Customer relationship management

From Wikipedia, the free encyclopedia
Jump to: navigation, search

Customer relationship management (CRM) is a system for managing a company’s interactions with current and future customers. It involves using technology to organize, automate and synchronize sales, marketing, customer service, and technical support.1

Types

Marketing and Customer Service

CRM systems track and measure marketing campaigns over multiple networks. These systems can track customer analysis by customer clicks and sales. Places where CRM is used include call centers, heavily utilized in social media, direct mail, data storage files, banks, and customer data queries.

CRM in customer contact centers

CRM systems are Customer Relationship Management platforms. It is a platform for progressing the payments and other related query management. Their goal is to track, record, store in databases, and then data mine the information in a way that increases customer relations (predominantly increased ARPU, and decreased churn). The CRM codifies the interactions between you and your customers, So that you can maximize sales and profits using analytics, KPIs, to give the users as much information on where to focus your marketing, customer service to maximize revenue, and decrease idle and unproductive contact with your customers. The contact channels (now aiming to be Omni-Channel from Multi-Channel) use such operational methods as contact centers. The CRM software is installed in the contact centers, and help direct customers to the right agent or self-empowered knowledge.2 CRM software can also be used to identify and reward loyal customers over a period of time.

Appointments

CRM software programs can automatically synchronize suitable appointment dates, times, and methods for customer contact. Once appointments are saved in a systems calendar the systems calendar will remember. Then, later retrieve the appointment and send a represented message for action.citation needed

CRM in B2B market

The modern environment requires one business to interact with another via the web. According to a Sweeney Group definition, CRM is “all the tools, technologies and procedures to manage, improve, or facilitate sales, support and related interactions with customers, prospects, and business partners throughout the enterprise”.3 It assumes that CRM is involved in every B2B transaction.4

Despite the general notion that CRM systems were created for the customer-centric businesses, they can also be applied to B2B environments to streamline and improve customer management conditions. B2C and B2B CRM systems are not created equally and different CRM software applies to B2B and B2C conditions. B2B relationships usually have longer maturity times than B2C relationships. For the best level of CRM operation in a B2B environment, the software must be personalized and delivered at individual levels.5

Characteristics of CRM

Well-designed CRM includes the following characteristics:

  1. Relationship management is a customer-oriented feature with service response based on customer input, one-to-one solutions to customers’ requirements, direct online communications with customer and customer service centers that help customers solve their questions.
  2. Salesforce automation. This function can implement sales promotion analysis, automate tracking of a client’s account history for repeated sales or future sales, and also сoordinate sales, marketing, call centers, and retail outlets in order to realize the salesforce automation.
  3. Use of technology. This feature is about following the technology trend and skills of value delivering using technology to make “up-to-the-second” customer data available. It applies data warehouse technology in order to aggregate transaction information, to merge the information with CRM solutions, and to provide KPI (key performance indicators).
  4. Opportunity management. This feature helps the company to manage unpredictable growth and demand and implement a good forecasting model to integrate sales history with sales projections.4

Importance of CRM to the B2B sector

Many of the characteristics in the B2B market suggest that CRM is a factor which influences the business. According to Zeng4 CRM has special characteristics in the B2B market. First of all, there is the “critical mass”. Due to customer relationship this network can be established and extended. Extension causes the network not to increase benefits linearly, but in an exponential way. As new members can be contacted by any existing member the benefit of a network of 200 people is much more effective than one with 100. Hence, these networks can be used to increase the amount of available information for each company. This may lead to more information about a customer which can be used to make the way of handling the customer easier in the future. The history of previous sales from this customer may be a great relief. Moreover it is possible to establish technical cooperation a bigger network is more likely to provide special services. These services include among others “systems integration, hosting, financial services such as payment processing, receivables management, credit analysis and logistics services”.4 Services of this kind encourage companies to join the B2B network by using CRM. Furthermore, B2B hubs have another advantage as they can substitute external personal if members of the network liaise. This may not only avoid extra costs for arrangement of a new contract but is also likely to accelerate the speed of this arrangement, as they are in the same network and already possess information about their negotiating partner. Ultimately, special knowledge is required for B2B markets. As B2B customers are generally more rational customers than B2Cs, a person or a team with special knowledge to each customer or industry may enhance the sales in this area.

