Customer Relationship & System

UNIT 1: RETRIEVE CUSTOMER’S FEEDBACK AND RECORD

_________________________________________________________

LEARNING OBJECTIVES
At the end of this unit, students should be able to:

o Define Customer Relationship Management (CRM) and its purpose

o Describe how CRM impacts an organisation’s goals

o Describe the practices of CRM

o Describe steps an organisation takes to develop a CRM culture

o Describe steps an employee takes to adopt a CRM service attitude

Page 4
 Customer Relationship & System

1.1 DEFINITION OF CUSTOMER RELATIONSHIP MANAGEMENT (CRM) AND ITS

PURPOSE
Customers

A customer is an individual or a business that purchases goods and/or services from

another company.

There are two categories of customers - external or internal.

Customers

External Internal
An external customer is someone who uses and pays for the company's products or
services but is not part of the organization. For example, in a retail store, an external
customer is an individual who enters the store and buys the product.

An internal customer is any member of the organization who relies on assistance from
another to fulfil his job duties. For example, a sales representative needs help from a
customer service representative within the same company to place an order.

Customer Relationship

Customer relationship refers to the development of an ongoing connection between a

company and its customers, both internal and external. This relationship involves
marketing communication, sales support, technical assistance and customer service. It
is measured by the degree of customer satisfaction through the cycle of buying and
receipt of goods or services.

Customer Relationship Management

Customer Relationship Management (CRM) is an approach to manage the

relationships and interactions between a company and its current and potential
customers. CRM uses data analysis to analyse the company and its customers' history
to improve business relationships with customers, specifically focusing on customer
retention and ultimately driving sales growth.

Page 5
 Customer Relationship & System

A CRM helps companies to stay connected with customers, streamline processes, and
improve profitability.

Purposes of Customer Relationship Management

The purposes of CRM are as follows:

Improve Customer Satisfaction

CRM helps in customer satisfaction as the satisfied customers remain loyal to the
business and spread good word-of-mouth by fostering customer engagement via
social networking sites, surveys, interactive blogs, and various mobile platforms.

Expand the Customer Base

CRM not only manages the existing customers but also creates a knowledge
community for prospective customers who have yet to convert. Therefore CRM helps
in creating and managing a huge customer base that fosters profit continuity.

Enhance Business Sales

Businesses can use CRM methods to close more deals, increase sales, improve
forecast accuracy, and do suggestive selling (upselling). Thus CRM helps to create
new sales opportunities and hence helps in increasing revenue for the businesses.

Page 6
 Customer Relationship & System

Improve Workforce Productivity

A CRM system can create organised manners of working for sales and sales
management staff of a business. Sales and sales management staff of a company
can use a CRM system to create organised ways of working. The sales staff can
view customer's contact information, follow up via email or social media, manage
tasks, and track the salesperson's performance. The salespersons can address
customers' inquiries speedily and resolve their problems.

Hence, a CRM system is capable of compiling data from different forms of

communication channels, such as the company's website, telephone, email, live chat,
marketing materials - brochures, pamphlets and social media. Using the CRM approach
and its systems for facilitation, businesses can learn more about their target customers
and on how to best cater to their needs.

1.2 IMPACT OF CRM ON AN ORGANISATION’S GOALS

The impact of CRM on an organisation's goals can be shown in the following areas:

Increasing sales and profit of the organization

Companies can use CRM to prioritise leads and opportunities; those that are more
likely to convert and close. Which one to convert and close, depends on customer
interactions with the company.

Enhancing customer satisfaction

CRM can help to boost sales effectiveness, as the company would know which
customers are engaged and when would be the right time to reach out to them for
optimal response.

Enhancing the lifetime value of the customer with the organization

CRM increases upsell and cross-sell opportunities as it allows the company to see all
the opportunities that are a good fit for add-on deals already in progress. This helps to
increase the net profit contribution of the customers to the company over time.

Retaining existing customers and acquiring new customers

CRM provides visibility across all the relationships with the customers, which can help
the sales teams to address at-risk accounts proactively and also present satisfied
customers with new opportunities at just the right moment.

Page 7
 Customer Relationship & System

With access to customer histories, active campaigns, or open cases, the company can
provide more satisfying customer service experiences that keep the customers coming
back for more.

Creating new market segments

CRM allows the sales and marketing teams to take the information in the database
and create promotions specially designed to meet specific customer wants and needs.
This further segmentation based on customer wants and needs helps retain
customers, and customer retention is vital to the company's profitability.
Typical CRM promotions include customer loyalty programs and also the ability to
customise the product to suit the exact needs of the customer.

1.3 PRACTICES OF CRM

CRM is practised generally in the following three areas:

a. CRM as a Strategy

The concept of CRM as a Strategy refers to practices that are focused on converting
each prospect into a customer and retaining your customers by engaging them with
personalised communication.

To get fruitful results through the CRM strategy, it is important that all the
departments of the company be on the same page. For example, it is important that
the sales, marketing, and finance departments work together to execute the CRM
strategy.

An ideal CRM strategy focuses on decreasing the cost of getting new customers and
increasing customer lifetime value. An effective CRM strategy provides amazing
benefits, as shown below that help the business increase profitability:

better efficiency in marketing

effective communication with customers
better decision making based on data
profitable sales cycle
improved accuracy in forecasting
increased customer loyalty

Page 8
 Customer Relationship & System

b. CRM as a Process

CRM as a Process is a comprehensive approach that provides seamless integration

of every aspect of a company's business that interacts with the customer at various
stages such as marketing, service delivery, and after-sales service.

