Customer relationship management (CRM) is a term that refers to practices, strategies and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with customers, assisting in customer retention and driving .
Common features of CRM software include:
- Marketing automation: CRM tools with marketing automation capabilities can automate repetitive tasks to enhance marketing efforts to customers at different points in the lifecycle. For example, as sales prospects come into the system, the system might automatically send them marketing materials, typically via email or social media, with the goal of turning a sales lead into a full-fledged customer.
- Sales force automation: Also known as sales force management, sales force automation is meant to prevent duplicate efforts between a salesperson and a customer. A CRM system can help achieve this by automatically tracking all contact and follow-ups between both sides.
- Contact center automation: Designed to reduce tedious aspects of a contact center agent’s job, contact center automation might include pre-recorded audio that assists in customer problem-solving and information dissemination. Various software tools that integrate with the agent’s desktop tools can handle customer requests in order to cut down the time of calls and simplify customer service processes.
- Geolocation technology, or location-based services: Some CRM systems include technology that can create geographic marketing campaigns based on customers’ physical locations, sometimes integrating with popular location-based GPS apps. Geolocation technology can also be used as a networking or contact management tool in order to find sales prospects based on location.
Need and Importance of CRM:
1. Better service to customers:
CRM provides more avenues for customers to communicate and explain their needs to the organization through numerous contact points. Customers get increased satisfaction and a feeling of being special and important because of the increased personalization of services and customization of goods offered to them.
For example, ICICI Bank maintains a list of priority customers and provides them with addi¬tional facilities and special offers such as free tickets to concerts, movies, and so on. Some banks, such as Syrian Catholic Bank provide personalized services to their important customers.
2. Customization of market offerings:
Companies can customize a product or service depending on the data available with the firm. The firm can facilitate customer-company interaction through the company contact centre and web site. Such interactions help develop customized products.
3. Reduction in the customer defection rate:
CRM emphasizes on training and development of the employees to become more customer oriented. Due to CRM training and development, employees show care and concern towards the valuable customers; therefore, the customer defection rate may be reduced to a great extent.
4. Increase and improvement in long-term relationships:
Some firms treat their customers as partners. Firms solicit the help of the customers to design new products or to improve their ser¬vices. If the customer gets involved with the firm, they are more likely to remain with the firm.
5. Increase in customer equity:
CRM increases customer equity. Firms focus the marketing efforts more on the most valuable customers (MVCs). The main aim of CRM is to produce high customer equity. Customer equity is the sum of lifetime values of all customers. More focus on MVCs will enable a firm to increase the customer equity.
6. Competitive advantage:
The firms that adopt CRM get competitive advantage in the market. They can face the competition with much ease. Competitive advantage helps in generating higher returns on investment.
7. Building and maintaining corporate image:
The image of the firm also gets enhanced. Loyal customers become evangelists. The evangelists spread a good word about the company and its products. This enables a firm to get additional customers to its fold.
8. Higher return on investment:
Due to CRM, a company gains a position to generate higher returns on investment. This is because of the repeat purchases on the part of the loyal customers. The company also makes money through cross selling. The higher return on investment increases the shareholders’ value.
9. Techniques of Building CRM:
Firms use a number of techniques to build, maintain and enhance CRM. The techniques include the software programmes, promotional techniques, pricing strategies, MVC programmes, and so on. Some of the techniques have been discussed in detail.
10. Data Warehousing and Data Mining:
CRM analysts develop data warehouses and use data-mining techniques to develop and maintain long- lasting relationships with the valuable customers.
1. A data warehouse is a company-wide electronic database of detailed customer information. The purpose of data warehouse is not just to gather information, but to place it into a central location for easy access.
2. Once the data warehouse locates the data at a central place, the data analysts use data mining
3.techniques to examine the mounds of data to find out interesting facts of the customers.
The mined data can be utilized for various marketing decisions such as the following:
1. Product design and modification
2. Product pricing
3. Promotion mix
4. Selection of channels of distribution
5. Maintaining dealer relationships.