Implementing CRM to the company

There are numerous steps companies should follow while implementing CRM system. The project manager is responsible for the success of this process. Some conditions need to be checked by the company before starting implementation directly:

  1. Make a strategic decision concerning the CRM desired goal: to improve or to change the business processes of the organization?
  2. Choose an appropriate project manager: usually it is the IT-department that is responsible for CRM system implementation. However, it is reasonable to hire the manager with a Customer Service/Sales and Marketing business focus as there are a number of decisions that are related to the business processes rather than to the hardware, software or network
  3. Executive sponsorship: provide the top management support and systematic introduction to the project manager
  4. Project team commitment and training: make sure team members have enough time and authority to complete project tasks and are committed to its success
  5. Define KPI metrics
  6. Use phased approach: work towards long-term enterprise with a series of smaller, phased implementations6

CRM software

Selecting a CRM program means finding the software that fits the company’s needs. CRM software comes with many features and tools, and despite the fact that many of CRM products offer similar feature sets, there are some unique tools in each one. Programs can be divided into categories by the following criteria: Features mean how well it integrates with other applications (ex. Outlook, Gmail, iCall etc.) and how accessible information is. It covers everything from calendar alerts and to-do lists to mobile access and synchronization capabilities. Contact information ranking outlines the program’s ability to store specific information for each contact. Business world is fast-paced, so managers need to be able to access customer’s information quickly. Sales and marketing tools designed to help and maintain current clients and gain new ones. Important that this tools help find campaigns with positive ROI and those that are not performed. Ease of use is about app’s design. Programs are checked on clean, quick navigation and easy-to-locate of the most important items. Help and support is about what support CRM software manufacturer provides for their product.7

Differences between CRM for B2B and B2C

B2B and B2C marketing operates differently, that is why they can not use the same software. All the differences are focused on the approach of these two types of businesses:

  • B2B company has smaller contact database than B2C
  • The amount of sales in B2B is relatively small
  • In B2B there is less figure propositions, but in some cases they cost a lot more than B2C items
  • Relationships in B2B environment are built over a longer time

B2B operations require special CRM solutions that are not the same for B2C industry:

  • B2B industries are needed in specialized CRM solution, which is different from B2C companies’ requirements. It is the reason for ineffective application working, despite of the same aim - to “understand its own customers better”
  • There must be different CRM solutions for industries within the B2B market, because of special needs of each one. Also there is a demand of designing solutions using special color schemes.
  • B2B CRM must be easily integrated with other companies’ IT-solutions. It should be able to create the forecast about customer behavior based on its buying history, bills, business success, etc.
  • The application for B2B company must have a function to connect all the contacts, processes and deals among the customers segment and then prepare a paper
  • Automation of sales process is an important requirement for B2B solutions. It should effectively manage the deal and send it through all the phases towards signing
  • A crucial point is personalization. It helps the B2B company to save strong and long relationships with the customer. To communicate with them more effectively, there should be integration with the email solutions

So, all the B2B applications must be both personalized and be able to establish channels of support communication for customers

SaaS CRM Software

These are software created “on-demand” which are available via Internet and do not require install and support. Vendors do not buy it, they have a rent payment per month.8

Salesforce

This software allows the company to automatically track all the web activity generated from marketing and automatically sets the Lead Source as Marketing: Website.9

BPMonline CRM

Includes built-in features and process management tools to automate CRM activities, to improve campaign response, close deals, and satisfy customers.1011

AmoCRM

AmoCRM's software assists the manager, sales team and sales management with full contact management, lead management, and sales pipeline reporting and analysis. For the B2B CRM needs, amoCRM's software is a user friendly, cost effective approach. It comes scalable to meet future growth needs without having to change platforms and retrain.12

Oracle CRM on demand

Oracle's CRM offering aims to help organizations drive sales, marketing, loyalty, and service effectiveness, for various industries: medical, pharma, technology, insurance, automobile, a and wealth management.13

Vutu.re

Vutu.re plugs into InterAction, ContactEase or SalesForce to add additional CRM functionality.

Small business

For small businesses a CRM system may simply consist of a contact manager system which integrates emails, documents, jobs, faxes, and scheduling for individual accounts.citation needed CRM systems available for specific markets (legal, finance) frequently focus on event management and relationship tracking as opposed to financial return on investment (ROI).

Social media

CRM often makes use of social media to build up customer relationships. Some CRM systems integrate social media sites like Twitter, LinkedIn and Facebook to track and communicate with customers sharing their opinions and experiences with a company, products and services.14 Enterprise Feedback Management software platforms such as Confirmit, Medallia, and Satmetrix combine internal survey data with trends identified through social media to allow businesses to make more accurate decisions on which products to supply.15

Non-profit and membership-based

Systems for non-profit and also membership-based organizations help track constituents, fund-raising, Sponsors demographics, membership levels, membership directories, volunteering and communication with individuals.citation needed

Customer-centric relationship management (CCRM)

CCRM is a style of customer relationship management that focuses on customer preferences, instead of customer leverage. This is a nascent sub-discipline of traditional customer relationship management, to take advantage of changes in communications technology.

