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Customer relationship management - Wikipedia, the Iree encyclopedia

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Customer relationship management
From Wikipedia, the free encyclopedia
(Redirected from Customer Relationship Nanagement)
Customer Relationship Management (CRN) includes the methodologies, strategies,
software, and web-based capabilities that help an enterprise organize and manage customer
relationships. !t is the collection and distribution of all data to all areas of the business. The
general purpose of CRN is to enable organizations to better manage their customers through
the introduction of reliable systems, processes and procedures for interacting with those
!n today's competitive business environment, a successful CRN strategy cannot be implemented
by simply installing and integrating a software package designed to support CRN processes. A
holistic approach to CRN is vital for an effective and efficient CRN policy. This approach includes
training of employees, a modification of business processes based on customers' needs and an
adoption of relevant !T systems (including software and maybe hardware) andfor usage of !T
services that enable the organization or company to follow its CRN strategy. CRN services can
even replace the acquisition of additional hardware or CRN software licences.
The term itself is meant to describe the whole business strategy (or lack of one) oriented on
customer needs. The main misconception of CRN is that it is only software, instead of whole
business strategy. To be effective, the CRN process needs to be integrated end-to-end across
marketing, sales, and customer service. A good CRN program needs to do the following:
!dentify customer success factors
Create a customer-based culture
Adopt customer-based measures
Develop an end-to-end process to serve customers
Recommend what questions to ask to help a customer solve a problem
Recommend what to tell a customer with a complaint about a purchase
Track all aspects of selling to customers and prospects as well as customer support.
Najor areas of CRN focus on service automated processes, personal information gathering and
processing, and self-service. !t attempts to integrate and automate the various customer serving
processes within a company.
1 Architecture of CRN
1.1 Operational CRN
1.2 Analytical CRN
1.3 Collaborative CRN
2 Purposes of Customer Relationship Nanagement
3 !mproving customer relationships
Customer relationship management - Wikipedia, the Iree encyclopedia
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+ Technical functionality
5 Privacy and ethical concerns
6 Setting up a framework for CRN
7 CRN in Business
8 See also
9 External links
Architecture of CRM
There are three parts of application architecture of CRN:
Operational - automation to the basic business processes (marketing, sales, service)
Analytical - support to analyze customer behavior, implements business intelligence alike
Collaborative - ensures the contact with customers (phone, email, fax, web, sms, post, in
Operational CRM
Operational CRN means supporting the so-called "front office" business processes, which
include customer contact (sales, marketing and service). Tasks resulting from these processes
are forwarded to employees responsible for them, as well as the information necessary for
carrying out the tasks and interfaces to back-end applications are being provided and activities
with customers are being documented for further reference.
Operational CRN provides the following benefits:
Delivers personalized and efficient marketing, sales, and service through multi-channel
Enables a 360-degree view of your customer while you are interacting with them
Sales people and service engineers can access complete history of all customer interaction
with your company, regardless of the touch point
According to Gartner Group, the operational part of CRN typically involves three general areas
of business:
Sales force automation (SFA)
SFA automates some of the company's critical sales and sales force management functions,
for example, leadfaccount management, contact management, quote management,
forecasting, sales administration, keeping track of customer preferences, buying habits, and
demographics, as well as sales staff performance. SFA tools are designed to improve field
sales productivity. Key infrastructure requirements of SFA are mobile synchronization and
integrated product configuration.
Customer service and support (CSS)
CSS automates some service requests, complaints, product returns, and information
requests. Traditional internal help desk and traditional inbound call-center support for
customer inquiries are now evolved into the "customer interaction center" (C!C), using
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multiple channels (Web, phoneffax, face-to-face, kiosk, etc). Key infrastructure requirements
of CSS include computer telephony integration (CT!) which provides high volume processing
capability, and reliability.
Enterprise marketing automation (ENA)
ENA provides information about the business environment, including competitors, industry
trends, and macroenviromental variables. !t is the execution side of campaign and lead
management. The intent of ENA applications is to improve marketing campaign efficiencies.
Functions include demographic analysis, variable segmentation, and predictive modeling
occur on the analytical (Business !ntelligence) side.
!ntegrated CRN software is often also known as "front office solutions." This is because they
deal directly with the customer.
