Customer relationship management |
The generally accepted purpose of Customer Relationship Management (CRM) is to enable orginizations to better
serve its customers through the introduction of reliable processes and procedures for interacting with those customers. A
successful CRM strategy is usually implemented through a software package designed to support these processes.
Major areas of CRM focus on service automated processes, personal information gathering and processing, and self-service. It
attempts to integrate and automate the various customer serving processes within a company.
It typically involves three general areas of business. They are a customer service system, a marketing information system and
a sales force management system. The
marketing information part provides information about the business environment, including competitors, industry trends, and
macroenviromental variables. The sales force management
part automates some of the company's sales and sales force
management functions. It keeps track of customer preferences, buying habits, and demographics, and also sales staff performance. The customer service part automates some service requests,
complaints, product returns, and information requests.
Integrated CRM software is often also known as "front office solutions." This is because they deal directly with the customer.
Many call centers use CRM software to store all of their customer's
details on. When a customer calls, the system can be used to retrieve and store information relevant to the customer. By serving
the customer quickly and efficiently, and also keeping all information on a customer in one place, a company aims to make cost
savings, and also encourage new customers.
CRM solutions can also be used to allow customers to perform their own service via a variety of communication channels. For
example, you might be able to check your bank balance via your WAP phone without ever having
to talk to a person, saving money for the company, and saving you time.
Improving customer service
CRMs are claimed to improve customer service. Proponents say they can improve customer service by facilitating communication
in several ways:
- Provide product information, product use information, and technical assistance on web sites that are accessible 24 / 7
- Help to identify potential problems quickly, before they occur
- Provide a user-friendly mechanism for registering customer complaints (complaints that are not registered with the company
cannot be resolved, and are a major source of customer dissatisfaction)
- Provide a fast mechanism for handing problems and complaints (complaints that are resolved quickly can increase customer
satisfaction)
- Provide a fast mechanism for correcting service deficiencies (correct the problem before other customers experience the same
dissatisfaction)
- Identify how each individual customer defines quality, and then design a service strategy for each customer based on these
individual requirements and expectations
- use internet cookies to track customer interests and personalize product offerings accordingly
- use the internet to engage in collaborative customization or real-time customization
- Provide a fast mechanism for managing and scheduling followup sales calls to assess post-purchase cognitive dissonance,
repurchase probabilities, repurchase times, and repurchase frequencies
- Provide a fast mechanism for managing and scheduling maintenance, repair, and on-going support (improve efficiency and
effectiveness)
- Provide a mechanism to track all points of contact between a customer and the company, and do it in an integrated way so that
all sources and types of contact are included, and all users of the system see the same view of the customer (reduces
confusion)
- The CRM can be integrated into other cross-functional systems and thereby provide accounting and production information to
customers when they want it
Improving customer relationships
CRMs are also claimed to be able to improve customer relationships . Proponents say this can be done by:
- CRM technology can track customer interests, needs, and buying habits as they progress through their life cycles, and tailor
the marketing effort accordingly. This way customers get exactly what they want as they change.
- The technology can track customer product use as the product progresses through its life cycle, and tailor the service
strategy accordingly. This way customers get what they need as the product ages.
- In industrial markets, the technology can be used to micro-segment the buying centre and help co-ordinate the conflicting and
changing purchase criteria of its members
- When any of the technology driven improvements in customer service (mentioned above) contribute to long-term customer
satisfaction, they can ensure repeat purchases, improve customer relationships, increase customer loyalty, decrease customer
turnover, decrease marketing costs (associated with customer acquisition and customer “training”), increase sales
revenue, and thereby increase profit margins
Technical functionality
A CRM solution is characterised by the following functionality:
- scalability - the ability to be used on a large scale, and to be reliably expanded to what ever scale is necessary.
- multiple communication channels - the ability to
interface with users via many different devices (phone, WAP, internet, etc)
- workflow - the ability to automatically route work through the system to
different people based on a set of rules.
- database - the centralised storage (in a data warehouse) of all information
relevant to customer interaction
- customer privacy considerations, e.g. data encryption and the destruction of
records to ensure that they are not stolen or abused.
Privacy and ethical concerns
CRMs are not however considered universally good - some feel it invades customer privacy and enable coercive sales techniques due to the information companies now have on
customers - see persuasion technology. However, CRM does
not necessarily imply gathering new data, it can be used merely to make "better use" of data the corporation already has. But in
most cases they are used to collect new data.
Some argue that the most basic privacy concern is the centralised database itself, and that CRMs built this way are inherently
privacy-invasive. See the commercial version of the debate over the carceral state, e.g. Total
Information Awareness program of the United States federal government.
CRM suppliers
Siebel Systems has been
among the most active and outspoken in its appeal to the U. S. federal government's homeland security plans. Shortly after Sept. 11, the company created a homeland security business unit,
which now employs 100 people, and announced it would build a set of applications geared specifically for homeland security.
Many other companies supply CRM solutions, including salesforce.com , Maximizer , Oracle
Corporation, IBM, SAP, FrontRange Solutions, BMC, BroadVision, Epicor and hipergate CRM
,. These pay varying degrees of attention to usability, integration, and privacy concerns - it being widely acknowledged as impossible to fulfil all three constraints
- thus it seemed unlikely that any one vendor can dominate in the near term. However, those dealing in Total Information
Awareness and fulfilling government contracts to gather data on citizens without their permission or knowledge, clearly have the
advantage of prepaid integration contracts and no privacy limits whatsoever, effectively making CRM a key part of the U.S.
military-industrial complex.
If a dominant provider of such "solutions" could gain a decisive advantage in this privacy-sensitive marketplace, this would
raise significant antitrust concerns.
See also
Lists of related topics
External links
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