Managing customer relationships ( CRM ) is an approach to managing corporate interactions with current and potential customers. It uses data analysis of customer histories with companies to improve business relationships with customers, particularly focusing on customer retention and ultimately driving sales growth.
One important aspect of the CRM approach is the CRM system that collects data from different communication channels, including corporate website, phone, email, live chat, marketing materials, and more recently, social media. Through the CRM approach and systems used to facilitate, businesses learn more about their target audience and how best to meet their needs.
Video Customer relationship management
Software history
The concept of customer relationship management began in the early 1970s, when customer satisfaction was evaluated using an annual survey or by asking on the front lines. At that time, businesses had to rely on stand-alone mainframe systems to automate sales, but the extent to which technology allowed them to categorize customers in spreadsheets and lists. In 1982, Kate and Robert Kestnbaum introduced the concept of Database marketing, applying statistical methods to analyze and collect customer data. In 1986, Pat Sullivan and Mike Muhney released a customer evaluation system called ACT! based on the principle of digital rolodex, which offers contact management services for the first time.
This trend was followed by many developers who tried to maximize potential prospects, including Tom Siebel, who signed Siebel Systems' first CRM product in 1993. However, customer relationship management was popularized in 1997, due to Siebel, Gartner and IBM's work. Between 1997 and 2000, leading CRM products were enriched with enterprise resource planning functions, as well as delivery and marketing capabilities. Siebel introduced the first mobile CRM application called Siebel Sales Handheld in 1999. The idea of ​​a cloud-hosted and cloud-shipped customer base was soon adopted by other leading providers at the time, including PeopleSoft, Oracle, and SAP.
The first open-source CRM system was developed by SugarCRM in 2004. During this period, CRM quickly migrated to the cloud, as a result becoming accessible to single entrepreneurs and small teams, and experiencing a massive surge of prices. Around 2009, developers began to consider options to benefit from the momentum of social media, and devised tools to help companies become accessible on all the user's favorite networks. Many startups at that time benefited from this trend to provide exclusive social CRM solutions, including Base and Nutshell. That same year, Gartner arranged and held the first Customer Relationship Management Summit, and summarized the system features that should be offered to be classified as CRM solutions. In 2013 and 2014, most of the popular CRM products are associated with business intelligence and communications software systems to improve corporate communications and end-user experience. The main trend is to replace standard CRM solutions with industry-specific ones, or make them pretty customizable to meet the needs of every business.
In November 2016, Forrester released a report in which "identified nine of the most significant CRM suites from eight leading vendors," among them companies like Infor, Microsoft, and NetSuite.
Maps Customer relationship management
Type
Strategic
Strategic CRM is focused on developing customer-centric business culture.
Operational
The main purpose of a customer relationship management system is to integrate and automate sales, marketing, and customer support. Therefore, these systems typically have dashboards that provide an overall view of the three functions in a single customer view, one page for each customer that a company may own. Dashboards can provide client information, previous sales, previous marketing efforts, and more, summarize all relationships between customers and companies. Operational CRM consists of 3 main components: sales force automation, marketing automation, and service automation.
- Sales force automation works with all stages of the sales cycle, from initially entering contact information to turn potential clients into actual clients. It applies sales promotion analysis, automates tracking of client account history for repeat sales or future sales and sales coordinates, marketing, call center and retail outlets. This prevents duplicate attempts between the seller and the customer and also automatically tracks all contacts and follow-up between both parties.
- Marketing automation focuses on simplifying the overall marketing process to be more effective and efficient. CRM tools with marketing automation capabilities can automate repetitive tasks, for example, sending automated marketing emails at certain times to customers, or posting marketing information on social media. The goal with marketing automation is to turn sales leads into full customers. The current CRM system also works on customer engagement through social media.
- Service automation is part of a CRM system that focuses on direct customer service technology. Through service automation, customers are supported through multiple channels such as phone, email, knowledge base, ticket portal, FAQ, and more.
Analytical
The role of an analytical CRM system is to analyze customer data collected through multiple sources, and present it so that business managers can make more informed decisions. Analytical CRM systems use techniques such as data mining, correlation, and pattern recognition to analyze customer data. This analysis helps improve customer service by finding small, resolvable problems, perhaps, by marketing to different parts of the audience of consumers differently. For example, through an analysis of the behavior of a customer base purchase, the company might see that this customer base has not bought many of its products recently. After scanning through this data, the company may think to market to these subsets of consumers differently, in order to better communicate how the company's products can benefit the group specifically.
