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Customer relationship management (CRM) is a broadly recognized, widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments. Customer relationship management (CRM) is all about understanding the customer's needs and leveraging this knowledge to increase sales and improve service. CRM blurs the boundaries between sales and service, and unify a company's activities around the customer. The overarching goal is to increase customer share and customer retention through customer satisfaction. The strategic importance of managing customer relations is not new by any stretch of the imagination. What is new is the customer centricity focus that CRM brings to a company. This new focus is the direct result of the electronic world. The World Wide Web is the perfect place to get to know and cultivate the client on a one-to-one basis. It offers an unparalleled opportunity to personalize services, provide multiple choice for customer support, track customer satisfaction and deliver loyalty programs. The implementation of CRM goes beyond automating functions. It entails a fundamental change in the culture and operations of an organization. It also means addressing the infrastructure requirements for its implementation on the web.
NEED FOR CUSTOMER RELATIONSHIP MANAGEMENT
The ultimate purpose of CRM, like any organizational initiative, is to increase profit. In the case of CRM this is achieved mainly by providing a better service to your customers than your competitors. CRM not only improves the service to customers though; a good CRM capability will also reduce costs, wastage, and complaints (although you may see some increase initially, simply because you hear about things that without CRM would have stayed hidden). Effective CRM also reduces staff stress, because attrition - a major cause of stress - reduces as services and relationships improve. CRM enables instant market research as well: opening the lines of communications with your customers gives you direct constant market reaction to your products, services and performance, far better than any market survey. Good CRM also helps you grow your business: customers stay with you longer; customer churn rates reduce; referrals to new customers increase from increasing numbers of satisfied customers; demand reduces on fire-fighting and trouble-shooting staff, and overall the organization's service flows and teams work more efficiently and more happily. Customer Relationship Management concerns the relationship between the organization and its customers. Customers are the lifeblood of any organization be it a global corporation with thousands of employees and a multi-billion turnover, or a sole trader with a handful of regular customers. CRM FOCUSES ON RELATIONSHIP Successful organizations use three steps to build customer relationships:
• • •
Determine mutually satisfying goals between organization and customers. Establish and maintain customer support. Produce positive feelings in the organization and the customers.
CRM IMPACTS ON THE ORGANIZATION CRM can have a major impact on an organization through:
• • •
Shifting the focus from product to customer. Streamlining the offer to what the customer requires, not want the organization can make. Highlighting competencies required for an effective CRM process.
CRM HELPS IN UNDERSTANDING CUSTOMER’S NEEDS AND WANTS Information is also collected about their buying habits. Humans are creatures of habit. By analysing the information collected about the customer and their buying habits the CRM can be used to help the business identify what the customers would most likely want or need to buy.
CRM IS USEFUL IN TARGETING NEW CUSTOMERS Information gathered in the CRM will help the business to target more of the preferred customers. Knowing the information from the CRM, the business can then hire a list from a direct mail list broker of all the single men that fit the description and target their marketing towards them. The CRM activity of improving the relationship with the customer is to help keep the customer more loyal to the company and thus improve the profitability of the business.
CRM HELPS IN INCREASING AND MAINTAINING EFFICIENCY AND EFFECTIVENESS OF BUSINESS A good CRM application will help the business to become more efficient and effective. Knowing all the information about the customers, the marketing strategies can be targeted towards the customers in a personal way. Thus marketing to a defined target market with a past history the potential of improved results is far greater than marketing to a 'cold' list.
The organization and the customers both have sets of conditions to consider when building the relationship, such as wants and needs of both parties;
Organizations need to make a profit to survive and grow. Customers want good service, a quality product and an acceptable price.
ACHIEVING GOOD CRM
Achieving effective Customer Relationship Management requires many organizations to adopt a new perspective. Consider the following:
Traditional customer customer.
Modern Customer Relationship Management is 'done with' the customer.
