Customer Relationship Management, or
is the development of strong relationships with customers by
systematically learning about their needs, behaviors, and values, and
using this knowledge to manage an efficient and effective fulfillment of
their product and/or service requirements in a manner that provides a pleasant
them. This management concept was developed in cognizance of the
fact that good customer relationships are the foundation of business
The goal of
any CRM program is to keep existing customers and gain new ones while
with each of
them. More specifically, CRM
to: 1) provide the best customer service and support experience
possible; 2) make customer support more efficient and less costly; 3)
cross-sell products more effectively; 4) help sales staff close deals
faster; 5) simplify marketing and sales processes; 6) find new
customers; and 7) maximize revenues from all customers.
experiences that a customer accumulates in dealing with a company
impacts his or her loyalty to the company. Thus, each and every
transaction conducted by a customer with a company must have a
effect on him or her. This will ensure more business with this customer
in the future.
experts, companies must always consider their
decisions about launching a new initiative. Knowing customer
needs, in this context, does not refer to just the basic ones - but
includes the special and customer-specific needs as well. For instance,
it is not enough for a company to give its customers expensive and
state-of-the-art technology or infrastructure with which they can
perform their transactions. What's more important is for the
company to know how the customer wants to go about these transactions,
and to give this to them, if not something better.
a CRM program within a company is not as simple as buying CRM software
and installing it. Many companies fail to recognize the
of setting up a 'true' CRM program, and end up being included in the
more than 60% of entities failing in their CRM implementation.
CRM is about knowing the individual customers and their respective
to the company, and building the company's business and technology
systems to maximize business
with each of them
based on this knowledge.
The choice of CRM software to use will be easier if the essence of the
CRM program itself is known to everyone.
customers and the company's business with them is imperative if a CRM
program is to succeed.
Examples of data that CRM
projects should be collecting include: 1) responses to marketing
campaigns; 2) orders and sales data; 3) order fulfillment and shipping
performance data; 4) customer account information; 5) web registration
data; 6) service and support records; 7) demographic data; and 8) web
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customers differ in their value to the company. Since customer support
and service cost money, It is but natural to provide different levels of
support or service to different customers, with more valuable customers
getting the most attention. According to experts, the following
must be considered
when determining the
value of a
to the company:
1) the total value of the customer's relationship with the company; 2)
the potential value of that relationship; 3) the profitability of having
that relationship; 4) the insights and knowledge that the customer can
provide to the company; and 5) the customer's influence over the
company's other customers.
a good knowledge of the profiles of existing and prospective customers,
the types of transactions that they conduct with your company as well as
the contact points for these transactions must be
Doing so will allow the company to know which aspects of customer
support or service they need to give more attention to and strengthen.
selection of which customer information to collect and store is a 'must'
- useless data must not be collected, since they will use up the same
valuable resources as useful data.
Lastly, all the collected and stored data for the CRM program must be
harnessed to the fullest in meeting the objectives of the initiative.
CRM implementation approach, according to Boise Office Solutions CEO
Christopher Milliken, is to
which simply means putting oneself in the customers' shoes when
developing business and technology strategies. What kind of
support or service the customers need, the customers' preferred methods
or channels for transacting with the company, which people within the
company are most often contacted by customers, and which information
technologies the customers use are examples of what a company needs to
know 'from the eyes of the customer.' Building business and
technology strategies around customer needs and wants will ensure that
they'll be happy to use your systems and technologies once these have been set up.
lesson imparted by Boise from their experience is to make your CRM
on your customers, even if it means making it more difficult for you.
Disrupting your customers' business during your implementation will
leave them with a lasting negative impression about your company.
Making the transition smooth and pleasant, however, will only make them
remember the 'improvements' brought about by your new CRM system to
implementing a CRM program may be increased by: 1) breaking down the CRM
project into smaller but more manageable pieces; 2) using a pilot
project that involves the key departments to introduce the program and
learn about it; 3) ensuring that the CRM infrastructure used is fully
scalable, and would be easy to expand or improve for future needs; 4) ensuring that
the CRM infrastructure used is
flexible enough to accommodate the full range of customer diversity that
the company might encounter; 5) creating a customer-focused culture.
implementation expensive?" is a common question asked by people who are
planning to set up their CRM systems. According to The Data Warehousing
Institute, almost 50% of the companies they surveyed had a CRM budget of
less than $500K. Some, however, spend more than $10M for their CRM
of CRM implementation therefore varies from one company to another.
Reasons why a
CRM project may
lack of communication among the people involved in the project; 2) lack
of cooperation, whether consciously or not, from key players and people
who keep the vital information; 3) internal mass resistance to change;
4) poor decision-making on the part of management; 5) underestimation of
the time, money, and resources required to get a CRM program that really
Deck, Stewart, "What is CRM?"
Supply Chain Management; TQM
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