Customer Relationship Management

Customer Relationship Management, or CRM, is a business strategy designed to improve profitability, revenue, and customer satisfaction. CRM provides an integrated approach to identifying, acquiring, retaining and managing customers. For most organizations, CRM is usually implemented through a software package - such as a database linked to a web interface - designed to support these processes.

CRM is about organizing and streamlining of processes and information. CRM enables companies to quickly and easily get and provide access to all aspects of business management and customer interactions, and also allows customers to quickly and easily find and use information on their own. By streamlining aspects of vendor-client interactions, CRM helps organizations manage and coordinate their businesses efficiently, as well as provide excellent customer service.

No longer just for tech companies, industries such as the pharmaceutical, automotive, construction, and airline industries have been implementing CRM to manage all aspects of business and customer managment. Hospitals, banks, and educational institutions are are also using CRM to manage qualitative data - such as a customer's favorite products and testimonials or a patient's history - making it easier to respond quickly and easily to individual customer needs without having to look through files or records.

CRM makes it easier for businesses large and small to manage the vast amounts of information that running a business in today's world produces. CRM packages are highly customizable and are tailored to each organization's individual needs for data and resource management. CRM vendors implement single, easily navigable and user-friendly software systems that paperlessly bring all kinds of customer and product information to employee fingertips, thereby reducing overhead costs and saving both the organization and client time and money.

More than just customer service, CRM combines all aspects of vendor-client relationships. CRM combines marketing, customer, and financial information so that management, salespeople, customer service, and also the customer can access the same information. CRM enables companies to automatically remind customers of billing and service requirements, know what other products a customer has purchased, and keep track of customer feedback in a detailed way. CRM integrates all these business functions together.

How?

By helping organizations of every size identify the right customers, acquire more of the right customers faster, and retain the right customers longer. Critical to achieving this is measurement. It was once said that if you can’t measure it you can’t improve it and we all want to do things better and deliver more with lesser resources and costs. Measurement of CRM performance is best supported by a CRM application, like Microsoft Dynamics CRM.

A CRM strategy can be broken down into the following key elements:

Information: Information is critical to understanding kind of relationship you have with your customers and how to improve the profitability of these relationships.

Processes: Processes promotes consistency in what you do. Customers prefer predictable positive experiences with their suppliers and with processes your customers can expect consistency in the business experience when they interact or transact with you. Another aspect of processes is it helps to break down complex tasks into digestible steps for senior and also new staffs to follow.

Relationships: Customers are truly loyal to one thing and one thing only, the value you deliver to them commensurate with the price they pay you. Keeping track of the kind of values that bring your customers to you and staying with you helps to better understand your business.

Today, CRM encompasses most of the earlier customer centric practices such as Sales Force Automation, Contact Management, Marketing Automation, and Customer and Field Service. Microsoft’s Dynamics CRM is a suite of software used to manage a customer’s needs and behaviors in order to develop stronger lasting relationships with them.

In conclusion, CRM is the way you do business with your customers and managing this value-based relation in a systematic and productive manner can yield long term gain for your business.

A properly designed and deployed CRM system will help your business leverage technology and people resources to better manage your sales, marketing and service processes. In doing so, you will gain a consistent picture of your customers and their needs. This translates to value, and allows you to strengthen the relationship you have with each customer to retain them as an asset to your business. Some of the more tangible benefits of a good CRM solution are:

• Improved customer service
• Increased pipeline of new leads
• Increase customer loyalty and satisfaction
• Decrease lengthy sales cycles
• Gain efficiencies in call center and help desks
• Streamline marketing and sales processes

The history of CRM -- evolving beyond the customer database

Customer Relationship Management (CRM) is one of those magnificent concepts that swept the business world in the 1990’s with the promise of forever changing the way businesses small and large interacted with their customer bases. In the short term, however, it proved to be an unwieldy process that was better in theory than in practice for a variety of reasons. First among these was that it was simply so difficult and expensive to track and keep the high volume of records needed accurately and constantly update them.

In the last several years, however, newer software systems and advanced tracking features have vastly improved CRM capabilities and the real promise of CRM is becoming a reality. As the price of newer, more customizable Internet solutions have hit the marketplace; competition has driven the prices down so that even relatively small businesses are reaping the benefits of some custom CRM programs.

In the beginning…
The 1980’s saw the emergence of database marketing, which was simply a catch phrase to define the practice of setting up customer service groups to speak individually to all of a company’s customers.
In the case of larger, key clients it was a valuable tool for keeping the lines of communication open and tailoring service to the clients needs. In the case of smaller clients, however, it tended to provide repetitive, survey-like information that cluttered databases and didn’t provide much insight. As companies began tracking database information, they realized that the bare bones were all that was needed in most cases: what they buy regularly, what they spend, what they do.

Advances in the 1990’s
In the 1990’s companies began to improve on Customer Relationship Management by making it more of a two-way street. Instead of simply gathering data for their own use, they began giving back to their customers not only in terms of the obvious goal of improved customer service, but in incentives, gifts and other perks for customer loyalty.
This was the beginning of the now familiar frequent flyer programs, bonus points on credit cards and a host of other resources that are based on CRM tracking of customer activity and spending patterns. CRM was now being used as a way to increase sales passively as well as through active improvement of customer service.

True CRM comes of age
Real Customer Relationship Management as it’s thought of today really began in earnest in the early years of this century. As software companies began releasing newer, more advanced solutions that were customizable across industries, it became feasible to really use the information in a dynamic way.

Instead of feeding information into a static database for future reference, CRM became a way to continuously update understanding of customer needs and behavior. Branching of information, sub-folders, and custom tailored features enabled companies to break down information into smaller subsets so that they could evaluate not only concrete statistics, but information on the motivation and reactions of customers.

The Internet provided a huge boon to the development of these huge databases by enabling offsite information storage. Where before companies had difficulty supporting the enormous amounts of information, the Internet provided new possibilities and CRM took off as providers began moving toward Internet solutions.

With the increased fluidity of these programs came a less rigid relationship between sales, customer service and marketing. CRM enabled the development of new strategies for more cooperative work between these different divisions through shared information and understanding, leading to increased customer satisfaction from order to end product.

Today, CRM is still utilized most frequently by companies that rely heavily on two distinct features: customer service or technology. The three sectors of business that rely most heavily on CRM -- and use it to great advantage -- are financial services, a variety of high tech corporations and the telecommunications industry.

The financial services industry in particular tracks the level of client satisfaction and what customers are looking for in terms of changes and personalized features. They also track changes in investment habits and spending patterns as the economy shifts. Software specific to the industry can give financial service providers truly impressive feedback in these areas.

Other Resources

NSPL