The second statement is emphasises the big differences between conventional traditional customer service, and the modern progressive CRM approach. Your relationships with customers should be ongoing, cooperative, and built for the long term. Organizations that have many transitory relationships with customers consequently have to spend a lot of money on finding new customers. The cost of keeping existing customers is a tiny fraction of the cost of acquiring new customers.
PHASES OF CUSTOMER RELATIONSHIP MANAGEMENT
The three phases in which CRM support the relationship between a business and its customers are to:
Acquire: CRM can help a business acquire new customers through contact management, direct marketing, selling, and fulfillment. Enhance: web-enabled CRM combined with customer service tools offers customers service from a team of sales and service specialists, which offers customers the convenience of one-stop shopping. Retain: CRM software and databases enable a business to identify and reward its loyal customers and further develop its targeted marketing and relationship marketing initiatives.
CHALLENGES IN CUSTOMER RELATIONSHIP MANAGEMENT
Tools and workflows can be complex, especially for large businesses. Previously these tools were generally limited to management, monitoring and recording interactions and communications. Often, implementations are fragmented—isolated initiatives by individual departments to address their own needs. Systems that start disunited usually stay that way, soloed and decision processes frequently lead to separate and incompatible systems, and dysfunctional processes. Business reputation has become a growing challenge. The outcome of internal fragmentation that is observed and commented upon by customers is now visible to the rest of the world in the era of the social customer, where in the past, only employees or partners were aware of it. Addressing the fragmentation requires a shift in philosophy and mindset within an organization so that everyone considers the impact to the customer of policy, decisions and actions. Human response at all levels of the organization can affect the customer experience for good or ill. Even one unhappy customer can deliver a body blow to a business.
TYPES AND VARIATIONS
MARKETING CRM systems for marketing help the enterprise identify and target potential clients and generate leads for the sales team. A key marketing capability is tracking and measuring multi channel campaigns, including email, search, social media, telephone and direct mail. Metrics monitored include clicks, responses, leads, deals, and revenue. This has been superseded by marketing automation and Prospect Relationship Management (PRM) solutions which track customer behaviour and nurture them from first contact to sale, often cutting out the active sales process altogether. CUSTOMER SERVICE AND SUPPORT Recognizing that service is an important factor in attracting and retaining customers, organizations are increasingly turning to technology to help them improve their clients’ experience while aiming to increase efficiency and minimize costs. Even so, a 2009 study revealed that only 39% of corporate executives believe their employees have the right tools and authority to solve client problems.“ The core for these applications has been and still is comprehensive call center solutions, including such features as intelligent call routing, computer telephone integration (CTI), and escalation capabilities. ANALYTICS Relevant analytics capabilities are often interwoven into applications for sales, marketing, and service. These features can be complemented and augmented with links to separate, purpose-built applications for analytics and business intelligence. Sales analytics let companies monitor and understand client actions and preferences, through sales forecasting and data quality. Marketing applications generally come with predictive analytics to improve segmentation and targeting, and features for measuring the effectiveness of online, offline, and search marketing campaign. Web analytics have evolved significantly from their starting point of merely tracking mouse clicks on Web sites. By evaluating “buy signals,” marketers can see which prospects are most likely to transact and also
identify those who are bogged down in a sales process and need assistance. Marketing and finance personnel also use analytics to assess the value of multi-faceted programs as a whole. These types of analytics are increasing in popularity as companies demand greater visibility into the performance of call centers and other service and support channels, in order to correct problems before they affect satisfaction levels. Support-focused applications typically include dashboards similar to those for sales, plus capabilities to measure and analyze response times, service quality, agent performance, and the frequency of various issues.
