't underestimate how much data you might collect (there will be LOTS) and make sure that if you need to expand systems you'll be able to.
- Be thoughtful about what data is collected and stored. The impulse will be to grab and then store EVERY piece of data you can, but there is often no reason to store data. Storing useless data wastes time and money.
By using CRM methodology, an enterprise can:
- Provide better customer service
- 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.
CRM software collects the following types of data:
- Responses to campaigns
- Sales and purchase data
- Account information
- Web registration data
- Service and support records
- Demographic data
- Shipping and fulfillment dates
- Web sales data.
While advantages usually outweigh disadvantages for most organizations implementing an CRM system, here are some of the most common obstacles experienced:
- Record Loss
- Require additional work inputting data
- Require continuous maintenance, information updating, and system upgrading costly
- Difficult to integrate with other management information systems.
As the internet is becoming more and more important in business life, many companies consider it as an opportunity to reduce customer-service costs, tighten customer relationships and most important, further personalize marketing messages and enable mass customization. Together with the creation of Sales Force Automation (SFA), where electronic methods were used to gather data and analyze customer information, the trend of the upcoming Internet can be seen as the foundation of what we know as eCRM today.
We can define eCRM as activities to manage customer relationships by using the Internet, web browsers or other electronic touch points. The challenge hereby is to offer communication and information on the right topic, in the right amount, and at the right time that fits the customer’s specific needs.
Today's customers are a fast-moving, demanding crowd. They are looking for products and services that are proven yet innovative. They want information at their fingertips. With the right CRM solutions in place, we can help organizations to build and nurture lasting one-on-one relationships with customers. Thus, it enhances the business efficiencies and profitability.
In defining the scope of eCRM, three different levels can be distinguished:
This includes the minimum necessary services such as web site effectiveness and responsiveness as well as order fulfillment.
These services include order tracking, product configuration and customization as well as security/trust.
These are extra services such as online auctions and online training and education.
Self-services are becoming increasingly important in CRM activities. The rise of the Internet and eCRM has boosted the options for self-service activities. A critical success factor is the integration of such activities into traditional channels. CRM activities are mainly of two different types.
Reactive service is where the customer has a problem and contacts the company.
Proactive service is where the manager has decided not to wait for the customer to contact the firm, but to be aggressive and contact the customer himself in order to establish a dialogue and solve problems.
Several CRM software packages exist that can help companies in deploying CRM activities. Besides choosing one of these packages, companies can also choose to design and build their own solutions. In order to implement CRM in an effective way, one needs to consider the following factors:
- Create a customer-based culture in the organization.
- Adopt customer-based managers to assess satisfaction.
- Develop an end-to-end process to serve customers.
- Recommend questions to be asked to help a customer solve a problem.
- Track all aspects of selling to customers, as well as prospects.
Furthermore, CRM solutions are more effective once they are being implemented in other information systems used by the company. Examples are Transaction Processing System (TPS) to process data real-time, which can then be sent to the sales and finance departments in order to recalculate inventory and financial position quick and accurately. Once this information is transferred back to the CRM software and services it could prevent customers from placing an order in the belief that an item is in stock while it is not.