Collaborative
The third major objective of a CRM system is to incorporate external stakeholders such as suppliers, vendors, and distributors, and share customer information throughout the organization. For example, feedback can be collected from technical support calls, which can help provide direction for marketing products and services to those customers in the future.
Customer data platform
The customer data platform (CDP) is a computer system used by the marketing department that collects data about individual people from multiple sources into a single database, with which other software systems can interact. In February 2017 there were about twenty companies that sold such systems and revenues for them about US $ 300 million.
Components
The main components of CRM are building and managing customer relationships through marketing, observing relationships as they mature through different phases, managing these relationships at every stage and recognizing that the distribution of relationships to the firm is not homogeneous. When building and managing customer relationships through marketing, companies can leverage tools to help organizational design, incentive schemes, customer structures, and others to optimize the reach of their marketing campaigns. Through recognition of different CRM phases, a business will be able to benefit from seeing the interaction of many relationships as connected transactions. The last factor of CRM highlights the importance of CRM through accounting for the profitability of customer relationships. Through studying certain customer shopping habits, companies may be able to dedicate different resources and amounts of attention to different types of consumers.
Relational Intelligence, or awareness of the various relationships that a customer can have with a company, is an essential component of the key phases of CRM. Companies may be good at capturing demographic data, such as gender, age, income, and education, and connecting them with purchasing information to categorize customers into profit levels, but this is only a company's mechanical view of customer relationships. Therefore this is a sign that the company believes that the customer is still a resource that can be used for selling-or selling opportunities, rather than people looking for interesting and personalized interactions.
CRM systems include:
- Data warehouse technology, used to collect transaction information, to combine information with CRM products, and to provide key performance indicators.
- Opportunity management that helps companies manage unpredictable growth and demand, and implements a good forecasting model to integrate sales history with projected sales.
- A CRM system that tracks and measures marketing campaigns across multiple networks, tracking customer analytics based on clicks and customer sales.
- Some CRM software is available as software as a service (SaaS), sent over the internet and accessed through a web browser instead of being installed on a local computer. Businesses that use software do not buy it, but usually pay recurring subscription fees to software vendors.
- For small businesses, a CRM system can consist of a contact manager system that integrates email, documents, jobs, faxes, and scheduling for individual accounts. CRM systems available for specific markets (legal, financial) often focus on event management and relationship tracking as opposed to return on investment (ROI).
- The CRM system for eCommerce, which focuses on marketing automation tasks, such as: buck rescue, re-engaging users with email, personalization. Customer-centric relationship management (CCRM) is a new sub-discipline that focuses on customer preference, not customer leverage. CCRM aims to add value by engaging customers in individual and interactive relationships.
- Systems for nonprofit and membership-based organizations help track constituencies, fundraising, sponsor demographics, membership levels, membership directories, volunteering and communication with individuals.
Effect on customer satisfaction
Customer satisfaction has important implications for the company's economic performance as it has the ability to increase customer loyalty and usage behavior and reduce customer complaints and possible customer defections. Implementing a CRM approach is likely to have an impact on customer satisfaction and customer knowledge for a variety of different reasons.
First, companies can tailor their offer to each customer. By collecting information across customer interactions and processing this information to find hidden patterns, CRM applications help companies customize their offerings to suit their individual customers' tastes. This adjustment improves the quality of the products and services perceived from the customer's point of view, and because perceived quality is the determinant of customer satisfaction, the CRM application indirectly affects customer satisfaction. The CRM application also allows the company to provide timely and accurate order processing and timely customer requests and ongoing customer account management. For example, Piccoli and Applegate discuss how Wyndham uses IT tools to deliver a consistent service experience across an entire range of properties to customers. Both the enhanced ability to adjust and reduce the variability of the consumption experience enhance the perceived quality, which in turn positively affects customer satisfaction. In addition, CRM applications also help companies more effectively manage customer relationships throughout all phases of relationship, maintenance and cessation initiation.
Customer benefits
With CRM systems, customers are served better on day-to-day processes and with more reliable information, their demand for self-service from companies will be reduced. If there is less need to interact with the company for different problems, the level of customer satisfaction increases. The key benefits of this CRM will be connected hypothetically with three types of equity: relationships, values ​​and brands, and ultimately to customer equity. Eight benefits are recognized for delivering driver value.
- Improved ability to target profitable customers.