Departments within enterprises, especially large enterprises, tend to function with little collaboration. More recently, the development and adoption of these tools and services have fostered greater fluidity and cooperation among sales, service, and marketing. This finds expression in the concept of collaborative systems which uses technology to build bridges between departments. For example, feedback from a technical support center can enlighten marketers about specific services and product features clients are asking for. Reps, in their turn, want to be able to pursue these opportunities without the burden of re-entering records and contact data into a separate SFA system. Owing to these factors, many of the top-rated and most popular products come as integrated suites.
For small business, basic client service can be accomplished by a contact manager system: an integrated solution that lets organizations and individuals efficiently track and record interactions, including emails, documents, jobs, faxes, scheduling, and more. These tools usually focus on accounts rather than on individual contacts. They also generally include opportunity insight for tracking sales pipelines plus added functionality for marketing and service. As with larger enterprises, small businesses are finding value in online solutions, especially for mobile and telecommuting workers.
Social media sites like Twitter and Facebook are amplifying the voice of people in the marketplace and are having profound and far-reaching effects on the ways in which people buy. Customers can now research companies online and then ask for recommendations through social
media channels, making their buying decision without contacting the company. People also use social media to share opinions and experiences on companies, products and services. As social media is not as widely moderated or censored as mainstream media, individuals can say anything they want about a company or brand, positive or negative. Increasingly, companies are looking to gain access to these conversations and take part in the dialogue. More than a few systems are now integrating to social networking sites. Social media promoters cite a number of business advantages, such as using online communities as a source of high-quality leads and a vehicle for crowd sourcing solutions to client-support problems. Companies can also leverage client stated habits and preferences to personalize and even "hyper-target" their sales and marketing communications.
IMPLEMENTATION OF CRM STRATEGY
A successful CRM implementation strategy needs to consider the following: • Knowledge Management: At the heart of a CRM implementation is the acquisition of information about a customer, its analysis, sharing and tracking. Also integral to the use of knowledge for competitive advantage is for employees to know what actions to take as a result of this knowledge.
• Database Consolidation: This involves the consolidation of customer information in a single database and the re-engineering of business processes around the customer. The goal is to have all interactions with a customer recorded in one place to drive production, marketing, sales and customer support activities.
• Integration of Channels and Systems: The epitome of online service is to respond to customers in a consistent and high-quality manner through their channel of choice, whether that is the e-mail, the phone or online chat. This in turn dictates the seamless integration of all communication channels with the customer database. It also dictates the integration of CRM with other parts of a company's business systems and applications.
• Technology and Infrastructure: Sophisticated tools exist to automate and streamline online customer service. The self-help model typically achieved using a combination of tools (e.g. knowledge bases with an intuitive search capability, agent technology or automated email) can be complemented with realtime interactions provided by live chats and IP telephony. While the tools are available, the crux of the matter is to ensure the ability of the organization and the scalability of the technology infrastructure to cope with increased volumes.
Increases in revenue, higher rates of client satisfaction, and significant savings in operating costs are some of the benefits to an enterprise. Proponents emphasize that technology should be implemented only in the context of careful strategic and operational planning. Implementations almost invariably fall short when one or more facets of this prescription are ignored.
Poor planning: Initiatives can easily fail when efforts are limited to choosing and deploying software, without an accompanying rationale, context, and support for the workforce. In other instances, enterprises simply automate flawed client-facing processes rather than redesign them according to best practices. Poor integration: For many companies, integrations are piecemeal initiatives that address a glaring need: improving a particular client-facing process or two or automating a favored sales or client support channel. Such “point solutions” offer little or no integration or alignment with a company’s overall strategy. They offer a less than complete client view and often lead to unsatisfactory user experiences. Toward a solution: overcoming soloed thinking. Experts advise organizations to recognize the immense value of integrating their client-facing operations. In this view, internally-focused, department-centric views should be discarded in favor of reorienting processes toward information-sharing across marketing, sales, and service. For example, sales representatives need to know about current issues and relevant marketing promotions before attempting to cross-sell to a specific client. Marketing staff should be able to leverage client information from sales and service to better target campaigns and offers. And support agents require quick and complete access to a client’s sales and service history.
