From the outside, customers interacting with a company perceive the business as a single entity, despite often interacting with a number of employees in different roles and departments. CRM is a combination of policies, processes, and strategies implemented by an organization to unify its customer interactions and provide a means to track customer information. It involves the use of technology in attracting new and profitable customers, while forming tighter bonds with existing ones.
CRM includes many aspects which relate directly to one another:
• Front office operations;
Direct interaction with customers, e.g. face to face meetings, phone calls, e-mail, online services etc.
• Back office operations;
Operations that ultimately affect the activities of the front office (e.g., billing, maintenance, planning, marketing, advertising, finance, manufacturing, etc.)
• Business relationships;
Interaction with other companies and partners, such as suppliers/vendors and retail outlets/distributors, industry networks (lobbying groups, trade associations). This external network supports front and back office activities.
Get your grade
or your money back
using our Essay Writing Service!
Key CRM data can be analyzed in order to plan target-marketing campaigns, conceive business strategies, and judge the success of CRM activities (e.g., market share, number and types of customers, revenue, profitability).
Proponents of CRM software claim that it doesn't only allow more effective ways of managing customer relationships, but also more customer-centric ways of doing business. Executives often cite the need for the proper tools as a barrier to delivering the experience their customers expect. A 2009 study of over 860 corporate executives revealed only 39% believes that their employees have tools and authority to solve customer problems.
Definition of CRM
Information-technology enabled strategy aimed at identifying, targeting, acquiring, and retaining the best mix of customers. CRM helps in profiling prospects, understanding their needs, and in building relationships with them by providing the most-suitable products and a very high level of customer service. It integrates back and front office systems to create a database of customer contacts, purchases, information requested, technical support, etc. These databases help the firm in presenting a unified-face to its customers and improve the quality of the relationship.
Advantages and Disadvantages of CRM
The main advantage that brings harnessed the implementation of the Administration of the Relationships with the Clients in a enterprise is the increment of the information that this have of its current and potential clients, what allows to address the offer toward its desires and necessities, increasing this way the grade of satisfaction and optimizing its cycle of life.
Other advantages that brings harnessed the implementation of the CRM is the increases of the sales and the reduction of the sale cycle. The disadvantages are so much related with the high costs that has the application of CRM, in terms of economic Resources as likewise human, and with the difficulty that has the handling of the given information the reticence of some sectors to share it and also to the risk of to invade the client's privacy and to expose it to situations not wanted
The micro and small companies have the advantage of having less clients and less personal what facilitates him the handling of the information and makes difficult the appearance of problems to share it.
The fact of managing a low flow of information also reduces since the costs many times it is not necessary to acquire special software to make it but rather you can take manually or in simple programs as the Access.
A problem that you can sometimes present in the companies of smaller size is the lack of formalization of the procedures and the lack of the employees' interest for submit in the importance that they have these and in the philosophy of work of the company
Top 5 On-Demand CRM
• Microsoft Live CRM
Top 5 Open Source CRM
CRM Specialty Solutions
• Partner Relationship Management (PRM)
• CRM Analytics
• Point of Sale (POS)
Always on Time
Marked to Standard
According to Gartner's Sharon Mertz, in 2008 SAP claimed the greatest percent of the CRM market with a 22.5% share, though that's down from a 25.5% in 2007, a drop of 0.8%. It was followed by Oracle with a 16.1% share, Salesforce.com with a 10.6% share and Amdocs with a 4.9% share.
Who's in sixth place? That would be “others” with a 39.6% share of the CRM market.
So, given Gartner's estimate of $19.5 billion in revenue for the CRM market in 2008, a 12.5% increase from 2007's $8.13 billion market figure, the top five vendors certainly appear viable.
The following table lists the top CRM software vendors in 2006-2007 (figures in millions of US dollars) published in a Gartner study.
Vendor 2007 Revenue 2007 Share (%) 2006 Revenue 2006 Share (%) '06-'07 Growth (%) '06-'07 Change in share (%)
1,319.8 16.3 1,016.8 15.5 29.8 +0.8
2,050.8 25.3 1,681.7 26.6 22.0 -1.3
676.5 8.3 451.7 6.9 49.8 +1.4
421.0 5.2 365.9 5.6 15.1 -0.4
332.1 4.1 176.1 2.7 88.6 +1.4
Others 3,289.1 40.6 2,881.6 43.7 14.1 -3.1
Total 8,089.3 100 6,573.8 100 23.1 0
Impact of CRM on Business
Integration with Social Media applications:
CRM vendors are now beginning to offer integration with third party comprehensive social media applications. Social media is information content created by people using highly accessible and scalable publishing technologies to facilitate communications, influence and interaction with peers and with public audiences typically via the Internet and mobile communications networks.
