Contents
• 1 Implementing CRM
• 2 CRM Architecture
o 2.1 Operational CRM
o 2.2 Analytical CRM
o 2.3 Collaborative CRM
• 3 Uses of CRM
• 4 Technical Considerations
• 5 Improving Customer Relationships
• 6 Privacy and Ethical Concerns
• 7 CRM for Nonprofit Organizations
Customer relationship management
Customer relationship management (CRM) covers methods and technologies used by
companies to manage their relationships with clients. Information stored on existing
customers (and potential customers) is analyzed and used to this end. Automated CRM
processes are often used to generate automatic personalized marketing based on the
customer information stored in the system.
Implementing CRM
Customer relationship management is a corporate level strategy, focusing on creating and
maintaining relationships with customers. Several commercial CRM software packages
are available which vary in their approach to CRM. However, CRM is not a technology
itself, but rather a holistic approach to an organisation's philosophy, placing the emphasis
firmly on the customer.
CRM governs an organization's philosophy at all levels, including policies and processes,
front of house customer service, employee training, marketing, systems and information
management. CRM systems are integrated end-to-end across marketing, sales, and
customer service.
A CRM system should:
Identify factors important to clients
Promote a customer-oriented philosophy
Adopt customer-based measures
Develop end-to-end processes to serve customers
Provide successful customer support
Handle customer complaints
Track all aspects of sales
CRM Architecture
There are three fundamental components in CRM:
Operational - automation of basic business processes (marketing, sales, service)
Analytical - analysis of customer data and behavior using business intelligence
Collaborative - communicating with clients
Operational CRM
Operational CRM provides automated support to "front office" business processes (sales,
marketing and service). Each interaction with a customer is generally added to a
customer's history, and staff can retrieve information on customers from the database as
necessary.
According to Gartner Group, operational CRM typically involves three general areas:
Sales force automation (SFA)
SFA automates some of a company's critical sales and sales force management
tasks, such as forecasting, sales administration, tracking customer preferences and
demographics, performance management, lead management, account
management, contact management and quote management.
Customer service and support (CSS)
CSS automates certain service requests, complaints, product returns and enquiries.
Enterprise marketing automation (EMA)
EMA provides information about the business environment, including
information on competitors, industry trends, and macroenvironmental variables.
EMA applications are used to improve marketing efficiency.
Integrated CRM software is often known as a "front office solution", as it deals directly
with customers.
Many call centers use CRM software to store customer information. When a call is
received, the system displays the associated customer information (determined from the
number of the caller). During and following the call, the call center agent dealing with the
customer can add further information.
Some customer sevices can be fully automated, such as allowing customers to access
their bank account details online or via a WAP phone
Analytical CRM
Analytical CRM analyzes data (gathered as part of operational CRM, or from other
sources) in an attempt to identify means to enhance a company's relationship with its
clients. The results of an analysis can be used to design targeted marketing campaigns,
for example:
Acquisition: Cross-selling, up-selling
Retention: Retaining existing customers
Information: Providing timely and regular information to customers
Other examples of the applications of analyses include:
Contact optimization
Evaluating and improving customer satisfaction
Optimizing sales coverage
Fraud detection
Financial forecasts
Price optimization
Product development
Program evaluation
Risk assessment and management
Data collection and analysis is viewed as a continuing and iterative process. Ideally,
business decisions are refined over time, based on feedback from earlier analyses and
decisions. Most analytical CRM projects use a data warehouse to manage data.
Collaborative CRM
Collaborative CRM focuses on the interaction with customers (personal interaction,
letter, fax, phone, Internet, e-mail etc.)
Collaborative CRM includes:
Providing efficient communication with customers across a variety of communications
channels
Providing online services to reduce customer service costs
Providing access to customer information while interacting with customers
Driven by authors from the Harvard Business School (Kracklauer/Mills/Seifert),
Collaborative CRM also seems to be the new paradigma to succeed the leading Efficient
Consumer Response and Category Management concept in the industry/trade
relationship.
Uses of CRM
In its broadest sense, CRM covers all interaction and business with customers. A good
CRM program allows a business to acquire customers, provide customer services and
retain valued customers.
Customer services can be improved by:
Providing online access to product information and technical assistance around the clock
Identifying what customers value and devising appropriate service strategies for each
customer
Providing mechanisms for managing and scheduling follow-up sales calls
Tracking all contacts with a customer
Identifying potential problems before they occur
Providing a user-friendly mechanism for registering customer complaints
Providing a mechanism for handling problems and complaints
Providing a mechanism for correcting service deficiencies
Storing customer interests in order to target customers selectively
Providing mechanisms for managing and scheduling maintenance, repair, and on-going
support
Technical Considerations
The following factors need to be considered:
Scalability: the system should be highly scalable, as the volume of data stored in the
system grows over time
Communication channels: CRM can interface with a variety of different channels (phone,
WAP, Internet etc.)
Workflow - a company's business processes need to be represented by the system with
the ability to track the individual stages and transfer information between steps
Assignment - the ability to assign requests, such as service requests, to a person or group.
Database - the means of storing customer data and histories (in a data warehouse)
Customer privacy considerations, such as data encryption and legislation.
Improving Customer Relationships
CRM applications often track customer interests and requirements, as well as their
buying habits. This information can be used to target customers selectively. Furthermore,
the products a customer have purchased can be tracked throughout the product's life
cycle, allowing customers to receive information concerning a product or to target
customers with information on alternative products once a product begins to be phased
out.
Repeat purchases rely on customer satisfaction, which in turn comes from a deeper
understanding of each customer and their individual needs. CRM is an alternative to the
"one size fits all" approach. In industrial markets, the technology can be used to
coordinate the conflicting and changing purchase criteria of the sector.
Privacy and Ethical Concerns
The data gathered as part of CRM raises concerns over customer privacy and enables
coercive sales techniques (see persuasion technology). However, CRM does not
necessarily involve gathering new data, but also includes making better use of customer
information gathered as a result of routine customer interaction.
The privacy debate generally focuses on the customer information stored in the
centralised database itself, and fears over a company's handling of this information,
especially regarding third parties.
CRM for Nonprofit Organizations
CRM is also important to non-profit organizations, which sometimes use the terms
"constituent relationship management," "contact relationship management" or
"community relationship management" to describe their information systems for
managing donors, volunteers and other supporters.