Customer relationship management - Wikipedia, the free encyclopedia

Customer relationship management

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(Redirected from Customer relations)

For the archaeological concept, see cultural resource management

The generally accepted purpose of Customer Relationship Management (CRM) is to enable

organizations to better manage their customers through the introduction of reliable systems,
processes and procedures for interacting with those customers.

In today's competitive business environment, a successful CRM strategy cannot be implemented

by only installing and integrating a software package 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 relevant IT-systems (including soft- and maybe hardware) and/or usage of IT-
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-licences.

The term CRM is used to describe either the software or the whole business strategy (or lack of
one) oriented on customer needs. The main misconception of CRM is that it is only software,
instead of whole business strategy.

Major areas of CRM 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.

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Contents
1 Architecture of CRM
1.1 Operational CRM

1.2 Analytical CRM

1.3 Collaborative CRM

2 Improving customer service

3 Improving customer relationships
4 Technical functionality
5 Privacy and ethical concerns
6 Setting up a framework for CRM
7 CRM in Business
8 See also
9 External links

Architecture of CRM

There are three parts of application architecture of CRM:

1. operational - automation to the basic business processes (marketing, sales, service)

2. analytical - support to analyze customer behavior, implements business intelligence alike
technology
3. co-operational - ensures the contact with customers (phone, email, fax, web, sms, post, in
person)

Operational CRM

Operational CRM means supporting the so-called "front office" business processes, which include
customer contact (sales, marketing and service). Tasks resulting from these processes are
forwarded to employees responsible for them, as well as the information necessary for carrying
out the tasks and interfaces to back-end applications are being provided and activities with
customers are being documented for further reference.

Operational CRM provides the following benefits:

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Delivers personalized and efficient marketing, sales, and service through multi-channel
collaboration
Enables a 360-degree view of your customer while you are interacting with them
Sales people and service engineers can access complete history of all customer interaction
with your company, regardless of the touch point

According to Gartner Group, the operational part of CRM typically involves three general areas of
business:

Sales force automation (SFA): SFA automates some of the company's critical sales and
sales force management functions, for example, lead/account management, contact
management, quote management, forecasting, sales administration, keeping track of
customer preferences, buying habits, and demographics, as well as sales staff performance.
SFA tools are designed to improve field sales productivity. Key infrastructure requirements
of SFA are mobile synchronization and integrated product configuration.

Customer service and support (CSS): CSS automates some service requests, complaints,
product returns, and information requests. Traditional internal help desk and traditional
inbound call-center support for customer inquiries are now evolved into the "customer
interaction center" (CIC), using multiple channels (Web, phone/fax, face-to-face, kiosk,
etc). Key infrastructure requirements of CSS include computer telephony integration (CTI)
which provides high volume processing capability, and reliability.

Enterprise marketing automation (EMA): EMA provides information about the business
environment, including competitors, industry trends, and macroenviromental variables. It is
the execution side of campaign and lead management. The intent of EMA applications is to
improve marketing campaign efficiencies. Functions include demographic analysis,
variable segmentation, and predictive modeling occur on the analytical (Business
Intelligence) side.

Integrated CRM software is often also known as "front office solutions." This is because they deal
directly with the customer.

Many call centers use CRM software to store all of their customer's details. When a customer
calls, the system can be used to retrieve and store information relevant to the customer. By serving
the customer quickly and efficiently, and also keeping all information on a customer in one place,
a company aims to make cost savings, and also encourage new customers.

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CRM solutions can also be used to allow customers to perform their own service via a variety of
communication channels. For example, you might be able to check your bank balance via your
WAP phone without ever having to talk to a person, saving money for the company, and saving
you time.

Analytical CRM

In analytical CRM, data gathered within operational CRM are analyzed to segment customers or
to identify cross- and up-selling potential. Data collection and analysis is viewed as a continuing
and iterative process. Ideally, business decisions are refined over time, based on feedback from
earlier analysis and decisions. Business Intelligence offers some more functionality as separate
application software.

Collaborative CRM

Collaborative CRM facilitates interactions with customers through all channels (personal, letter,
fax, phone, web, e-mail) and supports co-ordination of employee teams and channels. It is a
solution that brings people, processes and data together so companies can better serve and retain
their customers. The data/activities can be structured, unstructured,conversational, and/or
transactional in nature.

Collaborative CRM provides the following benefits:

Enables efficient productive customer interactions across all communications channels

Enables web collaboration to reduce customer service costs
Integrates call centers enabling multi-channel personal customer interaction
Integrates view of the customer while interaction at the transaction level

Improving customer service

CRMs are to improve customer service. Proponents say they can improve customer service by
facilitating communication in several ways:

Provide product information, product use information, and technical assistance on web

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sites that are accessible 24 hours a day, 7 days a week.

