Customer relationship management

Customer relationship management (CRM) is a widely-implemented strategy for managing a companys interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processesprincipally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management describes a company-wide business strategy including customerinterface departments as well as other departments. Measuring and valuing customer relationships is critical to implementing this strategy.

Benefits of CRM
A CRM system may be chosen because it is thought to provide the following advantages:
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Quality and efficiency Decrease in overall costs Decision support Enterprise agility Customer Attention

Challenges
Successful development, implementation, use and support of customer relationship management systems can provide a significant advantage to the user, but often, there are obstacles that obstruct the user from using the system to its full potential. Instances of a CRM attempting to contain a large, complex group of data can become cumbersome and difficult to understand for an ill-trained user. Additionally, an interface that is difficult to navigate or understand can hinder the CRMs effectiveness, causing users to pick and choose which areas of the system to be used, while others may be pushed aside. This fragmented implementation can cause inherent challenges, as only certain parts are used and the system is not fully functional. The increased use of customer relationship management software has also led to an industry-wide shift in evaluating the role of the developer in designing and maintaining its software. Companies are urged to consider the overall impact of a viable CRM software suite and the potential for good or harm in its use.

Complexity

Tools and workflows can be complex, especially for large businesses. Previously these tools were generally limited to simple CRM solutions which focused on monitoring and recording interactions and communications. Software solutions then expanded to embrace deal tracking, territories, opportunities, and the sales pipeline itself. Next came the advent of tools for other client-interface business functions, as described below. These tools have been, and still are, offered as on-premises software that companies purchase and run on their own IT infrastructure.
Poor usability

One of the largest challenges that customer relationship management systems face is poor usability. With a difficult interface for a user to navigate, implementation can be fragmented or not entirely complete. The importance of usability in a system has developed over time. Customers are likely not as patient to work through malfunctions or gaps in user safety, and there is an expectation that the usability of systems should be somewhat intuitive: it helps make the machine an extension of the way I think not how it wants me to think. An intuitive design can prove most effective in developing the content and layout of a customer relationship management system. Two 2008 case studies show that the layout of a system provides a strong correlation to the ease of use for a system and that it proved more beneficial for the design to focus on presenting information in a way that reflected the most important goals and tasks of the user, rather than the structure of the organization. This ease of service is paramount for developing a system that is usable. In many cases, the growth of capabilities and complexities of systems has hampered the usability of a customer relationship management system. An overly complex computer system can result in an equally complex and non-friendly user interface, thus not allowing the system to work as fully intended. This bloated software can appear sluggish and/or overwhelming to the user, keeping the system from full use and potential. A series of 1998 research indicates that each item added to an information display can significantly affect the overall experience of the user.
Fragmentation

Often, poor usability can lead to implementations that are fragmented isolated initiatives by individual departments to address their own needs. Systems that start disunited usually stay that way: siloed thinking and decision processes frequently lead to separate and incompatible systems, and dysfunctional processes. A fragmented implementation can negate any financial benefit associated with a customer relationship management system, as companies choose not to use all the associated features factored when justifying the investment. Instead, it is important that support for the CRM system is companywide. The challenge of fragmented implementations may be mitigated with improvements in late-generation CRM systems

Business reputation

Building and maintaining a strong business reputation has become increasingly challenging. The outcome of internal fragmentation that is observed and commented upon by customers is now visible to the rest of the world in the era of the social customer; in the past, only employees or partners were aware of it. Addressing the fragmentation requires a shift in philosophy and mindset in an organization so that everyone considers the impact to the customer of policy, decisions and actions. Human response at all levels of the organization can affect the customer experience for good or ill. Even one unhappy customer can deliver a body blow to a business. Some developments and shifts have made companies more conscious of the life-cycle of a customer relationship management system. Companies now consider the possibility of brand loyalty and persistence of its users to purchase updates, upgrades and future editions of software. Additionally, CRM systems face the challenge of producing viable financial profits, with a 2002 study suggesting that less than half of CRM projects are expected to provide a significant return on investment. Poor usability and low usage rates lead many companies to indicate that it was difficult to justify investment in the software without the potential for more tangible gains.
Security concerns

A large challenge faced by developers and users is found in striking a balance between ease of use in the CRM interface and suitable and acceptable security measures and features. Corporations investing in CRM software do so expecting a relative ease of use while also requiring that customer and other sensitive data remain secure. This balance can be difficult, as many believe that improvements in security come at the expense of system usability. Research and study show the importance of designing and developing technology that balances a positive user interface with security features that meet industry and corporate standards. A 2002 study shows, however, that security and usability can coexist harmoniously. In many ways, a secure CRM system can become more usable. Researchers have argued that, in most cases, security breaches are the result of user-error (such as unintentionally downloading and executing a computer virus). In these events, the computer system acted as it should in identifying a file and then, following the users orders to execute the file, exposed the computer and network to a harmful virus. Researchers argue that a more usable system creates less confusion and lessens the amount of potentially harmful errors, in turn creating a more secure and stable CRM system. Technical writers can play a large role in developing customer relationship management systems that are secure and easy to use. A series of 2008 research shows that CRM systems, among others, need to be more open to flexibility of technical writers, allowing these professionals to become content builders. These professionals can then gather information and use it at their preference, developing a system that allows users to easily access desired information and is secure and trusted by its users.