- Integrated help across channels
- Increased efficiency and effectiveness of sales reps
- Upgraded price
- Custom products and services
- Improved efficiency and effectiveness of customer service
- An individual marketing message is also called a campaign
- Connect customers and all channels on a single platform.
In 2012, after reviewing previous studies, one selects several more significant benefits in customer satisfaction and summarizes them in the following cases:
- Improve customer service: In general, customers will have some questions, concerns, or requests. CRM services give companies the ability to produce, allocate and manage requests or something that customers create. For example, call center software, which helps connect customers to managers or people who can best help them with existing issues, is one of the CRM capabilities that can be applied to improve efficiency.
- Increased personal service or one-to-one service: Personalizing customer service or one-to-one service gives companies the opportunity to improve understanding and gain knowledge from customers and also have better knowledge of their customers' preferences, requirements and requests.
- Responsive to customer needs: The customer's situation and needs can be understood by a company that focuses on customer needs and requirements.
- Customer segmentation: In CRM, segmentation is used to categorize customers, according to some similarities, such as industry, work or some other characteristic, into a similar group. Despite these characteristics, it can be one or more attributes. This can be defined as a customer grouping based on a well-known discriminator.
- Improve marketing adjustment: The meaning of marketing adjustment is that, the company or organization adjusts and changes its services or products based on presenting different and unique products and services for each customer. With the aim of ensuring that customer needs and requirements are met. Customizations are used by organizations. Companies can put investments in information from customers and then adjust their products or services to sustain the interests of customers.
- Multichannel integration: Multichannel integration shows the point of customer value creation in CRM. On the other hand, the company's ability to integrate multichannel successfully, depends on the organization's ability to collect customer information from all channels and combine it with other relevant information.
- Time savings: CRM will allow companies to interact with customers more often, with personalized messages and communication ways that can be produced quickly and timely, and ultimately they can better understand their customers and therefore look forward to their needs.
- Improve customer knowledge: Companies can create and improve their products and services through information from tracking (e.g. through website tracking) customer behavior to customer tastes and needs. CRM can contribute to a competitive advantage in improving the ability of a company to collect customer information to tailor products and services according to customer needs.
Example
Research has found a 5% increase in customer retention increasing the lifetime customer profits by 50% on average in various industries, as well as a push up to 90% in certain industries such as insurance. Companies that have mastered customer relationship strategy have the most successful CRM programs. For example, MBNA Europe has had an annual profit growth of 75% since 1995. The company is investing heavily in screening cardholder candidates. Once the right clients are identified, the company retains 97% of its profitable customers. They apply CRM by marketing the right products to the right customers. The use of corporate customer cards is 52% above the industry norm, and the average expenditure is 30% more per transaction. Also 10% of their account holders request more information about cross-selling products.
Amazon has also seen great success through its customer proposition. Companies apply personal greetings, collaborative filtering, and more to customers. They also use CRM training for employees to see up to 80% of repeat customers.
Increase CRM within company
Consultants, such as Bain & amp; Companies, argue that it is important for companies that build robust CRM systems to improve their relational intelligence. According to this argument, companies must recognize that people have many different types of relationships with brands. One research study analyzed the relationships between consumers in China, Germany, Spain, and the United States, with more than 200 brands across 11 industries including aviation, automobiles, and the media. This information is valuable because it provides segmented demographic, behavioral, and value-based customers. This type of relationship can be both positive and negative. Some customers view themselves as friends of the brand, while others are enemies, and some are mixed with love-hate relationships with brands. Some relationships are distant, intimate or whatever in between.
Analyzing information
Managers must understand the different reasons for the type of relationship, and give the customer what they are looking for. Companies can collect this information by using surveys, interviews, and more, with current customers. For example, Frito-Lay conducts many ethnographic interviews with customers to try and understand the relationships they want with companies and brands. They found that most customers are adults who use the product to feel happier. They may have enjoyed bright orange, messiness and corporate shapes.
Companies must also improve their relational intelligence from their CRM systems. These days, companies store and receive large amounts of data via email, online chat sessions, phone calls, and more. Many companies do not use this much data well. These are all signs of what kind of relationship customers want with the company, and therefore companies can consider investing more time and effort in building their relational intelligence. Companies can use data mining and web search technologies to understand relational signals. Social media like Facebook, Twitter, blogs, etc. It is also a very important factor in fetching and analyzing information. Understanding customers and capturing this data allows companies to convert customer signals into information and knowledge that companies can use to understand the desired customer potential relationship with the brand.
