Customer Relationship Management

Definition:
A Customer Relationship Management (CRM) system is a tool for collecting and managing the
information and interactions your business has with your customers, sales leads, suppliers or other
businesses.
A strategic approach that enables organizations to use internal resources (i.e. Technology, people, and
process) to manage the relationship with customers for entire life cycle in order to create a competitive
advantage and improve organization performance
Need

It can help you with:

 tracking the success of your marketing activities

 identifying and following up on prospective customers
 maintaining relationships with loyal customers
 grouping your customers types to develop personalised communications
 seeing which customers have signed up to your marketing lists
 understanding which customers have responded to your offer or promotion.

Customer relationship management may mean keeping track of your customers to provide personalised
service. For example, you may choose to send your customer a special offer on their birthday.

Benefits of a CRM can include your ability to:

 develop personalised and targeted marketing activities that have a better chance of creating a
sale
 identify the most best time or most effective marketing activity that your customers respond to
 collect and store customer feedback to help you improve and innovate
 track customer behaviour, interactions and purchases of your products or services
 store and follow up on customer leads to help you find new customers.

Examples of info you may include in a CRM;

 Customer details such as name, address, contact details, date of birth and preferred contact
method.
 Customer purchase information including when a customer purchased from you, what they
bought, the time and value of the purchase.
 Engagement information on if, when and how your customer responded to your marketing
campaigns or promotions.
 Feedback information including any feedback on your service, or if a customer made any
complaints or returned their products.
Remember that any information you store on your customers must abide by privacy and IT security
regulations.

Tools of CRM: -
 The Information: Identification of data, Marketing Data.
 The process Management: Includes the product of CRM.
 Software tools and technology: Software product, Networking integrating application and
database, Security features.
 People: Training and education, New tools, measurements and rewards.

Process, Customer marketing organizations: -

CRM is the commonly used for customer or client relationship management. CRM refers to a process
used by an organization to learn more about its consumers and to improve marketing productivity.
The goal of any business is to derive maximum profitability from its customer base.
Five key steps are necessary for the successful implementation of a CRM strategy, and are commonly
referred to as “the five step process for CRM.”
1. Customer portfolio analysis: -
 Involves analysis of your organization's customer base to determine what groups and kinds
of customers are the most profitable. This will define your organization's target customer base.

2. Customer intimacy: -
 Customer intimacy is the process of getting familiar with the individual customers within
the organization's target customer base.
 Relationship building is predicated upon how well you know your customer and that includes
everything from buying habits to when their birthday is.
 Every interaction with a customer is an opportunity to improve customer intimacy and
learn more about your target market. This step usually includes building a customer database
to store the gathered information.

3. Network development: -
 The identification and development of strong relationships with organizations, networks
and people those are critical to your success in servicing your customers.
 These relationships will include external partners such as suppliers and investors, as well as
internal partners, your employees.

4. Value proposition development: -

 This step builds on the information gathered while working on customer intimacy. Once you
have identified your target customer, you can move forward and create a tailored value
proposition for this customer.
 In creating value for your customer, your value proposition must also create value for
your organization.
 5. Customer life cycle management: -
 The customer life cycle refers to the ideal customer journey: from potential client to
product/service advocate.
 It also relates the continuing relationship you maintain with your customer. Managing this cycle
requires structure and attention to process.
 Organization must determine how it will organize itself to effectively manage customer
relationships.

CRM Success factor: -

 Top Management Commitment and Support:
 Top management involvement in the CRM implementation plan has been identified as
an important factor that ensures the successful implementation of CRM.
 Define and Communicate CRM Strategy:
 A clear definition of the CRM strategy and alignment of this strategy to the company’s strategy
would facilitate the transition of changing work structure and environment toward customer-
centric approach.
 The absence of a clear CRM strategy or the lack of developing such a plan could cause the
failure of CRM implementation.
 Publishing the strategy to the staff is required to raise their awareness of the CRM objectives,
implications, and benefits.

 Culture Change:
 In order for CRM to succeed in realizing its objectives, organization should develop a culture
where all staff are encouraged to share and learn from new work structure and information that
is based on customers.
 Inter-Departmental Integration:
 From strategic perspective CRM implementation has an organization-wide influence.
 Different functions and departments of the organization should be integrated and connected with
a structure that supports the flow of information.
 Skillful Staff:
 Employees play a key role in the success of CRM projects.
 Issues of the nature of learning new work systems, training programs, change resistance,
willingness to share information, and motivating staff should be taken to consideration.
 Key Information on Customers:
 Acquiring and analyzing the right quantity and quality of information on customers helps to
meet customer’s needs.
 The right information is the base for designing customized products and services.

 Manage IT Structure:
 Considering CRM as only a technological solution is a vital misconception that resulted in
increasing failure of CRM projects.
  It is an enabler for acquiring and managing valuable data on customers. Technological aspects
such as data warehouse capabilities and software configuration in addition to the influence of the
internet are crucial for CRM successful implementation.

 Customer Involvement:
 Direct and indirect Involvement of customers in CRM designing is a tool for strengthening
practical CRM.
 Such an involvement helps the organization to analyze the customer relationship life cycle
and consequently find the areas of problems that can be managed by CRM.
 Customers’ acceptance and interaction with CRM systems could be enhanced by involving
those customers in building CRM systems.