Implementation
Implementation issues

Increases in revenue, higher rates of client satisfaction, and significant savings in operating costs are some of the benefits to an enterprise. Proponents emphasize that technology should be implemented only in the context of careful strategic and operational planning. Implementations almost invariably fall short when one or more facets of this prescription are ignored:
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Poor planning: Initiatives can easily fail when efforts are limited to choosing and deploying software, without an accompanying rationale, context, and support for the workforce. In other instances, enterprises simply automate flawed client-facing processes rather than redesign them according to best practices. Poor integration: For many companies, integrations are piecemeal initiatives that address a glaring need: improving a particular client-facing process or two or automating a favored sales or client support channel. Such point solutions offer little or no integration or alignment with a company s overall strategy. They offer a less than complete client view and often lead to unsatisfactory user experiences. Toward a solution: overcoming siloed thinking. Experts advise organizations to recognize the immense value of integrating their client-facing operations. In this view, internally-focused, department-centric views should be discarded in favor of reorienting processes toward information-sharing across marketing, sales, and service. For example, sales representatives need to know about current issues and relevant marketing promotions before attempting to cross-sell to a specific client. Marketing staff should be able to leverage client information from sales and service to better target campaigns and offers. And support agents require quick and complete access to a client s sales and service history.

Benefits of a CRM system

Let's take a look at the advantages that a CRM or Customer Relationship Management system can bring. 1. Shared or distributed data As companies realize that customer relationships are happening on many levels (not just through customer service or a web presence), they start to understand the need for sharing all available data throughout the organization. A CRM system is an enabler for making informed decisions and follow-up, on all the different levels. 2. Cost reduction A strong point in Customer Relationship Management is that it is making the customer a partner in your business, not just a subject. As customers are doing their own order entry, and are empowered to find the info they need to come to a buy decision, less order entry and customer support staff is needed.

3. Better Customer Service All data concerning interactions with customers is centralized. The customer service department can greatly benefit from this, because they have all the information they need at their fingertips. No need to guess, no need to ask the customer for the n-th time. And through the use of push-technology, customer service reps can lead the customer towards the information they need. And, most of the time, the customer can do this on their own, as the CRM system (remember, the 3 P's) is more and more able to anticipate the need of the customer. The customer experience is greatly enhanced. 4. Increased Customer Satisfaction The customer feels that he is more "part of the team" instead of just a subject for sales and marketing (the proverbial number), customer service is better, his needs are anticipated. There is no doubt that customer satisfaction will go up. If the products sold exceed the customers expectation, of course, no CRM system can help you with shoddy products. In my opinion, the term statisfaction is a contaminated. Many companies think that if customers are satisfied that this is a good predictor for repeat business. However, this is not the case. Only delighted customers have a great level of loyalty. 5. Better Customer Retention If a CRM system can help to enchant customers, this will increase customer loyalty, and they will keep coming back to buy again and again, hence customer retention. 6. More repeat business The repeat business is coming from the delighted customers, who are turned from doubting clients into loyal advocates. 7. More new business If you are delivering the ultimate customer experience, this will seed the word-of-mouth buzz, which will spawn more new business. 8. More Profit! More business at lower cost equals more profit.

Business benefits of CRM

Implementing a customer relationship management (CRM) solution might involve considerable time and expense. However, there are many potential benefits. A major benefit can be the development of better relations with your existing customers, which can lead to:
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increased sales through better timing by anticipating needs based on historic trends identifying needs more effectively by understanding specific customer requirements cross-selling of other products by highlighting and suggesting alternatives or enhancements identifying which of your customers are profitable and which are not

This can lead to better marketing of your products or services by focusing on:
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effective targeted marketing communications aimed specifically at customer needs a more personal approach and the development of new or improved products and services in order to win more business in the future

Ultimately this could lead to:

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enhanced customer satisfaction and retention, ensuring that your good reputation in the marketplace continues to grow increased value from your existing customers and reduced costs associated with supporting and servicing them, increasing your overall efficiency and reducing total cost of sales improved profitability by focusing on the most profitable customers and dealing with the unprofitable in more cost effective ways

Once your business starts to look after its existing customers effectively, efforts can be concentrated on finding new customers and expanding your market. The more you know about your customers, the easier it is to identify new prospects and increase your customer base. Even with years of accumulated knowledge, there's always room for improvement. Customer needs change over time, and technology can make it easier to find out more about customers and ensure that everyone in an organisation can exploit this information.

