Customer relationship management (CRM) By Ashish Kumar Gupta
Customer relationship management (CRM) is a term applied to processes implemented by a company to handle its contact with its customers. CRM software is used to support these processes, storing information on current and prospective customers. Information in the system can be accessed and entered by employees in different departments, such as sales, marketing, customer service, training, professional development, performance management, human resource development, and compensation. Details on any customer contacts can also be stored in the system. The rationale behind this approach is to improve services provided directly to customers and to use the information in the system for targeted marketing and sales purposes.
While the term is generally used to refer to a software-based approach to handling customer relationships, most CRM software vendors stress that a successful CRM strategy requires a holistic approach. CRM initiatives often fail because implementation was limited to software installation without providing the appropriate motivations for employees to learn, provide input, and take full advantage of the information systems
CRM includes many aspects which relate directly to one another:
Front office operations — Direct interaction with customers, e.g. face to face meetings, phone calls, e-mail, online services etc.
Back office operations — Operations that ultimately affect the activities of the front office (e.g., billing, maintenance, planning, marketing, advertising, finance, manufacturing, etc.)
Business relationships — Interaction with other companies and partners, such as suppliers/vendors and retail outlets/distributors, industry networks (lobbying groups, trade associations). This external network supports front and back office activities.
Analysis — Key CRM data can be analyzed in order to plan target-marketing campaigns, conceive business strategies, and judge the success of CRM activities (e.g., market share, number and types of customers, revenue, profitability).
Types/Variations of CRM
Operational CRM
Operational CRM provides support to "front office" business processes, e.g. to sales, marketing and service staff. Interactions with customers are generally stored in customers' contact histories, and staff can retrieve customer information as necessary.
The contact history provides staff members with immediate access to important information on the customer (products owned, prior support calls etc.), eliminating the need to individually obtain this information directly from the customer.
Operational CRM processes customer data for a variety of purposes:
'Managing Campaigns'
Enterprise Marketing Automation
Sales Force Automation
Sales Force Automation (SFA)
Sales Force Automation automates sales force-related activities such as:
Tracking leads
Scheduling sales calls or mailings
Tracking responses
Generating reports
Analytical CRM
Analytical CRM analyzes customer data for a variety of purposes:
Designing and executing targeted marketing campaigns
Designing and executing campaigns, e.g. customer acquisition, cross-selling, up-selling
Analysing customer behavior in order to make decisions relating to products and services (e.g. pricing, product development)
Management decisions (e.g. financial forecasting and customer profitability analysis)
Analytical CRM generally makes heavy use of data mining.
Sales Intelligence CRM
Sales Intelligence CRM is similar to Analytical CRM, but is intended as a more direct sales tool. Features include alerts sent to sales staff regarding:
Cross-selling/Up-selling/Switch-selling opportunities
Customer drift
Sales performance
Customer trends
Customer margins
Campaign Management
Campaign management combines elements of Operational and Analytical CRM. Campaign management functions include:
Target groups formed from the client base according to selected criteria
Sending campaign-related material (e.g. on special offers) to selected recipients using various channels (e.g. e-mail, telephone, post)
Tracking, storing, and analyzing campaign statistics, including tracking responses and analyzing trends
Collaborative CRM
Collaborative CRM covers aspects of a company's dealings with customers that are handled by various departments within a company, such as sales, technical support and marketing. Staff members within the departments can share information collected when interacting with customers. For example, feedback received by customer support agents can provide other staff members with information on the services and features requested by customers. Collaborative CRM's ultimate goal is to use information collected by all departments to improve the quality of services provided by the company
Geographic CRM
Geographic CRM (GCRM) combines geographic information system and traditional CRM. Geographic data can be analysed to provide a snapshot of potential customers in a region or to plan routes for customer visits.
Nex GEN CRM - Customer Experience
Customer experience is the sum of all experiences a customer has with a supplier of goods or services, over the duration of their relationship with that supplier. It can also be used to mean an individual experience over one transaction; the distinction is usually clear in context.
Growing recognition
Analysts and commentators who write about customer experience and CRM have increasingly recognized the importance of managing the customer's experience. [1] Customers receive some kind of experience, ranging from positive to negative, during the course of buying goods and services. Thompson and Kolsky say that “an experience is defined as the sum total of conscious events. As such, a supplier cannot avoid creating an experience every time it interacts with a customer” (2004). All interactions involved throughout the process and throughout the customer lifecycle culminate in a positive customer experience if customers go away feeling that their personal needs were met and they were treated with care.
