In today's competitive environment, finding and keeping customers is more critical than ever. It is also less costly to retain existing customers than it is to find new ones. As a result, the concept of CRM has been developed as a strategic process for businesses to approach customer relations systematically and efficiently.
CRM systems enable businesses to actively manage customer relations in an organized and strategic manner. In practice that means developing a company's methodologies, internal operations, software and Internet capabilities to be able to better address customer needs and, as a result, make customer relationships more profitable.
Using a CRM system, a business can keep track of key customer information such as contacts, communications, accounts, buying histories and preferences, matching customer needs with product and service offerings. Companies can analyse the data to identify their best customers, enrich and individualize customer contact, manage marketing campaigns, reduce customer response times and serve wider geographical regions.
Starting with CRM
A wide range of CRM systems exist from very simple to complex. A simple CRM system can be the use of a spreadsheet or contact management software to keep track of customer interaction. The most effective systems, however, require a comprehensive, company-wide effort to attract and retain customers through an integration of information, people, policies, processes and technology strategies. They require a cross-functional process as no single business unit can effectively execute CRM on its own.
In recent years, CRM technologies have become accessible and cost-effective for even very small companies as technology solutions have become increasingly feature rich and prices have dropped. A range of options is now available through online, Web-based applications, which require no software purchase or install. Instead, the company pays a "subscription" fee.
Many smaller businesses deploy CRM technologies in steps, often starting with sales force automation or call centre software. As they use the software and grow, they begin to realize how other features can help their business succeed.
Expanding on CRM
As a company grows, it may outgrow the contact management system and look at implementing a full-featured CRM system. An integrated CRM system can provide a business with the following:
- Central Database — all employees can access a central database to view and update customer data, ultimately improving customer service, loyalty and retention
- Customer Analysis — customers and prospects can be segmented enabling customized marketing or sales campaigns, improving campaign targeting and close ratios
- Customer Service — provide customers with the ability to self-order and self-help using Web-based, password access, reducing order entry cost and customer service cost
- Prospect Tracking — track leads from start to close while analyzing closing probabilities and ratios. Proposals, products and pricing for each prospect can be tracked
- Reporting — Revenue forecasting, automated reporting and trend analysis, resulting in better decision making
Planning for CRM deployment
Before establishing a CRM system, a business needs to understand its customer management methodologies and its customer preferences and behaviours. To truly be effective, a CRM system needs to capture data accurately, be able to analyze that data, ensure that the right people are seeing it and that the information is ultimately used correctly. When this can't be achieved, organizations risk investing a considerable amount of time and money only to fail to achieve the expected benefits of CRM.
At its core, CRM is a business strategy, not a technology. The highest success rate for CRM deployment can be achieved when a company first develops its CRM strategy then identifies its processes and sets measurable objectives for its CRM system. Only then should it begin the technology implementation, ideally in staggered phases.
Resources
Government and Non-Profit Organization Sources
Customer Relationship Management Info-Guide [PDF format, 155Kb] - Learn how the Internet can help businesses attract new customers, establish long-term relationships and deliver better customer service.
e-Business Infokit video presentations - Among the video presentations on e-business at this site is one on CRM. By clicking on the Customer Relationship Management presentation, you will discover some of the tools and activities that will help you manage your customer relationships. This presentation is in Quick Time.
Customer Relationship Management: Introduction - A good overview of CRM for small to medium sized business, showing the relationship of CRM to other e-business and technology initiatives. The CRM information on this U.K. site (UK Online for Business) is relevant to all small businesses, as it covers the benefits of CRM, deciding to use CRM, applying CRM principles and implementing CRM solutions.
Managing e-loyalty through experience design - Consumer trust and loyalty are important factors in establishing a successful e-business. Find out why and how at this Simon Fraser University lead Web site. Special reference is given to overcoming cultural differences in online environments.
Articles on the Web
Customer Data and CRM Basics - This article deals with reconciling conflicting information for the same customer throughout various corporate databases.
Know your customers: How to identify good and bad clients, and focus your efforts - This article provides a "how-to" approach to segmenting and identifying your best customers and then locating more like them.
CRM Portals and Information Sources on the Web
These Web sites include topics of interest to the experienced and novice customer-relationship manager:
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