CRM is business strategy that goes beyond increasing transaction volume. Its objectives are to increase profitability, revenue and customer satisfaction. To achieve CRM, a company wide set of tools, technologies and procedure promote the relationship with the customer to increase sales.
CRM involves various components and sub systems to perform and effectively. It performs various functions such as marketing, manufacturing customer service, field sales etc. All these functions of CRM system directly or indirectly involve the participation of customers with the organization in order to ensure quality service delivery.
Elements of CRM
CRM Comprises of Serval Components which are essential to the organization. The components of CRM are:
1. People Management:
Effective use of people in the right place at the right time is called people management. It is very essential the job roles assigned to the employee are in accordance to their skills and capabilities. At the initial stage, an effective people strategy is adopted and followed by work force analysis. The analysis of work force includes the analysis of their skills and development. Finally, the strategy which would be required for the development and change is set down and implemented.
2. Lead Management:
Keeping a track of sales leads and its distribution is the essence of lead management. The benefits of lead management are directly available to the sales, call center and marketing industries. The activities involved in lead management relate to market campaign, making customized forms, mailing lists etc. These activities are performed with a view, to capture maximum sales leads which would add to the sales. This can be achieved through a comprehensive study to purchase the patterns, patterns of the customers and the identification of potential sales leads.
3. Sales force automation:
Sales force automation (SFA) is the most essential component of CRM. It is used by almost all organization. It is a software solution that includes forecasting, tracking potential customers, interaction with customers and processing sales. It helps in identifying revenue possibilities. SFA includes opportunity management i.e. supporting sales methodologies and provide interconnection with other functions to the company. The sales force automation has the capability to perform correct management, activity management, document management, order management, sales analysis and product configuration.
4. Customer Service:
Customer service is also an important CRM because CRM focus on comparison of customer data, gathering information related to their purchase patterns. CRM also provides this information to every department that requires it. Therefore, sales, marketing and personnel department are able to gain in their knowledge of the customer. This enables the organization to provide suitable solution to every customer. Thus, enhances the retention of customers and their loyalty.
It involves the promotional activities that are involved in promoting a product. It may be aimed to the general public or to a specific group. CRM facilitates in increasing the effectiveness of marketing by studying the potential targeted customers.
6. Work flow automation:
Work flow automation is a very productive component of customer relation management. Work flow process mainly includes the streamlining of process which ultimately help in reducing cost. Work flow automation saves time and energy of several people doing the same job again and again. It relieves work force from unnecessary tasks. It avoid paper work. This process also includes the integration of people and processes, so that they work in harmony achieving a common objective. This whole process of work automation saves time, money and effort.
7. Business Reporting:
CRM plays an important role by providing reports on the business. Business reporting simply means the ability to identify the exact position of your company at any given point of time. Business reporting as a component of CRM serves the benefit of instant access to information at any given point of time. It also ensures accurate information. This component of CRM helps in exporting these reports to different systems and also helps in comparison of historical data.
Analytics is the study. The data is studied so that information can be used to study the market trends. Historical and current data help in the creation of charts and diagrams which ultimately facilitates a complete trend study. Analytics is an essential and pivotal part of CRM because it enables study of data which can be used further to make an estimate of the business conditions at any given point of time.
CRM process can be defined as any group of action that is instrumental in the achievement of the output of an operational system, in accordance with a specific measure of effectiveness. CRM is a process of acquiring, retaining and partnering with selective customers for creating superior value for the company and the customer. The need to set up a CRM process may arise because of the growth in the business or for the proper management of customers.
The CRM process involves the following five steps:
Identifying Target Market and Value proposition
Defining Overall Strategy
Deciding on Customer Handling
Selection of a Software for Performance Management
1) Identifying the target market and value proposition:
This is the first step in establishing a CRM process, for effective results, the target market must be clearly defined. The definition of target market will depend on psychographics, demographics tastes and preferences of the customers. These factors would include age, sex, religion, interest, and perception of the customers. Efforts should be made to offer a clear value proposition. A value proposition is a promise of a value which will be delivered by vendors. It is specifically targeted towards potential customers. It is defined and designed to convince customers that a particular product or service will add more value than competitive set of products.
For Example: We can make a list of customer’s profiles in the order of their priority.
A. "A" would be the most valuable customer.
B. Second priority and so on.
Customer priority list in a CRM process would look like:
Customer A- Past/Repeat buyers (75%) and their conversation rate will be the highest
Customer B- Subscribers to Email list (34%)
Their conversation rate will be less than the above.
Customer C- Website traffic or walk in customers.
Their conversation rate will be very less (approx. 15%)
Here conversation rate means the percentage of visitors who take a desired action to buy a product or avail a service.
Conversation Rate = Number of purchases/Visits
Different customers may have different value propositions, but it’s very important to know the interest of customers. This would ensure the success of a CRM process.
2: Defining The Overall CRM Strategy And Consider Costs.
This step involves the selection of a customer relationship strategy. The choice of strategy would be based on the type of customer service to be offered by the business. It would also include the decision relating to the type of relationship management that would work better for the business and the customers. There are various strategies available for a customer relationship manager. The CRM process can be co-created with the help of customers. The business can have a dedicated online CRM community or may also involve the handling of customers with hands on assistance i.e. the traditional way of dealing with customers.
3: The Way Of Handling Each Customer Type Should Be Defined.
This step involves the manner in which each type of customer is to be handled throughout the CRM process. This can be done with the help of customer profiles in priority from step 1 and the customer service strategies in step 2.
4. Selection of a CRM Software for The Measurement of Performance.
Every organization, whether big or small will install a CRM SOFTWARE to measure the performance of its strategy. A CRM software helps in reducing the complexity of the process. Each software provides a definite solution. The best CRM software solutions include SAAS (software as a service delivered online), and innovations in Thai area improve regularly. This ensures that there is no need of an in-house IT team and server space which would have been expensive.
RE-ENGAGE CUSTOMERS. Customer engagement is a complex and never-ending task. Customers should be regularly engaged in the organizations products and services. This will help in creating a reminder in the minds of customers. Re-engaging of customers positively in the business is utmost important and yields excellent results. Following are the three most used forms of customer’s re-engagement in the CRM PROCESS: -Customer satisfaction surveys -E-mails. -Social media.
FOUR C’s OF THE CRM PROCESS
This element of the CRM process includes a series of transactions and interactions that take place between the customer, channel, end user and an organization. The data should be collected from all the contact points and also involves communication outside the organization. The information collected from all the sources will provide a better understanding of the customers.
This element of the CRM process includes the mapping and management of the interaction point’s beta customer and the organization. The points of interaction should be carefully managed to ensure the achievement of the goal, for which CRM is processed in an organization.
The capture and analysis of the detailed information helps in getting an insight which helps an organization in creating a continuous learning about customer products, channels, markets and competition from the data warehouse and knowledge base. The overall learning is available through the analysis of the information available.
The insights available in the cognize element can be applied to create relevant interaction or communication with consumers, channels, suppliers and partners that help building a value relationship.