CUSTOMER RELATIONSHIP MANAGEMENT

Customer relationship Management



Customer relationship Management

Introduction

Customer relationship management (CRM) is a combination of organizational strategy, information systems, and technology that is focused on providing better customer service. CRM uses emerging technology that allows organizations to provide fast and effective customer service by developing a relationship with each customer through the effective use of customer database information systems. The objectives of CRM are to acquire new customers, retain the right current customers, and grow the relationship with an organization's existing customers. An integrated business model that ties together technology, information systems, and business processes along the entire value chain of an organization is critical to the success of CRM.

CRM can also be considered a corporate strategy because it is a fundamental approach to doing business. The goal is to be customer-focused and customer-driven, running all aspects of the business to satisfy the customers by addressing their requirements for products and by providing high-quality, responsive customer service. Companies that adopt this approach are called customer-centric, rather than product-centric.

To be customer-centric, companies need to collect and store meaningful information in a comprehensive customer database. A customer database is an organized collection of information about individual customers or prospects. The database must be current, accessible, and actionable in order to support the generation of leads for new customers while supporting sales and the maintenance of current customer relationships. Smart organizations are collecting information every time a customer comes into contact with the organization. Based on what they know about the individual customer, organizations can customize market offerings, services, programs, messages, and choice of media. A customer database ideally would contain the customer's history of past purchases, demographics, activities, preferred media, and other useful information. Also, this database should be available to any organizational units that have contact with the customer.( Beasty, 2005 18)

CRM has also grown in scope. CRM initially referred to technological initiatives to make call centers less expensive and more efficient. Now, a lot of organizations are looking at more macro organizational changes. Organizations are now asking how they can change their business processes to use the customer data that they have gathered. CRM is changing into a business process instead of just a technology process.

Development Of CRM

Although there are now many software suppliers for CRM, it began back in 1993 when Tom Siebel founded Siebel Systems Inc. Use of the term CRM is traced back to that period. In the mid-1990s CRM was originally sold as a guaranteed way to turn customer data into increased sales performance and higher profits by delivering new insights into customer behaviors and identifying hidden buying patterns buried in customer databases. Instead, CRM was one of the biggest disappointments of the 1990s. Some estimates have put CRM failure rates as high as 75 percent. But more than a decade later, more firms in the United States and Europe are appearing willing to give CRM another try. A 2005 study by the Gartner Group, found 60 percent of midsize businesses intended to adopt or expand ...