Specialists offer these recommendations for boosting adoptions rates and coaxing users to blend these tools into their daily workflow:
Choose a system that is easy to use: All solutions are not created equal. Some vendors offer more user-friendly applications than others, and simplicity should be as important a decision factor as functionality. Choose the right capabilities: Employees need to know that time invested in learning and usage will yield personal advantages. If not, they will work around or ignore the system. Provide training: Changing the way people work is no small task, and help is usually a requirement. Even with today’s more usable systems, many staffers still need assistance with learning and adoption. Lead by example: Showing employees that upper management fully supports the use of a new application by using the application themselves may increase the likelihood that employees will adopt the application.
PROCESS OF CUSTOMER RELATONSHIP MANAGEMENT
The customer relationship management (CRM) process involves strategic decisions that are based on the needs, input and feedback of customers. Businesses that incorporate CRM processes work from an outside-in model, rather than forcing their ideas on to the customer to build business. The customer is the main driver in a CRM model. Everything from technology to pricing, sales techniques and education revolve around the customer. Departments that serve the customers including marketing, sales and customer service are integrated so that budgets and business plans involve all parties.
MARKETING Customer relationship management and relationship marketing are the same thing. Rather than focusing all sales efforts on closing the deal and moving on to the next client, sales and marketing professionals work on building trust and loyalty with existing clients. Customers who feel that they are heard and respected bring repeat business and send referrals. Companies practicing CRM can create databases that contain more detailed demographics and personal data, such as birthdays, previous purchases, family dynamics and other important information. Mass mailings and promotions can then be tailored to specific clients, according to their profiles.
NETWORKING Beyond data collection, customer relationship management relies on personal interaction with clients through mutual-interest networks, such as industry associations, community groups and philanthropic endeavours. CRM encourages sales and marketing professionals to move beyond sales to communication with customers, based on mutual interests and concerns. Relationship marketing involves give-and-take. In addition to the products and services a salesperson may be offering, marketing
professionals may provide business leads to clients who don't make an immediate purchase. Laying a foundation of interaction with a new client is just as important as an imminent deal.
LONG TERM BENEFITS By focusing marketing efforts on building relationships, a company plans for long-term results. Monitoring relationship-building efforts is tantamount to success. Companies can direct their efforts at the types of clients who are open to a continuing relationship. Partnerships are formed with customers who feel they are part of the company's success, and who strongly believe they are receiving benefits in return for continued loyalty. Clients who do not respond to relationship-building techniques can be moved to a different form of sales management. Monitor time and effort spent, and the results gleaned from each relationship. Time is the primary resource needed to build a strong relational clientele. Marketing efficiency is enhanced when CRM processes and the means to monitor them are incorporated into the strategic plans of any business.
Customers are the usual source of income for an organization. (If not then they will certainly leverage your income, as in the case of readers of a free publication which is funded by advertising. Customers are also an exceptional source of information - information which is vital to enable a business to succeed; i.e., giving customers what they want. Managing customers entails: knowing what customers want and need - which enables you to focus your production and service efforts
knowing which products or customers have most growth potential which enables you to focus on developing highest potential
knowing which products or customers are most or least profitable which enables you to focus on maximising profit
knowing which customers will be advocates and supporters - which enables you to provide references, case studies, and to safely test new products and services
BENEFITS OF EFFECTIVE CRM
There are significant business benefits which accrue from an effective, integrated Customer Relationship Management approach. These include:
• • • • • • • •
Reduced costs, because the right things are being done. Increased customer satisfaction, because they are getting exactly what they want. Ensuring that the focus of the organization is external. Growth in numbers of customers. Maximisation of opportunities. Increased access to a source of market and competitor information. Highlighting poor operational processes. Long term profitability and sustainability
Forward thinking organizations understand the vital need to maintain a strategic focus on CRM and to resource and manage it appropriately.
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