What Is the Scope of CRM?

CRM, or customer relationship management, is concerned with the development and maintenance of mutually beneficial relationships with strategically significant partners. Its focus is the creation of long-term value, and not just short-term profits, for the company and all it works with. The scope of CRM can thus be defined according to its constituencies, how longterm value can be created for and with them and the benefits of doing so. The Customer

The customer is of key importance because only relationships with customers generate revenues for a company. Establishing a good long-term relationship with customers can take the form of the provision of benefits such as special prices and preferential treatment. Doing so can bring about drastic increases in value due to frequent sales from satisfied customers, positive word of mouth, a reduced need for product sampling and advertising, and increased possibility of crossselling or purchasing of other products. The Suppliers Suppliers provide input, such as raw materials, technologies, components, investment, human resources and expertise, to the company's value chain. In 2010 companies have tended to shift to a smaller number of suppliers and create and maintain long-term relationships with them. Enhanced performance can result from improved communication and coordination with this set of suppliers. Purchasing costs can be reduced thanks to elimination of the need to constantly seek cheaper sources. With fewer vendors, increased cooperation between the remaining parties in the form of management-information system alignment and customer-information sharing becomes possible. The Owners

Companies may remain private for the duration of their lifespan, remaining the property of single proprietors or many owners. Other companies may start out that way, but at certain points may elect to go public and sell shares in order to spread liability or raise funds for future expansion. Whichever category a company may fall under, it is paramount for its management to establish productive relationships with its owners and create value for them in the form of enduring company and stock value in the long run. A poor long-term relationship can result in investors selling out and in drops in stock value, or in changes of ownership if the company is sold. The Employees

Employees are central to CRM practitioners. Many businessmen, such as Bill Marriott and Richard Branson, claim that their employees or "internal customers" are their most important constituency, not the customers per se. Should employees be satisfied and happy with their jobs, they will be more apt to provide noteworthy service to the company's external customers. In short, employee satisfaction drives customer satisfaction. A positive climate for service is less rule-driven, more customer-orientated, and more supportive of personal initiatives.

According to one industry view, CRM consists of: Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns with clear goals and objectives, and generate quality leads for the sales team. Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices) Allowing the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service. Providing employees with the information and processes necessary to know their customers, understand their needs, and effectively build relationships between the company, its customer base, and distribution partners. CRM uses technology, strategic planning and personal marketing techniques to build a relationship that increases profit margins and productivity. It uses a business strategy that puts the customer at the core of a companies processes and practices. It requires this customer focused business philosophy to support effective sales, marketing, and customer service and order fulfillment. Regardless of company size or industry, businesses have begun to recognize the value and importance of customer retention and are embracing new technology for automating customer service and support. For the new millennium, it seems that the customer has finally become King!!! Customers can be divided into three zones: 1. Zone of defection where customers are extremely hostile and have the lowest level of satisfaction. 2. Zone of indifference where customers are not sure. They have a medium level of satisfaction and loyalty towards the company. 3. The third level of customers is in the zone of affection described as Apostles. CRM focuses on bringing customers from level 1 to level 3 and retaining apostle customers. Customer demands for customization is increasing with every passing day. This has made companies shift their focus from mass production to mass customization. The present scenario of companies using poorly implemented multi channel strategies for living upto the expectations of customers is bringing both customer satisfaction and customer loyalty down the ladder. Today any company can copy products or services offered by other companies. If the new entrant adds features like less order turn around time and direct communication then established players are bound to have sleepless nights. Organizations that implement CRM and turn their business into e-businesses will find their competitors customers ready to welcome them with a smile.

The top four reasons for implementing CRM are: Gaining customer confidence and loyalty Providing personalized service to customers Acquiring better knowledge of customers and their buying habits Differentiating themselves from the competition

The Importance of CRM Customer Relationship Management

CRM Customer Relationship Management is one of the newest innovations in customer service today. CRM stands for customer relationship management and helps the management and customer service staffs cope with customer concerns and issues. CRM involves gathering a lot of data about the customer. The data is then used to facilitate customer service transactions by making the information needed to resolve the issue or concern readily available to those dealing with the customers. This results in more satisfied customers, a more profitable business and more resources available to the support staff. Furthermore, CRM Customer Relationship Management systems are a great help to the management in deciding on the future course of the company. As mentioned, there is much data needed for the CRM system to work. These fields include the customer name, address, date of transactions, pending and finished transactions, issues and complaints, status of order, shipping and fulfillment dates, account information, demographic data and many more. This information is important in providing the customer the answer that he or she needs to resolve the issue without having to wait for a long time and without going to several departments. With just a few mouse clicks, a customer support representative for example can track the location of the customer's package or order. This is infinitely better than the cumbersome process of tracking shipments previously. Furthermore, the customer service representative will also be able to see the previous concerns of the customer. This is a great help especially if the customer is calling about the same issue since he or she will not have to repeat the story all over again. This results in less time in resolving the issue, thus, higher productivity of the support staff. CRM Customer Relationship Management systems are also important to the top management because it provides crucial data like customer satisfaction and efficiency of service by the frontline crews. A piece of customer relationship management software will also be able to generate the needed reports for product development or new concepts. Furthermore, this system will also be a great help for the top management in deciding the company's future course of action, whether it involves phasing out one of the products on the shelves or making adjustments to one of the products sold. The reports generated by CRM systems are also invaluable to your advertising and marketing planners, as they will be able to pinpoint which ideas works and which do not. Because of CRM systems, you will be able to release advertisements or plan marketing campaigns more in tune with your target market. This will also lead to more responses to your advertisement and a more effective marketing campaign.