It is also important to analyze all of this information to determine which relationship proves most valuable. This helps turn data into profits for the company. Stronger bonds contribute to building market share. By managing different portfolios for different segments of the customer base, the company can achieve strategic objectives.
Employee training
Many companies have also implemented training programs to teach employees how to recognize and effectively create strong customer-brand relationships. For example, Harley Davidson sends his employees on the road with customers, who are motorcycle enthusiasts, to help establish relationships. Other employees have also been trained in social psychology and social sciences to help improve strong customer relationships. Customer service representatives should be educated to reward customer relationships, and be trained to understand existing customer profiles. Even the finance and legal departments must understand how to manage and build relationships with customers.
Apps
Implementing new technologies while using a CRM system requires changes in the organizational infrastructure as well as the deployment of new technologies such as business rules, databases, and information technology.
In practice
Call centers
Contact center CRM providers are very popular for small and medium businesses. The system codes for interactions between companies and customers by using analytics and key performance indicators to provide users with information about where to focus their marketing and customer service. This allows agents to have access to caller history to provide personalized customer communications. The goal is to maximize average revenue per user, reduce churn rate and reduce unemployed and unproductive contacts with customers.
Increased popularity is the idea to sort out, or use game design elements and game principles in non-game environments such as customer service environments. Gamification customer service environments include providing elements found in games such as awards and bonus points to customer service representatives as feedback methods for well-done work. Gamification tools can motivate agents by exploiting their desires for appreciation, recognition, achievement, and competition.
Contact center automation
Contact center automation, the practice of having an integrated system that coordinates contacts between the organization and the public, is designed to reduce the repetitive and tedious parts of the contact center agency work. Automation prevents this by having a pre-recorded audio message that helps customers solve their problems. For example, an automated contact center may be able to reroute a customer through a series of commands that ask him/her to select a specific number to talk to a particular contact center agent who specializes in areas where customers have questions. The software tool can also integrate with agent desktop tools to handle customer inquiries and requests. It also saves time on behalf of employees.
Social media
Social CRM involves the use of social media and technology to engage and learn from consumers. Because communities, especially among young people, are increasingly using social networking sites, companies use the site to draw attention to their products, services and brands, with the goal of building customer relationships to increase demand.
Some CRM systems integrate social media sites like Twitter, LinkedIn, and Facebook to track and communicate with customers. These customers also share their own opinions and experiences with the company's products and services, providing more insight to these companies. Therefore, these companies can share their own opinions and also track their customers' opinions.
Enterprise feedback management software platforms, such as Confirmit, Medallia, and Satmetrix, combine internal survey data with trends identified through social media to enable businesses to make more accurate decisions about which products to supply.
Location-based services
CRM systems can also include technologies that create geographic marketing campaigns. The system retrieves information based on the customer's physical location and sometimes integrates it with popular location-based GPS applications. It can be used for network or contact management as well to help increase sales by location.
Business-to-business transactions
Regardless of the general sense that CRM systems are created for customer-centered businesses, they can also be applied to B2B environments to streamline and improve customer management conditions. For the best level of CRM operations in a B2B environment, software should be personalized and delivered at an individual level.
The main difference between business-to-consumer (B2C) and business-to-business CRM systems involves aspects like the size of the contact database and the length of the relationship. Business-to-business firms tend to have smaller, business-to-consumer contact databases, the volume of business-to-business sales is relatively small. There are fewer business-to-business proposition figures, but in some cases, they are much more expensive than business-to-consumer goods and relationships in a business-to-business environment are built over a longer period of time. In addition, business-to-business CRM should be easily integrated with products from other companies. Such integration enables the creation of forecasts about customer behavior based on your purchase history, billing, business success, etc. Applications for business-to-business companies should have the function to connect all contacts, processes, and transactions between customer segments and then prepare paper. Sales process automation is an essential requirement for business-to-business products. This should effectively manage the agreement and advance it through all phases towards signing. Finally, the important point is personalization. It helps business-to-business companies to create and maintain strong and long lasting relationships with customers.
CRM Marketplace
The overall CRM market grew by 12.3 percent by 2015. The following table lists the top vendors in 2012-2015 (figures in millions of dollars) published in the Gartner study.