Customer centric organizations help customers make better decisions and drive profitability. CCRM adds value by engaging customers in individual, interactive relationships.16

Customer-centricity differs from client-centricity in that the latter refers almost exclusively to business-to-business models rather than customer-facing firms.

Features of CCRM

Customer-centric relationship management is used in marketing, customer service and sales, including:

  • tailored marketing
  • one-to-one customer service
  • retaining customers
  • building brand loyalty
  • providing information customers actually want
  • Subscription billing
  • Rewards

Accenture17 and Emerald Insight18 are now beginning to focus on CCRM as a discipline, with studies appearing on Mendeley.19

Adoption issues

In 2003, a Gartner report estimated that more than $2 billion had been spent on software that was not being used. According to CSO Insights, less than 40 percent of 1,275 participating companies had end-user adoption rates above 90 percent.20 Many corporations only use CRM systems on a partial or fragmented basis.21citation needed In a 2007 survey from the UK, four-fifths of senior executives reported that their biggest challenge is getting their staff to use the systems they had installed. 43 percent of respondents said they use less than half the functionality of their existing system.22citation needed. Recently, it is found in a study that market research regarding consumers preference may increase the adoption of CRM among the developing countries' consumers.23

CRM Paradox

The CRM Paradox also referred to as the "Dark side of CRM". 24 Favouritism and differential treatment of customers may cause perceptions of unfairness which results in buyers opting out of relationships, spreading negative information, or engaging in misbehaviour that may damage the firm. CRM fundamentally involves treating customers differently based on the assumption that customers are different and have got different needs. This may cause dissatisfaction, issues of distrust and unfair practices due to the perceived inequality. A customer shows trust to bond in a relationship with a firm when they know that the firm is acting fair in creating a win-win situation. However, will customers trust that firms will be fair in splitting the value creation pie in the first place? A good example: Amazon.com’s test use of dynamic pricing (different prices for different customers) was a public relations nightmare for the company.

Market leaders

The CRM market grew by 12 percent in 2012, three times the average of all enterprise software categories.25 The following table lists the top vendors in 2006–2008 (figures in millions of US dollars) published in Gartner studies.2627

Vendor 2008 Revenue 2008 Share (%) 2007 Revenue 2007 Share (%) 2006 Revenue 2006 Share (%)
SAP AG 2,055 22.5 2,050.8 25.3 1,681.7 25.6
Oracle 1,475 16.1 1,319.8 16.3 1,016.8 15.5
Salesforce.com 965 10.6 676.5 8.3 451.7 6.9
Microsoft CRM 581 6.4 332.1 4.1 176.1 2.7
Amdocs 451 4.9 421.0 5.2 365.9 5.6
Others 3,620 39.6 3,289.1 40.6 2,881.6 43.8
Total 9,147 100 8,089.3 100 6,573.8 100

Trends

Many CRM vendors offer subscription-based web tools (cloud computing) and software as a service (SaaS). Some CRM systems are equipped with mobile capabilities, making information accessible to remote sales staff.citation needed Salesforce.com was the first company to provide enterprise applications through a web browser, and has maintained its leadership position.28 Traditional providers have recently moved into the cloud-based market via acquisitions of smaller providers: Oracle purchased RightNow in October 201129 and SAP acquired SuccessFactors in December 2011.30

The era of the "social customer"31 refers to the use of social media (Twitter, Facebook, LinkedIn, Google Plus, Pinterest, Instagram, Yelp, customer reviews in Amazon, etc.) by customers. CR philosophy and strategy has shifted to encompass social networks and user communities.

Sales forces also play an important role in CRM, as maximizing sales effectiveness and increasing sales productivity is a driving force behind the adoption of CRM. Empowering sales managers was listed as one of the top 5 CRM trends in 2013.32

Another related development is vendor relationship management (VRM), which provide tools and services that allow customers to manage their individual relationship with vendors. VRM development has grown out of efforts by ProjectVRM at Harvard's Berkman Center for Internet & Society and Identity Commons' Internet Identity Workshops, as well as by a growing number of startups and established companies. VRM was the subject of a cover story in the May 2010 issue of CRM Magazine.33

In 2001, Doug Laney developed the concept and coined the term 'Extended Relationship Management' (XRM).34 Laney defines XRM as extending CRM disciplines to secondary allies such as the government, press and industry consortia.