Successful integration of a CRM Customer Relationship Management system in your company, however, might not be as easy as it seems. The following might give you an insight why CRM systems fail in some companies... Most companies fail to prepare for CRM systems. By this, I mean that most companies fail to integrate all the departments that need to share the information for it to be effective. Furthermore, CRM units scattered all over the company's departments is often more effective than just making one big CRM department. This will ensure that each department will get the information and data that they need. A CRM system will also help you a lot in expanding your business. As CRM systems are capable of handling enormous amounts of data, CRM systems will help you a lot in coping with the increased numbers of customers and data. With a CRM Customer Relationship Management system installed and properly utilized, you can be sure that all data is maximized and used to ensure that your business will be successful and your customers a lot more satisfied than before.

CRM Challenges
Companies around the world have leveraged CRM strategies to gain competitive advantage. As more and more companies rush to implement CRM, precautions must be taken to do it right. It is approximated that 50-70% CRM implementations fail, depending on the Industry vertical. Hence, it is essential to identify the key challenges, address risks and build a strategy that can make your CRM successful. CRM is full of talk about strategy, but at the end of the day, someone has to lead the way and implement. Listed below are some practical tips to consider when building effective CRM strategies and implementation plans. 1. Understanding of CRM? CRM is not software. Its a business philosophy. It is a strategy, implemented using a software solution that typically covers all customer facing departments like sales, marketing, customer service, etc of a company. Hence CRM is a term, collectively used to refer to a combination of strategy & software. 2. Getting Clarity on Objectives What are the set of objectives the company wishes to achieve with CRM? Trivial as it may sound, a majority of implementations dont have these goals spelled out. Ensure that these objectives are listed and define a measurement metrics to be used to access the success of the implementation. Without these, the companies cant access the benefits or the ROI of the CRM system.

3. No Core CRM Team Unlike other software implementations, IT team alone should not be expected to roll out a CRM system. It is very critical for companies to form a core CRM team, which in addition to IT draws participation from Top Management, Senior Executives of Sales, Marketing and Customer Service departments and finally the end-users. Decisions related to the implementation should be discussed in this forum. 4. The Costing Ice-berg It is not unusual for CRM implementations to overrun costs and timelines. When assessing the costing always calculate the Total Cost of Ownership (TCO). There are two ways of getting CRM, the license model or the ASP (hosted) model. In the licensing model, licenses typically represent 9 - 18% of the TCO. The actual TCO will need to include the cost of hardware, software, engineering, operations, AMCs, etc. On the other hand, in the ASP model, a subscription fee represents the true TCO. Since ASP models offer a fully managed and a continuously evolving system, it also saves implementation time, upgrade costs and ownership hassles. Any implementation delays also have a cost associated with it, in form of lost time and opportunity. 5. Product Evaluation Metrics In most companies, investment in IT are need based. With time, this buying pattern results in multiple systems that fragment customer data. While short-listing CRM products, it is essential to analyze overall capabilities of the product, in addition to the need driver module. As the company matures in its CRM initiative, the expectation from its CRM system multiplies. As a rule of thumb, consider only those CRM products that offer multiple modules like Sales Force Automation, Marketing Automation, Customer Support & Services, etc. This will enable companies to span horizontally, as requirements evolve. 6. Expectation Curve Every CRM implementation starts with a desire to improve productivity and streamline processes, fast. However, CRM implementation is a cultural change. It has to be planned, and executed in phases. If the change is too fast, it will get derailed, if the change is too slow, CRM will pale into obsceneness. Dont compromise on your expectation, but be sure to have a roadmap to get there. Remember, Rome was not built in a day. 7. Getting User Adoption User Adoption is the key for success of any CRM. It is important to design effective training programs in order to provide enough skills and understanding to end users for them to be able to effectively use the system. Ensure that the user interface is kept simple. Consultants often underestimate or miss the motivation required to get the end-users to start using the system. Consider the sales executives, their motivation is to meet the targets to get to the incentive cheque. They are happiest when selling, to them everything else is a waste of time. Dont expect

them to navigate complex screens or fill detailed time consuming information because it simply wont fly. 8. Managing the Application Once the CRM has been rolled-out, it is important to re-align the working culture of teams around it. At times, the As-is bug bites people. To illustrate, the VP sales direct his sales team to carry excel sheet prints of their pipeline when coming for a review. Here either the report was not configured well in the system, or users have not been updating it enough. Such scenarios need immediate correction or else the CRM system will slowly loose its relevance. The core team must review such anomalies from time-to-time. 9. Process, Process, Process Clearly defined processes and their enforcement are critical to the success of any CRM rollout. The objective is to cut out the ambiguity in the system. It is advisable to create a central depositary, accessible to all, which store all the process definitions. Some key processes that need to be defined are Change Management process, Feature re-evaluation process, Success evaluation process, Business flows, etc. Any process implemented via CRM, must map your real-world process and vice-versa. 10. Finding the Right partner The rate of CRM success considerably goes up with the right solution partner. While strategy consultants are good, it is the solution partner who will make it work. Ideally select a partner who can do both, strategy & implementation. It is important that your partner shares the risks of your implementation. Pay only for success. While global knowledgebase is impressive, local issues can often negate these learnings. Work with a vendor who understands local - work culture, technology limitations, cultural sensitivities and is willing to listen.