CRM - Customer Relationship Management

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Customer Relationship Management (CRM)

Customer Relationship Management, or simply "CRM", is the development of strong relationships with customers by systematically learning about their needs, behaviors, and values, and using this knowledge to manage an efficient and effective fulfillment of their product and/or service requirements in a manner that provides a pleasant experience to them. This management concept was developed in cognizance of the fact that good customer relationships are the foundation of business success.

The goal of any CRM program is to keep existing customers and gain new ones while maximizing business with each of them. More specifically, CRM aims to: 1) provide the best customer service and support experience possible; 2) make customer support more efficient and less costly; 3) cross-sell products more effectively; 4) help sales staff close deals faster; 5) simplify marketing and sales processes; 6) find new customers; and 7) maximize revenues from all customers.

The experiences that a customer accumulates in dealing with a company impacts his or her loyalty to the company. Thus, each and every transaction conducted by a customer with a company must have a positive effect on him or her. This will ensure more business with this customer in the future.

According to experts, companies must always consider their customers' needs when making decisions about launching a new initiative. Knowing customer needs, in this context, does not refer to just the basic ones - but includes the special and customer-specific needs as well. For instance, it is not enough for a company to give its customers expensive and state-of-the-art technology or infrastructure with which they can perform their transactions. What's more important is for the company to know how the customer wants to go about these transactions, and to give this to them, if not something better.

Implementing a CRM program within a company is not as simple as buying CRM software and installing it. Many companies fail to recognize the intricacies of setting up a 'true' CRM program, and end up being included in the more than 60% of entities failing in their CRM implementation. CRM is about knowing the individual customers and their respective importance to the company, and building the company's business and technology systems to maximize business with each of them based on this knowledge. The choice of CRM software to use will be easier if the essence of the CRM program itself is known to everyone.

Needless to say, effective and efficient collection and utilization of data about the customers and the company's business with them is imperative if a CRM program is to succeed. Examples of data that CRM projects should be collecting include: 1) responses to marketing campaigns; 2) orders and sales data; 3) order fulfillment and shipping performance data; 4) customer account information; 5) web registration data; 6) service and support records; 7) demographic data; and 8) web sales data.

Different customers differ in their value to the company. Since customer support and service cost money, It is but natural to provide different levels of support or service to different customers, with more valuable customers getting the most attention. According to experts, the following must be considered when determining the value of a customer to the company: 1) the total value of the customer's relationship with the company; 2) the potential value of that relationship; 3) the profitability of having that relationship; 4) the insights and knowledge that the customer can provide to the company; and 5) the customer's influence over the company's other customers.

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