Customer relationship management

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Knowing customers today is as important as ever. No so-called “new economy” will ever change that. However, we have new, complex tools to help us do this; they collect and analyze information to help us gain closer relationships to customers, derive new revenue opportunities, and target marketing initiatives for maximum impact.

We must also realize that these customers have more ways to interface with organizations today—websites, sales reps, cashiers, and call centers to name a few. Using a method (such as customer relationship management (CRM)) to get a macro view of the customer is invaluable in today’s fragmented communication environments. However, like enterprise resource planning (ERP) systems, CRM systems will only be effective if organizations socialize the project goals and actually use the tools. These are a CRM implementation’s biggest challenges. It is not the software; it is establishing use of the software. Many corporations have failed at this. In his CIO Magazine article “The ABCs of ERP,” Christopher Koch reported “One Fortune 500 organization is on its fourth try at CRM because the sales force has rejected all previous attempts at sharing customer information.” Changing mindsets must be a top priority.

CRM systems are evolving. Indeed, out-of-the-box products exist that can marginally increase an organization’s effectiveness. However, the next generation of CRM is trying to integrate more effectively with an organization’s ERP initiatives to see how customer buying patterns affect manufacturing, human resources, finance, and long range planning. In this environment, the data warehouse is key; collecting, storing, and analyzing information effectively is critical to an organization’s success at recreating the sense of that market of old where buyers and sellers meet, look at each other in the eye, and connect.

Elements of a CRM Application

The typical CRM application has three constituent components: operational, analytical, and collaborative. The latter one moves CRM into the venue of a converged IP application.

The operational support elements are directly associated with the three primary corporate elements impacted by a CRM implementation: marketing, sales, and customer service. Enterprise marketing automation (EMA) is a set of applications designed to provide information about the overall business environment. This includes dissemination of information about the general marketplace, customer trends and demographics, competition, emerging technologies, and other industry trends. It is primarily concerned with maximizing the impact of marketing campaigns and managing leads. Sales force automation (SFA) is concerned with automating the day-to-day activities of the sales force, including such things as funnel and contact management, quote and RFP response tracking, sales force performance management and compensation, and report generation. Customer service and support (CSS) is primarily concerned with post sales customer and product support. It provides automation via multiple interfaces (e.g., Web, phone, email, kiosk, face-to-face) for customer service requests, post sales surveys, information requests, product returns, and complaints.

The analytical component of a CRM is concerned with high-level processing and analysis of information gathered via the operational component. The primary purpose of this component is to mine the gathered customer data for information that can lead to targeted marketing and/or sales campaigns designed to increase marketshare or wallet share. Analysis looks for trends in customer buying by various demographic variables, and predictive modeling to guide future sales and marketing activities. The results of this analysis is what visitors see when they examine a particular book; they also receive a list of the other items bought by people who bought the original book.

Finally, modern day CRM products are closely tied to interpersonal communication and collaborative platforms. These include computer telephony integration (CTI) use in call centers and on websites, integration of websites with instant messaging (IM) and/or email systems.

Characteristics of an Effective CRM Application

Characteristics of an Effective CRM Application

The specific required characteristics of a CRM application may differ depending on the size and type of organization implementing it. In general, however, there are six desirable characteristics.

  • Security: The CRM application is an interface to a potentially vast amount of customer information. This means security will be a significant concern, especially where there are significant regulatory requirements for privacy, as there are in the financial and healthcare verticals. And the security must not extend only to application access but must also take into consideration the transmission of customer information between locations and the storage of said information in a secure fashion.
  • Database driven: The heart of an effective CRM application is a database that stores all customer-related interaction. This database must be efficient, secure, reliable, and extendable.
  • Assignment management: Interactions with customers will entail various possible requests from the customer, for anything from product information to service requests. The CRM system must be able to accept and track assignments, as well as make them in an automated fashion wherever possible.
  • Multichannel: The CRM application must support customer interaction by a variety of channels, including traditional voice, website, IM, IP voice, voice-enabled IM, cell phones, WAP, and blogs.
  • Scalable: Although CRM trials may begin small, or be deployed initially in a smaller company, they must be able to scale to whatever size and scope the company grows to or can envision. This is a critical consideration in exploring particular products
  • Workflow-oriented: The CRM system should integrate with back-office systems and track workflow, especially for sales and customer service purposes.

CRM Vendors

Some of the primary vendors of CRM software are listed below. This list is not exhaustive.

  • Open Source
    • Centraview
    • Compiere
    • Hipergate
    • SugarCRM
    • vtiger CRM
  • Commercial
    • Ariba
    • Centric CRM
    • FrontRange Solutions
    • IBM
    • Microsoft
    • Onyx Software Corporation
    • Oracle/Sieble/PeopleSoft
    • Sage
    • SAP
    • SSA Global