The four largest vendors offering CRM systems are Salesforce, SAP, Oracle, and Microsoft, which represent 42 percent of the market by 2015. Other providers are also popular for small and medium-sized business markets. Separating CRM providers into nine different categories (Enterprise CRM Suite, MidMarket CRM Suite, Small-Business CRM Suite, sales force automation, incentive management, marketing solutions, business intelligence, data quality, consulting), each category has a different market leader. In addition, applications often focus on professional areas such as health care, manufacturing, and other areas with special branch requirements.
Market trends
In the Gartner CRM Summit 2010 challenge such as "a system trying to capture data from social networking traffic such as Twitter, addressing Facebook pages or other online social networking sites" has been discussed and solutions are provided that will help in bringing in more customers. Many CRM vendors offer subscription-based web tools (cloud computing) and SaaS. Some CRM systems are equipped with mobile capabilities, making information accessible to long distance sales staff.alesforce.com is the first company to provide enterprise applications through a web browser, and has maintained its leadership position.
Traditional providers have recently moved into cloud-based markets through smaller provider acquisitions: Oracle bought RightNow in October 2011 and SAP acquired SuccessFactors in December 2011.
The era of "social customers" refers to the use of social media (Twitter, Facebook, LinkedIn, Google Plus, Pinterest, Instagram, Yelp, customer reviews on Amazon, etc.). CRM's philosophy and strategy has shifted to include social networking and user communities.
Salespeople also play an important role in CRM, as maximizing sales effectiveness and increasing sales productivity is the driving force behind CRM implementation. Empowering sales managers are listed as one of the top 5 CRM trends by 2013.
Another related development is vendor relationship management (VRM), which provides tools and services that allow customers to manage their individual relationships with vendors. VRM development has evolved from efforts by ProjectVRM at the Berkman Center for Internet & amp; Harvard; Community Identity Internet Workshops and Identity Commons, as well as by more and more startup and established companies. VRM is the subject of a cover story in the May 2010 issue of CRM Magazine .
Pharmaceutical companies are some of the first investors in sales force automation (SFA) and some are in the implementation of their third or fourth generation. However, to date, deployments do not extend beyond the SFA - limiting their scope and interest in Gartner analysts.
Another noteworthy trend is the rise of Customer Success as a discipline within the company. More and more companies are forming a Customer Success team as separate from the traditional Sales team and their task by managing existing customer relationships. This trend is driving demand for additional capabilities for a more thorough understanding of customer health, which is the limit for many existing vendors in space. As a result, more and more new entrants enter the market, while existing vendors add capabilities in this area to their suite. By 2017, artificial intelligence and predictive analysis are identified as the latest trends in CRM.
Criticism
Companies face major challenges when trying to implement a CRM system. Consumer firms often manage their customer relationships at random and unprofitable. They may not effectively or adequately use their connection with their customers, due to misunderstanding or misinterpretation of CRM system analysis. Clients who want to be treated more like friends can be treated like just a party for exchanges, rather than unique individuals, because, at times, the lack of a bridge between CRM data and CRM analysis output. Many studies show that customers are often frustrated by the inability of companies to meet their relationship expectations, and on the other hand, companies do not always know how to translate the data they get from CRM software into a viable action plan. In 2003, a Gartner report estimated that over $ 2 billion had been spent on unused software. According to CSO Insights, less than 40 percent of the 1,275 participating companies have a 90 percent adoption rate. Many companies only use CRM systems partially or fragmented. In a 2007 UK survey, four-fifth senior executives reported that their biggest challenge was to ask their staff to use the system they had installed. 43 percent of respondents said they use less than half the functionality of the existing system. However, market research on consumer preferences can increase CRM adoption among developing country consumers.
Customer data collection such as personally identifiable information must strictly comply with customer privacy laws, which often require additional expenses for legal support.
Part of the paradox with CRM comes from the challenge of determining exactly what CRM is and what it can do for a company. The CRM paradigm, also called the "Dark Side of CRM", can involve favoritism and different treatment from multiple customers.
CRM technology can easily become ineffective if there is no proper management, and they are not implemented correctly. Data sets must also be connected, distributed and properly organized, so that users can access the information they need quickly and easily. Research studies also show that customers are increasingly dissatisfied with the contact center experience due to slowness and waiting times. They also request and demand multiple channels of communication with companies, and these channels must transfer information smoothly. Therefore, it is increasingly important for companies to provide a consistent and reliable cross-channel customer experience.
See also
References
Source of the article : Wikipedia
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