Definition of Customer Relationship Management (CRM)
According to Gartner___” Customer Relationship Management is a business strategy designed to optimize profitability, revenue, and customer satisfaction”.
According to PWC Consulting___” CRM is a business strategy that aims to understand/appreciate, manage and personalize the need of an organization’s current and potential customers”.
According to Parvatiyar and Sheth___” CRM Is a competitive strategy and process of acquiring, reacting and partnering with selective customers to create superior value for the company and the customer”.
Components of Customer Relationship Management
- Customer: It is important to recognize and manage customers for an organization as its profit and growth solely depends on customers. Information technology play a very important role here.
- Relationship: Uninterrupted bi-directional communication between the organization and its customers builds the relationship between them. This relationship can take any form such as continuous or discrete, repetitive or one-time, and short-term or long-term.
- Management: CRM is a management function that should be considered not only in marketing department but in the whole corporate culture, departments, and activities. A broad change in the procedures and functions of the organization and employee attitude is required for CRM.
Customer Relationship Management is a new phase of marketing industry which drives the philosophy of information technology enabled relationship marketing. There is an emerging need for CRM in the current marketing scenario as it is equipped with several IT tools such as MS Access, Spreadsheets, Data warehouses, MIS, SMS, Fax, E-mains, Telephones, Loyalty cards, ATMs etc. These tools help in developing customer loyalty thus profitability of the organization by improving analysis of the processed customer data. The primary goal of customer relationship management systems is to integrate and automate sales, marketing, and customer support. Therefore, these systems typically have a dashboard that gives an overall view of the three functions on a single customer view, a single page for each customer that a company may have. The dashboard may provide client information, past sales, previous marketing efforts, and more, summarizing all of the relationships between the customer and the firm. Operational CRM is made up of 3 main components: sales force automation, marketing automation, and service automation.
Key Elements of Customer Relationship Management
CRM can be broken down into a number of different components which many software vendors have developed packages for. For the most part, there are three areas which are core to successful customer relationship management :
- Sales force automation: Sales force automation works with all stages in the sales cycle, from initially entering contact information to converting a prospective client into an actual client. It implements sales promotion analysis, automates the tracking of a client’s account history for repeated sales or future sales and coordinates sales, marketing, call centers, and retail outlets. It prevents duplicate efforts between a salesperson and a customer and also automatically tracks all contacts and follow-ups between both parties.
- Marketing Automation:Its focuses on easing the overall marketing process to make it more effective and efficient. CRM tools with marketing automation capabilities can automate repeated tasks, for example, sending out automated marketing emails at certain times to customers, or posting marketing information on social media. The goal with marketing automation is to turn a sales lead into a full customer. CRM systems today also work on customer engagement through social media.
- Service automation: Service automation is the part of the CRM system that focuses on direct customer service technology. Through service automation, customers are supported through multiple channels such as phone, email, knowledge bases, ticketing portals, FAQs, and more.
Advantages of Customer Relationship Management
- Provide better customer service.
- Increase customer revenues and Increase customer satisfaction.
- Discover new customers.
- Cross sell/Up Sell products more effectively.
- Help sales staff close deals faster.
- Make call centers more efficient.
- Simplify marketing and sales processes.
- Increased market share and profit margin.
- Better customer service and support.
- Enhanced customer loyalty.
- Improved quality communication and networking.
Disadvantages of CRM
- Requires Top Management Support.
- Full of Confusion.
- Problem in Implementation.
- Automation of Sales Processes.
- Prevailing Customer Dissatisfaction.
- Training of Function Staff.