CRM: What are the benefits?

Excellent customer service is about being aware of customer needs and reacting to them effectively. CRM helps you to understand, anticipate and respond to your customers' needs in a consistent way, right across your organization. Practicing Customer Resource Management requires an efficient and integrated internal business system. Many businesses benefit from the organizational discipline CRM imposes, as well as from the technology itself. CRM will help your business if you view it as a set of tools that let you do more more for, and get more from, your customer. CRM can:
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Develop better communication channels Collect vital data, like customer details and order histories Create detailed profiles such as customer preferences Deliver instant, company-wide access to customer histories Identify new selling opportunities

How can you measure CRM benefits?

CRM benefits can be measured and quantified. Using CRM applications can lead to increases in revenue from:
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Reductions in operating costs - it cost around 25 to handle a customer call via a call centre but only 2 via a website A higher percentage of cross-selling due to offering a single point of contact with your company More success in attracting new customers and closing deals faster, through quicker and more efficient responses to customer leads and customer information Simplification of marketing and sales processes by understanding customer needs Better customer service - through improved responsiveness and understanding that builds customer loyalty and decreases customer "churn"

CRM benefits companies of varying sizes: enterprise through home-based businesses

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Large enterprise businesses -- These global companies require CRM systems that integrate customer service management, sales force management, and IT management into the CRM package. For instance, customer service CRM helps these large companies keep track of extensive customer databases so that customer service support personnel can easily locate accounts, track and analyze orders, as well as track helpdesk tickets so that the questions get answered. Examples of CRM vendors that serve enterprise companies include Oracle and Microsoft Dynamics CRM. Usually large companies purchase a license from these vendors so that they can customize their CRM solution into their IT systems. Many enterprises are realizing that CRM is an integral part of their business and that it is worth every investment penny, but executives must align their people and processes across their business to prevent CRM from becoming just a technology issue. Says Annie Bloin, VP of client service at RBC-Centura, "RBC recognized early on that the success of our CRM would mean the creation of new processes and the transformation of employee behavior. We've formed a cross-functional team to continually evaluate processes and make recommendations for improvements."

SBE (Small Business Enterprises) and SME (Small/Medium Enterprises) -- Since serving existing customers is always more profitable than spending resources for new ones, CRM helps small and medium sized businesses track and manage opportunities like sales leads, phone calls, and report generation. CRM allows smaller companies to keep abreast of customer needs and trends, while looking like a large business that operates 24/7. The right CRM package can provide a self-help, automated program that answers customer questions outside of normal business hours.

Historically, small and medium businesses do a better job at servicing their customers than enterprise firms, so an efficient and capable CRM solution should make sense for them. Examples of CRM solutions for SBEs/SMEs include Salesforce.com (starting at $65 a user per month) and Goldmine 6.5 by FrontRange Solutions ($ 179.95 for the package). Both of these solutions are scalable which allow companies to add in areas where their business needs the extra support.

SSB (Small Small Businesses) and SOHO (Small Office, Home Office) -- It used to be that the smallest businesses used Microsoft Outlook for basic customer contact information, and users shared a centralized contact list. Today, however, many SSBs are learning the value of affordable web-based CRM solutions like FreeCRM.com and SalesProCRM, which increase the productivity of a small company's sales team, so that more revenue can be earned with fewer salespeople. Because of their small staff sizes and service-based businesses, SSBs/SOHOs need to maximize their time with a CRM solution that target customers and prospects most likely to buy their products and services. CRM software assists growing businesses by organizing customer data by initial lead, to the sale, plus any ongoing follow up service or support. The software also accesses activity reports, generates labels for mailings, and allows the user to easily update customer information.

CRM is a worthwhile investment Using CRM is a smart solution for any sized business to stay competitive. Fortunately, there are as many CRM solutions as there are businesses that need them. Enterprises can more easily afford CRM than smaller businesses, which must resist the urge not to update their customer systems. For instance, many smaller business fight CRM because of lack of time, employees, lack of capital, and inadequate IT resources. However, if smaller businesses do their research, they will learn that a CRM software solution can give value back to their customers, can retain those customers, plus increase profits and customer satisfaction.