Customer Relationship Management (CRM) is a business strategy that enables organizations to get closer with their customers in order to serve their needs in a better way. Also to improve customer service, enhance customer satisfaction and thereby maximize customer loyalty and retention.
CRM is a business philosophy towards customers. It includes variety of technology employed for streamlining customer interaction to find, acquire and retain customers. CRM is a general strategy that allows companies to contact their customers in an efficient way. This contact can be frequent and regular as per situation. CRM involves the coordination of the organizations strategies its structures and cultures with customer database and IT of company in order to satisfy customer needs. CRM is a systematic technique to manage and enhance customer relationship and represents a holistic approach to business strategy.
CRM is made of 3 words:
Customers are the focal point of business transaction. The business runs for its customers, to satisfy their needs. Customer is the king. Survival of the company depends on its customers. Thus, CUSTOMER SATISAFACTION is a prerequisite for every organization.
“Customer” refers to an entity that acquires and uses goods and services. The customer plays a certain fixed amount for goods or services availed. He has the ability to choose between different service providers or product and supplier. For a company a customer maybe known as a buyer, purchaser , client per user or the product or services provided by the firm.
Relationship in terms of business means a state of involving mutual dealings between people. Interactions with the customers and prospects help in better understanding of their requirements. The frequency of interaction decided the strength of a relationship. Proper understanding of customers helps in building a strong business relationship.
In the context of CRM, management is referred as managing of customer interactions. Management aims at developing a customer-centric approach. It aims at mobilizing the entire organization towards management of all interactions with the customers. The wheel of CRM revolves around focusing on the needs of customer with a view to maximize customer satisfaction.
CRM is a philosophy and a business. Strategy, supported by a system and a technology designed to improve human interactions in a business environment. It is also a continuing business initiative that demands a dynamic, ongoing strategy of customer engagement.
CRM is not only a tool or an application but it’s a way of doing business
- CRM reduces cost on customer acquisition.
- CRM helps in improving customer support.
- CRM provides a centralized customer service interaction system.
- CRM leads to increased customer satisfaction.
- It helps in data sharing at organizational level.
- It helps in reaching at a high rate of customer retention.
- It provides opportunity to boost new business.
- It provides a 360 degree view of the business.
- CRM helps in achieving greater transparency of operations.
- It ensures automation and control of sales and marketing process.
- CRM helps in monitoring and forecasting of customer activities.
CRM involves various components and sub-systems to perform efficiently and effectively. It performs various functions such as marketing, customer services, field sales and filed services 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.
CRM comprises of several components which are essential to the organization of CRM which are:
1. People Management
Effective use of people in the right place at the right time. It is very essential that the job roles assigned to the employees are in accordance with their skills and capabilities.
2. Lead Management
Keeping a track of sales leads and its distribution is the essence of lead management. The activities involved in the lead management relate to market campaigns, marketing customized forms, mailing lists etc.
3. Sales force automation
It is a software solution that includes forecasting, tacking potential, interaction with customers and processing of sales.
4. Customer services
CRM focuses on comparison of customers data, gathering information related to their purchase patterns.
It involves promotional activities that are planned for promoting the product/service. It may be aimed to the general public or to a specific group.
6. Work flow automation
It mainly incudes the streamlining of processes which ultimately helps in reducing costs. It saves time and energy of the several people from doing the same job again and again.
7. Business Reporting
It means the ability to identify the exact position of your company at any given point of time.
It is the study of the data to understand the market trends. It enables careful understanding of data which can be further used make an estimate of the business conditions at any given point.
For an effective CRM, an organization must
- Understand- Who are its customers.
- Determine- What are their NEEDS?
- How to satisfy those needs?
- Deliver value to customers.
For a business, a CRM strategy is a large scale plan which would help in achieving goals of creating maintaining and expanding mutually beneficial customer relationships.
An organization can use certain specific procedures and tools to implement the strategy. These may include customer database, e-commerce customer interaction tools and customer satisfaction surveys. This would contribute in understanding the customers in a better way.
CRM helps the business to gain insight into the behavior of customers and the value those customers, with the help of technology and human resources. If a company adopts an effective CRM strategy, it can increase in the following ways-
- Fulfilling customer demands by providing them necessary products and services.
- By helping sales staff in closing deals quickly.
- Retaining existing customers and discovering new ones.
- Offering better customer service.
- By effectively cross-selling.
Knowing your customers better will enable an organization to serve them better and keep loyal.
The human resource and the technology used in the company to analyze the behavior of customers their value.
The main objective of the CRM process is to originate a powerful tool which would help in retaining the customers.
Every business defines their missions in terms of customer needs. Because customers Basic Needs do not change but the products that satisfy them do. Corporate focus on developing products that will satisfy customer needs ensures that the company stays in the forefront of the search for the new and effective solutions.
By doing so, such companies are likely to survive and grow despite strong competitions or adverse economic conditions.
Human Needs- Customer Needs are the basic of modern marketing. Needs are the essence of marketing concept.
But needs are never fully satisfied. Most people regularly seek companionship and approval from others to satisfy their social needs. Temporary goal achievement does not adequately satisfy the need for power and the individual strives ever harder to more fully satisfy that need.
To understand the Needs of customers, companies have various ways to interact with their customers like:
Electronic CRM makes use of Information Technology for managing relationships with customers.
ECRM offers sharing of e-info, the business processes helps in understanding customers needs and make efforts to fulfill them. This avoids redundancy and each time we need info, the customers are not bothered.
Analysis of a customers need and requirements helps in maintaining a long-term relationship with customers.
Improved communication technology has initiated the concept of implementing inter-organizational or intra-organizational departments which is facilitated by efficient sharing of information.
An ECRM solution gives companies more interactive and personalized way of handling customer relations. Customer satisfaction is the primary focus of most businesses today. The rapid growth in technology has also increased customer expectations interms of service quality.
Following are some applications for ECRM
A. Customer Analytical Software
It helps in predicting and interpreting customer behavior. Customer analytical software should integrate with customer-communication software so that the information collected can be used effectively.
B. Data Mining Software
It looks for hidden patterns in a group of data. Such types of software help in building predictive models that can be used to identify customer behavior.
C. Campaign Management Software
This type of application makes use of a data warehouse, where information from the different channels is collected together, to plan and execute different campaigns.
D. Business Simulation
This is used in conjunction with campaign management software and helps in comparing planned costs and projections with actual results.
E. Real-Time decision engine
It helps in coordinating and synchronizing communication across various customer touch points.
An integrated application suite is the set of applications that employs a common architecture and uses a common logical database. An integrated application bundle is set of interfaced applications from a single vendor containing more than one technical architecture or more than logical database.
An interfaced best-of-breed solution is set of applications from multiple clients to work together. An enterprise selects solutions depending on its individual’s needs.
A good CRM should contact the customers to ensure that they are satisfied and functioning. Companies should make efforts to arrange for post-implementation support, for as they will provide a feedback of the process conducted.