Nany call centers use CRN software to store all of their customer's details. When a customer
calls, the system can be used to retrieve and store information relevant to the customer. By
serving the customer quickly and efficiently, and also keeping all information on a customer in
one place, a company aims to make cost savings, and also encourage new customers.
CRN solutions can also be used to allow customers to perform their own service via a variety of
communication channels. For example, you might be able to check your bank balance via your
WAP phone without ever having to talk to a person, saving money for the company, and saving
you time.
Analytical CRM
!n analytical CRN, data gathered within operational CRN andfor other sources are analyzed to
segment customers or to identify potential to enhance client relationship. Customer analysis
typically can lead to targeted campaigns to increase share of customer's wallet. Examples of
Campaigns directed towards customers are:
Acquisition: Cross-sell, up-sell
Retention: Retaining customers who leave due to maturity or attrition.
!nformation: Providing timely and regular information to customers.
Nodification: Altering details of the transactional nature of the customers' relationship.
Analysis typically covers but is not limited to:
Decision support: Dashboards, reporting, metrics, performance etc.
Predictive modelling of customer attributes
Strategy and research.
Analysis of Customer data may relate to one or more of the following analyses:
Campaign management and analysis
Contact channel optimization
Contact Optimization
Customer Acquisition f Reactivation f Retention
Customer Segmentation
Customer Satisfaction Neasurement f !ncrease
Sales Coverage Optimization
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Fraud Detection and analysis
Financial Forecasts
Pricing Optimization
Product Development
Program Evaluation
Risk Assessment and Nanagement
Data collection and analysis is viewed as a continuing and iterative process. !deally, business
decisions are refined over time, based on feedback from earlier analysis and decisions.
Therefore, most successful analytical CRN projects take advantage of a data warehouse to
provide suitable data.
Business !ntelligence is a related discipline offering some more functionality as separate
application software.
Collaborative CRM
Collaborative CRN facilitates interactions with customers through all channels (personal, letter,
fax, phone, web, e-mail) and supports co-ordination of employee teams and channels. !t is a
solution that brings people, processes and data together so companies can better serve and
retain their customers. The datafactivities can be structured, unstructured,conversational,
andfor transactional in nature.
Collaborative CRN provides the following benefits:
Enables efficient productive customer interactions across all communications channels
Enables web collaboration to reduce customer service costs
!ntegrates call centers enabling multi-channel personal customer interaction
!ntegrates view of the customer while interaction at the transaction level
Purposes of Customer Relationship Management
CRN, in its broadest sense, means managing all interactions and business with customers. This
includes, but is not limited to, improving customer service. A good CRN program will allow a
business to acquire customers, service the customer, increase the value of the customer to the
company, retain good customers, and determine which customers can be retained or given a
higher level of service. A good CRN program can improve customer service by facilitating
communication in several ways:
Provide product information, product use information, and technical assistance on web sites
that are accessible 2+ hours a day, 7 days a week.
!dentify how each individual customer defines quality, and then design a service strategy for
each customer based on these individual requirements and expectations.
Provide a fast mechanism for managing and scheduling follow-up sales calls to assess
post-purchase cognitive dissonance, repurchase probabilities, repurchase times, and
repurchase frequencies.
Provide a mechanism to track all points of contact between a customer and the company,
and do it in an integrated way so that all sources and types of contact are included, and all
users of the system see the same view of the customer (reduces confusion).
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Help to identify potential problems quickly, before they occur.
Provide a user-friendly mechanism for registering customer complaints (complaints that are
not registered with the company cannot be resolved, and are a major source of customer
Provide a fast mechanism for handling problems and complaints (complaints that are
resolved quickly can increase customer satisfaction).
Provide a fast mechanism for correcting service deficiencies (correct the problem before
other customers experience the same dissatisfaction).
Use internet cookies to track customer interests and personalize product offerings
Use the !nternet to engage in collaborative customization or real-time customization.
Provide a fast mechanism for managing and scheduling maintenance, repair, and on-going
support (improve efficiency and effectiveness).
The CRN can be integrated into other cross-functional systems and thereby provide
accounting and production information to customers when they want it.
Improving customer relationships
CRN programs also are able to improve customer relationships. Proponents say this is so
CRN technology can track customer interests, needs, and buying habits as they progress
through their life cycles, and tailor the marketing effort accordingly. This way customers get
exactly what they want as they change.
