What is Customer Relationship Management (CRM)?
Customer Relationship Management is a business strategy that is based on the philosophy of “customer is king” that is the customer is put in the central place. C ustomer Relationship Management is more than simply an application of technology. It has a strategic means to develop strong relationships with customers by providing a platform to assess their individual needs and behaviour.
To put it simply customer relationship management describes all aspects of interaction that a company or corporate house has with a customer, whether it is sales or service-related.
Definition of Customer Relationship Management (CRM)
According to Paul Greenberg, “CRM is a philosophy and a business strategy supported by a system and a technology designed to improve human interactions in a business environment”.
Customer Relationship Management (CRM) is a co-ordinate approach to the selling process allowing the various operational, customer contact and sales promotional functions of an organization to function as a whole.
According to Buttle, F (2008) Customer Relationship Management (CRM) is the ‘core business strategy that combines internal processes and functions, and external networks, to create and deliver value to targeted customers at a profit. It is grounded on high-quality customer-related data and support by information technology.
According to (Wimshurst & Mackay, 2002), Customer relationship management can further be defined as a complete set of activities covering all functions of the organization, relating with and supporting a consumer. Such activities build customer satisfaction by way of providing to their needs and want over a long period of time.
According to Cap Gemini Ernst & young. A leading management consulting firm, CRM is defined as “a company’s ability to continuously maximize the value of its customer franchise by effectively allocating scarce resources to specific customers segments in those areas viewed as having a significant impact on the profit-impacting behaviours of customers.”
Characteristics of Customer Relationship Management (CRM)
Originally customer relationship management was based on three major principles; shielding the current customers, fostering new customers and enhancing the asset value of all the customers.
- Consumer relationship management is a customer-oriented feature with service response.
- CRM function can implement sales promotion, analysis, automate tracking of a client‟s account history for repeated sales or future sales and also coordinate sales, marketing, call centers, and retail outlets in order to realize the sales force automation.
- By use of technology and skills of value delivering through CRM which make up to date customer data available.
- CRM helps the company to manage unpredictable growth and demand and implement a good forecasting model to integrate approach of sales history with sales projections of the company.
Component of Customer Relationship Management (CRM)
These components are:
C RM is founded in marketing which creates relationship marketing. The evolution of CRM from direct sales to mass marketing, target marketing, and then to customer relationship marketing.
The sales function is direct interaction with customers, which makes up CRM. It is important to develop sales strategies at the customer level to build and maintain relationships with customers to achieve revenue goals. With the increase of technologies emerging for the sales function, that is possible to make the sales process more efficient and automated to increase sales.
Service and Support Activities
High-quality customer service and support is the key to improving customer retention rates and maintaining a good relationship with customers. In today‟s date is a highly competitive environment, companies must pay attention to fulfilling the needs of each customer quickly and accurately. Customer satisfaction is hard to win and easy to lose. If customers are not satisfied, they will simply move on to other companies.
IT Support Activities
Information Technologies utilization is required in order to manage large amounts of customer information for improving the customer services quality. IT plays a key role in the development of CRM. They can be used to automate and enable some or all CRM processes. Appropriate CRM strategies can be adopted through the assistance of technology, which can manage the data required to understand customers.
Moreover, the use of IT can enable the collection of the necessary data to determine the economics of customer acquisition, retention, and lifetime value. Advanced technology involves the use of databases, data warehouses, and data mining to help organizations increase customer retention rates and their own profitability.
Importance of Customer Relationship Management (CRM)
These are the following point of the importance of customer relationship management (CRM):
- CRM) is increasingly important to firms as they seek to improve their profits through longer-term relationships with customers.
- CRM system is stored centrally and which readily-accessible program, thereby reducing the time taken to search and correlate data for each customer and increasing the productivity of staff accordingly.
- Customer relationship management (CRM) to help attract new customers, increase brand loyalty, reduce costs, increase efficiency, and maintain a competitive advantage.
- CRM offers an historical view of every piece of information about a particular customer, allowing a full understanding of a customer‟s position to be gained and providing a solid ground for analysis.
- CRM is also offers a segmentation feature with the ability to make specifications according to a range of different fields like demographic profile or customer type.
- CRM is clearly records and maps out the progression of the relationship throughout the entire meeting and nurturing process.
- CRM technologies are very inexpensive and easy to administer and manage which in turn less staff required and fewer resources are applicable.
- CRM enables a company to efficiently and effectively manage customers and provide them with the services according to need and wants, which leads to an increase in customer satisfaction and in turn an enha nced level of customer loyalty, which carries improving turnover, profit and growth of the company or enterprise?
Principles of Customer Relationship Management (CRM)
These are the following principles of customer relationship management (CRM):
Total Experience Management
Mapping all of the touchpoints between you and your customers and attempting to deliver a consistent quality experience as perceived by the human touch differentiator should be relatively superior compared to other companies offering similar products and services.
Based on the customer needs, preferences, tastes and economic strengths segment your business as per the convenience of the customer to provide better services.
Customers do not have much time to stay with you. To solve the customer needs the very first time.
Real time information management
Employees have real-time access to the right information in order to make customer-based decisions and resolve issues immediately.
Treat Your Customers Differently
The treatment offered by companies has to vary from customer to customer. Generally, Customers are having different mindsets in the environment. So they required differential treatment from the company. So Segment the customers sensibly – an effective customer relationship management strategy ultimately seeks to optimize value.
When you know very well about your customer, you can make sound business decisions to develop your organization as well as the relationship between you and your customer.
INteract Personally With Your Customers
Relationships result from interaction. Knowing your customers is just the first step. Use that knowledge to develop your relationships with your customers whenever you interact with them.