Help to identify potential problems quickly, before they occur.
Provide a user-friendly mechanism for registering customer complaints (complaints that
are not registered with the company cannot be resolved, and are a major source of customer
dissatisfaction).
Provide a fast mechanism for handling problems and complaints (complaints that are
resolved quickly can increase customer satisfaction).
Provide a fast mechanism for correcting service deficiencies (correct the problem before
other customers experience the same dissatisfaction).
Identify how each individual customer defines quality, and then design a service strategy
for each customer based on these individual requirements and expectations.
Use internet cookies to track customer interests and personalize product offerings
accordingly.
Use the Internet to engage in collaborative customization or real-time customization
Provide a fast mechanism for managing and scheduling followup sales calls to assess post-
purchase cognitive dissonance, repurchase probabilities, repurchase times, and repurchase
frequencies.
Provide a fast mechanism for managing and scheduling maintenance, repair, and on-going
support (improve efficiency and effectiveness).
Provide a mechanism to track all points of contact between a customer and the company,
and do it in an integrated way so that all sources and types of contact are included, and all
users of the system see the same view of the customer (reduces confusion).
The CRM can be integrated into other cross-functional systems and thereby provide
accounting and production information to customers when they want it.

Improving customer relationships

CRMs are also claimed to be able to improve customer relationships . Proponents say this is so
because:

CRM technology can track customer interests, needs, and buying habits as they progress
through their life cycles, and tailor the marketing effort accordingly. This way customers
get exactly what they want as they change.
The technology can track customer product use as the product progresses through its life
cycle, and tailor the service strategy accordingly. This way customers get what they need
as the product ages.
In industrial markets, the technology can be used to micro-segment the buying centre and
help coordinate the conflicting and changing purchase criteria of its members.
When any of the technology-driven improvements in customer service (mentioned above)
contribute to long-term customer satisfaction, they can ensure repeat purchases, improve
customer relationships, increase customer loyalty, decrease customer turnover, decrease

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marketing costs (associated with customer acquisition and customer training), increase
sales revenue, and thereby increase profit margins.

Technical functionality

A CRM solution is characterised by the following functionality:

scalability - the ability to be used on a large scale, and to be reliably expanded to whatever
scale is necessary.
multiple communication channels - the ability to interface with users via many different
devices (phone, WAP, internet, etc)
workflow - the ability to trigger a process in the backoffice system, e. g. Email
Response, ...
assignment - the ability to assign requests (Service Requests, Sales Opportunities) to a
person or group.
database - the centralised storage (in a data warehouse) of all information relevant to
customer interaction
customer privacy considerations, e.g. data encryption and the destruction of records to
ensure that they are not stolen or abused

Privacy and ethical concerns

CRMs are not however considered universally good - some feel it invades customer privacy and
enable coercive sales techniques due to the information companies now have on customers - see
persuasion technology. However, CRM does not necessarily imply gathering new data, it can be
used merely to make "better use" of data the corporation already has. But in most cases they are
used to collect new data.

Some argue that the most basic privacy concern is the centralised database itself, and that CRMs
built this way are inherently privacy-invasive. See the commercial version of the debate over the
carceral state, e.g. Total Information Awareness program of the United States federal government.

Setting up a framework for CRM

When you start setting up your CRM segment for your business you first want to see what
profile aspects you feel are relevant to your business. Which information will provide you

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the keys to serve your customers in the best way possible? If you can look at your financial
history for this information then what would you have liked to know about your customers
in the past? What would have been the effects? And what information is not useful? Being
able to eliminate unwanted information is a big aspect in implementing your CRM systems
When designing your CRM's structure, always remember who your primary customers are.
You want to keep more extensive information on them because they are your high-margin
customers. You can keep less extensive details on the clients you identify as low-margin.

CRM in Business

In this day and age the use of internet sites and specifically e-mail, in particular, are touted as less
expensive communication methods, compared to traditional methods like telephone calls. This
revolutionary type of service can be very helpful, but it is completely useless if you are having
trouble reaching your customers. It has been determined by some major companies that the
majority of clients trust other means of communication, like telephone, more than they trust e-
mail. Clients, however, are not the ones to blame because it is often the manner of connecting with
consumers on a personal level making them feel as though they are cherished as customers. It is
up to the companies to focus on reaching every customer and developing a relationship.

CRM software can run your entire business. From prospect and client contact tools to billing
history and bulk email management. The CRM system allows you to maintain all customer
records in one centralized location that is accessible to your entire organization through password
administration. Front office systems are set up to collect data from the customers for processing
into the data warehouse. The data warehouse is a back office system used to fulfill and support
customer orders. All customer information is stored in the data warehouse. Back office CRM
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.

See also
List of CRM vendors
ITIL
Predictive dialer communicate with the customer
marketing

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telemarketing
customer experience management
sales force management system
information technology management
management information systems
management
Microenvironment
Software as a Service
On-demand
Vendor-independent solutions provider
Customer Reference Management
Call Center

External links
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Customer Relationship Management at the Open Directory Project

CRM Association
CRM Blog

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