Increased Availability of Social Media Type Functionality:
CRM vendors are now providing access to Social Media type functionality. Social Media can also refer to Web-based services that emphasize online collaboration and sharing among users. It is a world where computers and other technology have shifted from a means of one-way static communication to platforms for interaction and community building.
Increased Use of Business Intelligence Analytical Tools in CRM Solutions:
Business Intelligence Analytical tools, or predictive modeling, now can predict the monetary value and profitability of a particular customer: from profiling customers based on their behavior to segmenting markets, from predicting customer purchases based on past purchase information and psychographic/demographic data and from determining cross-selling opportunities.
Increased Number of Mobile CRM Offerings and a Move Toward Real-Time CRM:
CRM vendors continue to develop and release CRM application modules, especially those that are bundled with or work on a large variety of handheld and/or wireless devices. These include PDAs (with various operating systems), and smart phones that support wireless infrastructure technologies like CDMA (Code Division Multiple Access), GSM (Global System for Multiple communications), TDMA (Time Division Multiple Access), CDPD (Cellular Digital Packet Data), SMS (Short Messaging Services), and packet radio networks.
Increased CRM Offerings via the SaaS Model:
CRM software vendors are increasingly offering CRM software solutions via the SaaS model, which is also referred to as Application Service Provider (ASP) or on-demand solution. A 2007 IDC report predicts that many software companies would derive a majority of their revenues from subscription agreements rather than perpetual licenses by 2010. The SaaS model is attractive to many companies because it can circumvent traditional problems with the CRM client-server model including high prices, cumbersome deployments and software upgrades.
Examples of CRM Implementation
CRM is used to
• Support staff with daily structured activities. This makes it easier to prioritise and timetable workflows based on key metrics important to your business. e.g. each activity is classified and sorted so that workloads can be managed.
• Provide marketing support for campaigns & loyalty programmes. e.g. by tracking the source and status of leads so follow up is timely.
• Provide sales and services a consolidated view of the customer - sometimes called a single point of view. e.g show forecasts of sales pipeline with improved quality of information as prospects are “qualified” according to a methodology and process that gets you the best results.
• Provide all management with key information to review processes and results e.g. this allows the business to determine where resources, including time is best spent and gives an objective framework for planning discussions.
• Structure all customer facing activities e.g. this allows key processes to be templated and replicated to set and enable quality standards for each customer interaction.
• Provide a platform for customer self service - e.g. customers can login and find out about status of their business as well as update records and view any specific news for them on a “one to one” basis.
• Provide a partial view of joint processes to partners - e.g. Partners can supply visibility into shared projects for joint management purposes.
• Centralise key information in a safe and secure place so that the company holds the “IP” rather than a staff member e.g very useful when staff leave the company.
• Can be used to provide external view for shareholders and others as well e.g. an investors portal.
• Create a culture of collaboration within and around the business .e.g. key information within the business goes from being private to being shared.
Suggestions to managers
This Essay is
a Student's Work
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.Examples of our work
Customer relationship management (CRM) is one of the most important tools a company can use to remain viable. CRM is exactly what it sounds like, a system that manages customers, and a tool used to track everything you do that relates to your customers. Given that definition, how does a firm go about implementing a new CRM system that will maximize the information it has about its customers? This is the big question that my company had to answer during the past year.
We decided to go to a completely new CRM system and replace our current one, which wasn't giving us the functionality we desired. Not surprisingly, this has been a long process with many considerations. Following are seven steps that can help any company find and implement not just a new CRM system, but the right system.
1. Decide what you want from a CRM system.
CRM is not exclusively a sales tool; it is a tool that everyone in your company will use to track customer information. The best approach to kicking off the search, therefore, is to assemble a cross-section of all company staff that will use this system and determine what capabilities they need.
