What Is Customer Relationship Management
Essay title: What Is Customer Relationship Management
What is CRM?
CRM stands for Customer Relationship Management. It is a strategy used to learn more about customers needs and behaviors in order to develop stronger relationships with them. Good customer relationships are at the heart of business success. There are many technological components to CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a strategic process that will help you better understand your customers’ needs and how you can meet those needs and enhance your bottom line at the same time. This strategy depends on bringing together lots of pieces of information about customers and market trends so you can sell and market your products and services more effectively.
What is the goal of CRM?
The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. With an effective CRM strategy, a business can increase revenues by:
providing services and products that are exactly what your customers want
offering better customer service
cross selling products more effectively
helping sales staff close deals faster
retaining existing customers and discovering new ones
That sounds rosy. How does it happen?
It doesnt happen by simply buying software and installing it. For CRM to be truly effective, an organization must first understand who its customers are and what their value is over a lifetime. The company must then determine what the needs of its customers are and how best to meet those needs. For example, many financial institutions keep track of customers life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time to fit their needs.
Next, the organization must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used. One company, for instance, may interact with customers in a myriad of different ways including mail campaigns, Web sites, brick-and-mortar stores, call centers, mobile sales force staff and marketing and advertising efforts. CRM systems link up each of these points. This collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed. For example, if someone has a mortgage, a business loan, an IRA and a large commercial checking account with one bank, it behooves the bank to treat this person well each time it has any contact with him or her.
Are there any indications of the need for a CRM project?
You need CRM when it is clear you don’t have an accurate view of who your customers are and what their needs or desires are or will be at any given stage in their lives. If you are losing customers to a competitor, that’s a clear indication that you should improve your understanding of your customers.
How long will it take to get CRM in place?
It depends. If you decide to go with a hosted CRM solution from an application service provider and you are planning to use the software for a specific department like sales, the deployment should be relatively quick – perhaps 30-90 days. However, if you are deploying either a hosted application or an on-premise package (involving the purchase of software licenses upfront) on an enterprise-wide basis (that involves different departments like sales, marketing and operations), you should expect the implementation and training to take months, if not years. The time it takes to put together a well-conceived CRM project depends on the complexity of the project and its components and how well you manage the project.
How much does CRM cost?
Again it depends. A hosted sales automation application can cost between $65 and $150 a month for a basic sales automation package. If you want more sophisticated functionality and a greater level of support, you pay a lot more. An enterprise on-premise CRM package can cost anywhere between several thousand to several millions of dollars, depending again on how many functions you purchase and how many computers or “seats” have access to the software. For instance, one company or department might purchase an email marketing management