CRM futurist Dennison DeGregor describes a shift from 'push CRM' toward a 'customer transparency' (CT) model, due to the increased proliferation of channels, devices, and social media.35

Capterra, Inc. ranked the Top CRM Software Solutions in 2013 based on total number of customers, total number of users and social presence.36

See also

External sources

Notes

  1. ^ Shaw, Robert, Computer Aided Marketing & Selling (1991) Butterworth Heinemann ISBN 978-0-7506-1707-9
  2. ^ SAP Insider (15 November 2007) Still Struggling to Reduce Call Center Costs Without Losing Customers?
  3. ^ Davenport, T.H., Harris, J.G., Kohli, A.K. (2001), "How do they know their customers so well?", MIT Sloan Management Review, Vol. 42 No.2, pp.63-73.
  4. ^ a b c d Yun E. Zeng, H. Joseph Wen, David C. Yen, "Customer relationship management (CRM) in business-to-business (B2B) e-commerce", Emerald 11, (2003).
  5. ^ Rebekah Henderson, B2B Insights (2013) How to build a B2B-friendly CRM
  6. ^ Piskar F., Faganel A. (2009). A successful CRM Implementation Project in a Service Company: Case Study. Organizacija, Vol: 42, pp. 199-208
  7. ^ TopTen Reviews CRM Software Review
  8. ^ CRM2Web Advantage of SaaS CRM
  9. ^ TopTen Review Salesforce
  10. ^ BPMonline Why BPMonline CRM?
  11. ^ 'GetApp' Overview of BPMonline CRM
  12. ^ amoCRM' Official Web-Page of amoCRM software
  13. ^ Oracle Why Oracle CRM On Demand?
  14. ^ DestinationCRM.com (2009) Who Owns the Social Customer?
  15. ^ Lester, Aaron (2013-04-23). "Seeking treasure from social media tracking? Follow the customer". SearchBusinessAnalytics. Retrieved 2013-10-01. 
  16. ^ It’s all about the Customer, Stupid – The Importance of Customer Centric Partners
  17. ^ Sales and Customer Services–CRM: Services Overview
  18. ^ Customer-centric relationship management system development: A generative knowledge integration perspective
  19. ^ CRM and customer-centric knowledge management: an empirical research
  20. ^ Jim Dickie, CSO Insights (2006) Demystifying CRM Adoption Rates
  21. ^ Joachim, David. "CRM tools improve access, usability." (cover story). B to B 87, no. 3 (11 March 2002): 1
  22. ^ David Sims, TMC.net (2007) CRM Adoption ‘Biggest Problem’ in 83 Percent of Cases
  23. ^ Hasan, M. R., Rahman, M., And Khan, M. M. (2013). Rural Consumers’ Adoption of CRM in a Developing Country Context. International Journal of Business and Management Invention (IJBMI), 2(9), 121-131. [1]
  24. ^ Nguyen, B. & Mutum, D. S. (2012). A review of customer relationship management: successes, advances, pitfalls and futures, Business Process Management Journal, 18 (3). 400-419[2]
  25. ^ Forbes.com (2013) 2013 CRM Market Share Update: 40% Of CRM Systems Sold Are SaaS-Based
  26. ^ "Gartner Says Worldwide Customer Relationship Management Market Grew 23 Percent in 2007" (Press release). Gartner, Inc. 12 September 2008. Retrieved 2008-08-15. 
  27. ^ "Gartner Says Worldwide CRM Market Grew 12.5 Percent in 2008" (Press release). Gartner, Inc. 15 June 2009. Retrieved 2009-10-27. 
  28. ^ Put Cloud CRM to Work PC World: April, 2010
  29. ^ Oracle Buys Cloud-based Customer Service Company RightNow For $1.5 Billion Techcrunch: 24 October 2011
  30. ^ SAP Challenges Oracle With $3.4 Billion SuccessFactors Purchase Bloomberg Businessweek: 7 December 2011
  31. ^ Greenberg, Paul (2009). CRM at the Speed of Light (4th ed.). McGraw Hill. p. 7. 
  32. ^ "Top 5 CRM Trends for 2013". Enterprise Apps Today. Retrieved 7 June 2013. 
  33. ^ Destinationcrm.com CRM Magazine: May, 2010
  34. ^ [3] The Great Enterprise Balancing Act: Extended Relationship Management (XRM), Doug Laney, META Group publication, 10 December 2001
  35. ^ DeGregor, Dennison (2011). Customer-Transparent Enterprise: Beyond 20th Century CRM. Motivational Press. ISBN 1-935723-23-5. 
  36. ^ http://www.capterra.com/customer-relationship-management-software/#infographic







Creative Commons License