Customer Relationship Management (CRM)
A Customer Relationship Management (CRM) program is a software product designed to help businesses focuses on the relationships with its customers. CRM software tracks contact with customers, collect sales information, product support data and other issues. All data are analyzed, categorized, and organized into reports to management.
Today nearly all businesses are using a CRM program, especially business that depends on a repeat customer base, uses a sales team to contact customers, or those providing a maintenance service. CRM collects customers data, identifies what customers want, determine whether customer is expecting something from the company, identify potential new customers as well as which customer is happy or unhappy with the company etc.
Basically, CRM system is a database, storing organized information about customers and their records to allow company management as well as sale and marketing people to access quickly to make decision. The types of information that are stored depend on what system is used for and how that system is set up.
CRM supports the company in getting customers (Marketing, Sales), keeps them as loyal customers by giving them reasons to stay with the company (Incentives, Discounts) and grows additional revenue from them overtime by selling them more of what they have brought (Special incentives to increase sales). In the past, most business theories are focusing only on sales and profit but in global competition, a new theory emerges to focus on keeping customers and growing the business. Today “Customer Satisfaction” is the new rule of business.
Keep customer to stay with the business is much more cost effective than always having to find new customers. Many businesses today are focusing externally towards the customer. By giving customers better services, understand their needs and supporting them, it is easier to keep them as loyal customers. That is why CRM software is widely used in every business. For example, Telecommunication Company would give away mobile phones to customers as long as they agree to stay with the company for at least two years. To keep them, every twenty months company would allow them to exchange old phone for new phone so they do not switch company. Of course, company would grow additional revenue by charging more on additional features, storage, and upgrades to get them to spend more.
There are many CRM software products on the market; some are designed for specific business or companies. However, most must be customized for each business. Badly implemented CRM systems can do more harm than good. A database is only as good as the information it contains, if the data is not well organized, or incorrectly stored, then it cannot be relied upon for report. Getting wrong information will waste time and money, and having incorrect data relayed to a customer can be worse for business.
To customize a CRM, the company needs to have skilled information system managers who understand both the business as well as the technical issues. These skilled people can improve new CRM applications to make them work well with company business. Without understand the business or having good technical understanding, the company may have to depend on external consultants to customize the CRM applications.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