The technology can track customer product use as the product progresses through its life
cycle, and tailor the service strategy accordingly. This way customers get what they need as
the product ages.
!n industrial markets, the technology can be used to micro-segment the buying centre and
help coordinate the conflicting and changing purchase criteria of its members.
When any of the technology-driven improvements in customer service (mentioned above)
contribute to long-term customer satisfaction, they can ensure repeat purchases, improve
customer relationships, increase customer loyalty, decrease customer turnover, decrease
marketing costs (associated with customer acquisition and customer training"), increase
sales revenue, and thereby increase profit margins.
Repeat purchase, however, comes from customer satisfaction - which in turn comes from a
deeper understanding of each customer, their individual business challenges and proposing
solutions for those challenges rather than a "one size fits all" approach.
CRN software enables sales people to achieve this one on one approach to selling and can
automate some elements of it via tailorable marketing communications. However, all of
these elements are facilitated by or for humans to achieve - CRN is therefore a
company-wide attitude as much as a software solution.
Technical functionality
A CRM solution is characterised by the following functionality:
scalability - the ability to be used on a large scale, and to be reliably expanded to whatever
scale is necessary.
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multiple communication channels - the ability to interface with users via many different
devices (phone, WAP, internet, etc)
workflow - the ability to trigger a process in the backoffice system, e. g. Email Response,
assignment - the ability to assign requests (Service Requests, Sales Opportunities) to a
person or group.
database - the centralised storage (in a data warehouse) of all information relevant to
customer interaction
customer privacy considerations, e.g. data encryption and the destruction of records to
ensure that they are not stolen or abused.
Privacy and ethical concerns
CRN programs are not however considered universally good - some feel it invades customer
privacy and enable coercive sales techniques due to the information companies now have on
customers - see persuasion technology. However, CRN does not necessarily imply gathering
new data, it can be used merely to make "better use" of data the corporation already has. But
in most cases they are used to collect new data.
Some argue that the most basic privacy concern is the centralised database itself, and that
CRNs built this way are inherently privacy-invasive. See the commercial version of the debate
over the carceral state, e.g. Total !nformation Awareness program of the United States federal
Setting up a framework for CRM
When setting up a CRN segment for a company it might first want to see what profile
aspects it feels are relevant to its business, such as what information it needs to serve its
customers, the customer's past financial history, the effects of the CRN segment and what
information is not useful. Being able to eliminate unwanted information is can be a large
aspect of implementing CRN systems.
When designing a CRN's structure, a company may want to consider keeping more
extensive information on their primary customers and keeping less extensive details on the
low-margin clients.
CRM in Business
The use of internet sites and specifically e-mail, in particular, are often touted as less expensive
communication methods in comparison to traditional ones such as telephone calls. These types
of technologies service can be very helpful, but it is completely useless to a business that
cannot reach its customers. Some major companies believe that the majority of their clients
trust other means of communication, like telephone, more than they trust e-mail. Clients,
however, are usually not the ones to blame because it is often the manner of connecting with
consumers on a personal level making them feel as though they are cherished as customers. !t
is up to the companies to focus on reaching every customer and developing a relationship.
!t is possible for CRN software to run an entire business. From prospect and client contact tools
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to billing history and bulk email management. The CRN system allows a business to maintain all
customer records in one centralized location that is accessible to an entire organization through
password administration. Front office systems are set up to collect data from the customers for
processing into the data warehouse. The data warehouse is a back office system used to fulfill
and support customer orders. All customer information is stored in the data warehouse. Back
office CRN makes it possible for a company to follow sales, orders, and cancellations. Special
regressions of this data can be very beneficial for the marketing division of a firmfcompany.
See also
List of CRN vendors
Business intelligence
Predictive dialer
customer experience management
sales force management system
information technology management
management information systems
Software as a Service
vendor-independent solutions provider
Customer Reference Nanagement
Call Center
Database marketing
External links
Customer Relationship Nanagement
(http:ffdmoz.orgfBusinessfE-CommercefCustomer_Relationship_Nanagementf) at the Open
Directory Project
CRN Association (http:ffwww.crm-a.orgf)
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This page was last modified 08:09, 22 Narch 2006.
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