Customer relationship management
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
From the outside, customers interacting with a company perceive the business as a single entity, despite often interacting with a variety of employees in different roles and departments. CRM is a combination of policies, processes, and strategies implemented by a company that unify its customer interaction and provides a mechanism for tracking customer information.
Types of CRM
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, etc.).
There are several different approaches to CRM, with different software packages focusing on different aspects. In general, Campaign Management and Sales Force Automation form the core of the system (with SFA being the most popular).
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. Consequently, many call centers use some form of CRM software.
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:
Scheduling sales calls or mailings Tracking responses Generating reports
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 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 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 (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.
Several commercial CRM software packages are available, and they vary in their approach to CRM. However, as mentioned above, CRM is not just a technology but rather a comprehensive, customer-centric approach to an organization's philosophy of dealing with its customers. This includes policies and processes, front-of-house customer service, employee training, marketing, systems and information management. Hence, it is important that any CRM implementation considerations stretch beyond technology toward the broader organizational requirements.
The objectives of a CRM strategy must consider a company’s specific situation and its customers' needs and expectations. Information gained through CRM initiatives can support the development of marketing strategy by developing the organization's knowledge in areas such as identifying customer segments, improving customer retention, improving product offerings (by better understanding customer needs), and by identifying the organization's most profitable customers.
CRM strategies can vary in size, complexity, and scope. Some companies consider a CRM strategy only to focus on the management of a team of salespeople. However, other CRM strategies can cover customer interaction across the entire organization. Many commercial CRM software packages that are available provide features that serve the sales, marketing, event management, project management, and finance industries.
While there are numerous reports of "failed" implementations of various types of CRM projects, these are often the result of unrealistic high expectations and exaggerated claims by CRM vendors.
Many of these "failures" are also related to data quality and availability. Data cleaning is a major issue. If a company's CRM strategy is to track life-cycle revenues, costs, margins, and interactions between individual customers, this must be reflected in all business processes. Data must be extracted from multiple sources (e.g., departmental/divisional databases such as sales, manufacturing, supply chain, logistics, finance, service etc.), which requires an integrated, comprehensive system in place with well-defined structures and high data quality. Data from other systems can be transferred to CRM systems using appropriate interfaces.
A well specified system is of vital importance before starting any implementation, as it can lead to a significant reduction in the time and cost of implementation, as well as highlighting any unrealistic expectations.
Failure of CRM system starts when the prime users - sales reps are not comfortable with the system. Too many data entry points will make the usage painful. The data entry points should be minimal and the integration between various modules involving the customers should be efficient enough to pre populate values based on a unique customer code. Data integration from other systems, like, daily currency exchange values inducted into the CRM system are more beneficiary to the end users. The system should be closely linked to frequently used software like MS Word / MS excel etc.
The design method should be bottom up to make the system user friendly than management friendly. Users should be periodically and extensively educated with the updates and added functionality to increase the adoption rate - as old habits die hard.
Sprint To Help Customers Understand Their Phones
Sprint Nextel Corp. is making a big push to help customers understand their phones, creating a formal program to make store employees available to explain their products and set them up for buyers. The campaign to be announced Tuesday is the first official program for in-person help by a cell carrier, but is similar to moves in the wider consumer electronics industry to demystify gadgets through one-on-one contact.
Sprint closed all of its 1,219 stores on Sunday Aug. 17 to train its employees for the "Ready Now" program. The goal is that customers should leave stores with their phones "completely set up and personalized," said Kim Dixon, Sprint's senior vice president of stores.
Customers "have got these really great devices ... but they just don't know how to set it all up," Dixon said.
Employees will now set up e-mail access, move over contacts from an old phone, connect Bluetooth headsets and explain other functions.
Customers who don't have time for the 10-minute to half-hour sessions can make appointments for later visits. These free sessions will be available to existing subscribers as well, even if they aren't buying a new phone or accessory, Dixon said.
The company tested the system in St. Louis and Pittsburgh in July, and customer satisfaction improved so much that the company rushed it into a nationwide launch, she said.
"Not only will the customer be more satisfied, but as a business, we expect to reduce the number of returns," Dixon said. Over the holidays, as many as 20 percent of "smart" phones Sprint sold were returned because the customer didn't understand them.
Apart from reduced return rates, the company saw signs that the uptake of data services like e-mail and mobile Web access improved in the trial cities. As competition has cut into margins on the voice side, cell carriers are looking to data services as the new way to improve profits.
The program is reminiscent of the "Genius Bars" of Apple Inc.'s stores, where customers go to get help with their Macs and iPods. On Friday, Microsoft Corp. said it plans to deploy its own customer-service representatives, called "Gurus," at retailers like Best Buy Co. and Circuit City Stores Inc. to help people with their PC purchases, but they won't offer technical support to people who have already bought.
Best Buy Mobile has run campaigns called "Walk Out Working," under which store employees set up select gadgets for customers. It currently applies to smart phones.