CRM helps in profiling prospective customers, understanding their needs, and in

building relationships with them by providing the most suitable products and
enhanced customer service.

Therefore, CRM is a comprehensive process of acquiring, retaining, and partnering

with selective customers to create superior value for the company and the customer.

c. CRM as a Technology

Technology plays a pivotal role in CRM. Technological approaches, involving the

use of databases, data mining, and one-to-one marketing, can assist organisations
in increasing customer value and profitability. Companies can use this type of
technology to keep a record of customers' names, contact details and their history of
buying products or using services. The information gathered can be used to target
customers in a personalised way and to offer these customers products and services
that meet their specific needs. This personalised communication provides value for

Page 9
 Customer Relationship & System

the customer and increases customer loyalty to the company.

1.4 STEPS AN ORGANISATION TAKES TO DEVELOP A CRM CULTURE

Implementing a CRM solution also means the company is implementing a CRM culture
at the same time. There will be some employees who will resist the change in processes,
but it is important to get each employee to understand the benefits a CRM solution
provides.

a. Management as role model

A CRM solution will offer companies real benefits when it is aligned with the overall
goals of the company. It is important during the planning process that the company
has the implementation carefully mapped out and agreed upon by key decision-
makers. It is essential to have 100% buy-in from the executive management team.
Senior-level management should be engaged at every step of the process, making
sure the project stays on course. Studies have shown that a lack of senior
management support is one of the biggest reasons why CRM projects fail.

b. Revise policies to include CRM

Getting too much or too little from a CRM solution can make sharing information
across the company more challenging than intended. If a company is currently
operating with each department autonomously, it is crucial to make sure that the
CRM solution will reach each department and streamline the sharing of information.

Customers are expecting an increasingly proficient customer service process.

Implementing a CRM solution can help the company automate many customer
service processes to reduce the time it takes to resolve an issue. Companies will
need to set benchmarks for comparison purposes to ensure that the CRM solution
is appropriately utilised.

c. Practice CRM throughout the organisation

Bringing in cultural changes is a long-term process. Companies should start training

employees on the new CRM software during the implementation process. This will
give them time to experiment with the system and ask their questions before the
solution is installed across the company.

Customer satisfaction is something that every department across the company

Page 10
 Customer Relationship & System

should be focusing on. Each department should be using the CRM to its planned
capacity. If one department is resisting the change, there will be gaps in the CRM
processes across the entire organisation.

One of the problems that CRM implementations face is getting the entire sales team
to use the system. Some salespeople believe that the way they are currently
handling their sales is the best process, and they resist having to use a CRM system.
It is important to make sure that everyone knows that implementing CRM in an
organisation is done to ensure that there is consistency throughout all sales
processes.

Metrics should be developed to measure performance, training, education, and

compensate the employees for the extra effort for blending in with the new CRM
culture. Performance recognition sends out a powerful message to all the company's
employees.

d. Drive CRM through regular feedback sessions

Implementing a CRM culture is a dynamic process in which new observations and
information can affect the already laid out concrete plan. Organisations should
reinforce positive information and replicate previous successful efforts. Accentuate
the positive that makes cultural shifts less jarring and disruptive. Acceptance of the
software, changes in processes, and a friendly people approach to CRM
implementations should be an ongoing process.

The customer-facing staff is the organisation best source of pertinent information

regarding customer behaviour. Employees should be encouraged to speak up if they
feel that improvement can be made to a process. Also, they should ask for periodic
evaluations of the changed processes towards developing an effective CRM culture.

Implementing a CRM culture can be just as challenging as implementing the

software itself. It is important to make sure that each department understands why a
CRM solution is being implemented and why it is vital for each department to use the
new CRM solution.

1.5 ADOPTION OF CRM SERVICE ATTITUDE AMONGST EMPLOYEES

a. Awareness and knowledge

CRM is not just technology but strategy and philosophy. By saying "Let's do CRM

Page 11
 Customer Relationship & System

this year" is not a strategy. Neither saying "We'll work in a CRM way from now on" is
a philosophy.

To have a successful CRM strategy means that the company needs to define:

how work processes will change

what steps to be taken at each implementation stage
what to achieve at each stage
how goals are measured
how CRM is going to complement the business development plan

This strategy needs to be made known to all employees.

b. Buy-in and acceptance

One way to increase CRM adoption rates is to get all employees actively involved.
Employees' feedback should be obtained to determine what features and functions
to be introduced in the CRM system. By allowing employees to have a voice in the
CRM implementation planning process, they will be more encouraged to invest time
and extra effort in making the CRM a success.

c. Commitment
If a company wants its customer relationship management project to be successful,
and if it wants a higher rate of end-user CRM adoption and commitment, adequate
training should be provided so that all the teams are up to speed before they use the
system. On-going training should be provided to new employees or those who may
need a refresher course, as well as when introducing new features in the system.

d. Ownership
All employees are different – some get a kick from trying out a crispy-new system
and start using it right away. Others are more sceptical about the new way of working.

The project manager in charge of the implementation should have strategies on how
to handle both types of employees. One thing that is similar to both enthusiasts and
sceptics is that they all need training to increase their sense of ownership of the CRM
project. The project manager can either choose a classroom-type training from a
vendor or assign a staff who has been trained by the vendor, to conduct the training.

The project manager should also include an introduction to the CRM system in the

Page 12
 Customer Relationship & System

onboarding program for new employees. This way, new personnel will learn how to
use CRM from the start.

Page 13