A company's ability to deliver an experience that sets it apart in the eyes of its customers serves to increase their spend with the company and, optimally, inspire loyalty to its brand. "Loyalty," says Jessica Debor, "is now driven primarily by a company's interaction with its customers and how well it delivers on their wants and needs." (2008)
The concept of customer experience was first introduced by Pine and Gilmore in their 1998 Harvard Business Review article. They believe that successful businesses influence people through engaging, authentic experiences that render personal value (Pine and Gilmore 1998)
Emerging Business Requirement
With products becoming commoditized, price differentiation no longer sustainable and customers demanding more, companies – and communication service providers (wireline, wireless, broadband cable, satellite) in particular – are focusing on delivering superior customer experiences. The customer experience has emerged as the single most important aspect in achieving success for companies across all industries (Peppers and Rogers 2005).
Managing Customer Experience
Customer experience is the new innovation frontier for business. Companies are focusing on the importance of the experience and, as Jeananne Rae notes, realizing that “building great consumer experiences is a complex enterprise, involving strategy, integration of technology, orchestrating business models, brand management and CEO commitment.” (2006) An Enterprise Feedback Management (EFM) system can be used to collect value feedback from customers. Microsoft’s Customer Experience Improvement Program gives all of its customers the opportunity to provide input into the design and development of its products. The program collects feedback on how customers use Microsoft programs and problems they have encountered. The end results are software improvements to better meet customer needs.
Amdocs believes customer experiences should be intentional. Its customer experience systems help communication service providers and other enterprises develop an integrated customer management strategy that emphasizes a central focus on customer experiences the way that they’re intended – consistent, personalized and valuable.
Customer-centric service providers take care of customer needs at every touchpoint in the customer lifecycle (ordering, fulfillment, billing, support, etc.) and employ all channels (contact center, Internet, self service, mobile devices, brick and mortar stores) and means of communication (phone, chat, email, Web, in-person). They develop experience-based differentiation, which shifts the focus from product features to customer wants and needs. These experience-based providers integrate both internal and external innovations to create end-to-end customer experiences. They evaluate their business models as well as business support systems and operational support systems (BSS/OSS) from the customer’s point of view to achieve the level of customer-centricity necessary to improve customer loyalty, churn and revenue (Lopez, 2007).
Customer relationship management (CRM) is a widely used term covering the concepts used to manage an organization's relationships with its customers. This includes the capture, storing and analysis of customer, vendor, partner, and internal process data.
Operationally, CRM supports the front office business processes. Most CRM Software offerings cover 3 core modules including:
Marketing ,
Sales, and
Service.
Every customer contact is added to the customer's contact history database, and staff can obtain information on customers from that database as needed.
A primary benefit of contact history is that customers can interact with many different people, or different contact locations, in a company over time and not have to repeat the history of their interaction each time. As a result, many call centers use some sort of CRM software to support their agents.
CRM software can also analyze customer data to:
Design targeted marketing campaigns
Design specific advertising campaigns to draw in new customers and increase sales
Analyze customer behavior to help with product and service decisions such as pricing or new product development.
Perform financial forecasting to help in management decision making
CRM also assists in shaping an organization's philosophy with regard to its customers. This includes, but is not limited to, policies, processes, customer service, employee training and marketing.
Basically, a CRM system will contain:
A database to store customer information. This can be a CRM specific database or an enterprise-wide data warehouse.
Call center agent support software.
Customer interaction systems such as an interactive website or automated phone system etc.
A statistical analysis component as well as software that manages specific marketing campaigns etc.
Having a CRM makes it necessary for the organizaton to properly guard their customer information very carefully, and to assure customers that the information will not be shared withothers without their permission.
CRM Solution Providers
Numerous companies provide CRM solutions, including:
Oracle Siebel and more: see Oracle website
Salesforce.com: An Evaluation http://www.Salesforce.com
Kyliptix Solutions Inc. http://www.kyliptix.com
Salesboom Inc. http://www.salesboom.com
RightNow
Sage Software
Comarch see Comarch website
Impel CRM (http://www.impelcrm.in)
PhaseWare, Inc. (http://www.phaseware.com)