Customer Relationship Management
Customer relationship management, or CRM, is a strategy that is recognized broadly and implemented widely to both manage and increase the quality of a company’s interactions with a variety of clientele and potential business interests. Customer relationship management involves the use of technology to optimize business processes through organization, synchronization, and automation. This optimization primarily involves activities related to sales, but may also involve activities related to technical support, marketing, and customer service. The primary goals of customer relationship management are related to discovering, engaging, and signing on novel clients, as well as maintaining relationships with established clientele, restoring relationships with former clients, and minimizing resources used on marketing and serving clients. Customer relationship management is a business strategy implemented at the company level, involving all departments related to clients. When implemented successfully, there is consistency between technology, personnel, and processes to increase the profit margins of an enterprise while simultaneously reducing its costs.
When implemented successfully, companies may be able to attain numerous objectives, including higher productivity in sales, streamlined marketing and sales processes, improved levels of service, retention, and loyalty, increases in cross selling and up selling, higher rates of closes, increased efficiency in call centers, reductions in expenses, more accurate targeting and profiling, higher overall levels of profit, increases in market shares, and marginal costs.
Although the benefits of customer relationship management may be numerous, not all companies have been able or willing to use the aforementioned techniques to focus service, sales, and marketing toward company improvement. Barriers to implementation include the complexity required to implement tools and work flows, particularly in larger companies. In previous times, such tools were primarily used only in contact management, or recording and monitoring communications and interactions. Over time, however, software solutions increased in breadth to cover tracking deals, territories, and other aspects of the sales pipeline. From there, tools were developed to assist in other business functions related to working with clients. Frequently, implementation of these tools is fragmented. Departments tend to take action solely for their own benefits, rather than to strengthen the company as a whole.
Types of Customer Relationship Management
There are several variations in customer relationship management. Among the most common are sales force automation, marketing, customer service, analytics, integrated and collaborative practices, small business, social media, and non profit or membership based systems. Each will be discussed below.
In sales force automation, software is used by the company to improve the efficiency of the sales process. This results in sales representatives having to spend less time on different parts of the sales process, which allows them to spend more of their available time pursuing clients. A contact management system forms the backbone of sales force automation; it allows the company to track or record each stage of the sales process and pay attention to each client served by the company. Additionally, sales force automation software applications may also provide information on territories, opportunities, work flow automation, sales forecasts, and knowledge of products.
In marketing, which is also termed marketing automation, systems here assist the company in locating and reaching its best customers, as well as in finding leads the sales team can pursue. A valuable feature in marketing is the ability to not only track but also measure diverse campaigns, including domains such as social media, direct mail, email, and searching. Data monitored by marketing include deals, responses, revenue, and leads.
In customer service, technology may be used by companies to improve the quality of service they can offer clients, while at the same time increasing the efficiency and minimizing the cost of that service. Comprehensive call center solutions are commonly applied here, such as computer telephone integration, or CTI, intelligent call routing, and the ability to escalate.
Systems involving analytics are typically integrated with applications related to service, sales, and marketing. The purpose of sales analytics is to allow companies to develop a more comprehensive understanding of why clients do what they do and hold the preferences they do. Applications for marketing are typically paired with predictive analytics, which leads to improvements in the ability to segment and target clients. Web analytics, for example, have increased in complexity from their initial functions as means to track mouse clicks to their current implementations as methods of predicting likely purchases and identifying difficulties customers face in making purchases.
Integrated and collaborative practices refer to interaction and collaboration between departments inside companies and enterprises; the goal here is to increase levels of cooperation and fluidity among different departments, such as marketing, service, and sales. Collaborative systems involve the use of technology to bridge distances between departments.
Small business solutions involve integrated solutions that assist both individuals and organizations in monitoring and documenting interactions such as jobs, emails, faxes, documents, and scheduling. Tools for small businesses generally focus on account management. Small businesses are increasingly turning toward online solutions, particularly for workers who travel and telecommute, to solve their business needs.
Social media sites such as Facebook, Myspace, and Twitter, are thought to wield considerable influence in bridging the gaps between consumers and companies. This is due to the amplified voice people have when using such sites, where they are able to share their experiences and opinions on services and products they have tried. In recent years, companies have taken a greater interest in these sites and in the ongoing conversations held by their members, and it has become more common to see attempts at integration into social networking sites. A company presence on such a site can aid in developing a greater understanding of client needs and preferences, and help target future consumers.
Finally, systems related to membership based and non profit organizations are used to track constituents, as well as the actions they take related to the organization itself. Such systems typically include capabilities for tracking features such as fund raising, membership levels, volunteering, demographics, and communications with target individuals.
These are the most common forms of customer relationship management in place today.