Your goal here is to get as many suggestions as possible from this diverse group. You ultimately want to have as deep and broad a list of needs as possible, along with requirements that will help separate the CRM systems that you will be considering. Then prioritize these needs based on their importance. This will go a long way when you need to decide on that one CRM system that you will implement.
Another benefit to performing this step is that you likely will find it easier to get team buy-in on the system you ultimately choose. This is because the individuals and departments most vested in that choice have already told you what to look for.
2. Research various systems and determine the pros and cons.
Based on the input and needs you have gathered, start looking at systems, and eliminate the ones that don't meet your highest priorities. Don't worry about making the final decision here, but make sure to be strict with your comparison of each system's pros and cons. By sticking to your priorities, you find that two or three CRM systems that fit your needs naturally emerge as finalists.
3. Get referrals from users of each system under consideration.
Now is the time to talk to the companies that have practical experience using the two or three CRM systems you are still considering. Engaging these outside referrals as much as possible will help you make a more informed decision in the long run.
These referrals—people who have chosen, implemented, trained on, and used these systems daily—will yield essential information. Consult your list of needs during these conversations, and don't be afraid to ask very detailed questions that focus on your leading priorities. Even if they are not in your industry, these referrals can give you solid information and helpful perspective.
Also, make sure to ask these users what they do not like about their particular CRM system. A major benefit to obtaining the honest opinion of an outside user is that you will not get a sales pitch. These companies and individuals have no vested interest in which system you choose and should be honest with you about their experiences.
4. Decide on a CRM system, and develop a CRM team.
With your needs assessment and referrals gathered, decide on the CRM system that fits your priorities and will get staff buy-in. Then, it is important to turn the project over to a CRM team and let them finish the process.
By creating a smaller CRM team, you streamline the process and remove unnecessary bureaucracy. Your CRM team should include a technical member who will do the installation and setup of your system. You also will need a person who understands your company's processes and procedures and will be a main user. This person will customize the system to meet the specific business needs of your company. This gives you a small group of decision makers that can speak on behalf of your company's departments and their needs.
Depending on the size and complexity of your company, your CRM team may need additional members. If this is the case, ensure you include representatives from all relevant areas of your company who can advocate for the specific needs of their departments.
5. Customize and develop the system to meet your company's needs.
This stage of the process will be the most time-consuming and intense because the CRM team will be developing the system for the entire company. Do not rush this step. Give the team the time and space to complete it correctly. The team must continue to keep the list of priorities in mind during this stage. At the same time, on behalf of the users, the team will need to think about how to make the system as simple and straightforward as possible.
The goal of this step is to create a system that will be easy to implement and learn. The team needs to design the system to capture customer information accurately and to manipulate it efficiently.
6. Develop and implement a training program.
During the customization and development stage, the CRM team will become the experts on the new system and will know how it works from the most basic of levels. Transferring this knowledge is essential to the entire process; therefore, the team's next task will be to develop and implement a training program.
Employees with a good understanding of the application will be more apt to use the new system and use it correctly to the benefit of the entire company. Also, such training gives you a chance to reaffirm your company's processes and procedures, so be sure to incorporate those topics into your CRM system training.
If possible, a degree of individual training is highly recommended. This will allow team members to ask questions relevant to their job functions and will help facilitate their learning process. Whatever method you choose to train employees, make sure they are all on the same page when you decide to switch to the new system. Establish a solid date to complete the training so that everyone understands when they need to be ready.
7. Roll out, review, and improve your system.
After the new CRM system is in place and everyone has been trained, it's time to start using the system. After a few weeks of use, a review of the system is in order. Is everyone using it correctly? Is it as functional as desired? What changes can you make to improve the system? This last step may be the hardest because some employees may resist the change, the training may not have been effective, or the system may need to be improved to meet employee needs. Whatever the case, do a review periodically and make improvements based on user feedback. This review will provide you with insight into ways you continuously can strengthen your CRM system and enhance its functionality.
Customers in today's world want to work with companies that go the extra mile in the services they offer. A strong and functional CRM system used by the entire company is a great step in the right direction. Remember, customer relationship management is a total company function and not just a sales tool. From the top of your organization to the bottom, everyone needs to be on the same page. Follow these steps, pay close attention to the details, and your new CRM system will help all facets of your company.
Eric Hunt, Boomer Consulting, Inc. www.microsoft.com