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Customer relationship management (CRM) covers methods and technologies used by companies to manage their relationships with clients. Information stored on existing customers (and potential customers) is analyzed and used to this end. Automated CRM processes are often used to generate automatic personalized marketing based on the customer information stored in the system. Implementing CRM Customer relationship management is a corporate level strategy, focusing on creating and maintaining relationships with customers. Several commercial CRM software packages are available which vary in their approach to CRM. However, CRM is not a technology itself, but rather a holistic approach to an organisation's philosophy, placing the emphasis firmly on the customer. CRM governs an organization's philosophy at all levels, including policies and processes, front of house customer service, employee training, marketing, systems and information management. CRM systems are integrated end-to-end across marketing, sales, and customer service. A CRM system should: CRM Architecture There are three fundamental components in CRM: Operational CRM Operational CRM provides automated support to "front office" business processes (sales, marketing and service). Each interaction with a customer is generally added to a customer's history, and staff can retrieve information on customers from the database as necessary. According to Gartner Group, operational CRM typically involves three general areas: Sales force automation (SFA)SFA automates some of a company's critical sales and sales force management tasks, such as forecasting, sales administration, tracking customer preferences and demographics, performance management, lead management, account management, contact management and quote management. Customer service and support (CSS)CSS automates certain service requests, complaints, product returns and enquiries. Enterprise marketing automation (EMA)EMA provides information about the business environment, including information on competitors, industry trends, and macroenvironmental variables. EMA applications are used to improve marketing efficiency. Integrated CRM software is often known as a "front office solution", as it deals directly with customers. Many call centers use CRM software to store customer information. When a call is received, the system displays the associated customer information (determined from the number of the caller). During and following the call, the call center agent dealing with the customer can add further information. Some customer services can be fully automated, such as allowing customers to access their bank account details online or via a WAP phone. Analytical CRM Analytical CRM analyses data (gathered as part of operational CRM, or from other sources) in an attempt to identify means to enhance a company's relationship with its clients. The results of an analysis can be used to design targeted marketing campaigns, for example: Other examples of the applications of analyses include: Data collection and analysis is viewed as a continuing and iterative process. Ideally, business decisions are refined over time, based on feedback from earlier analyses and decisions. Most analytical CRM projects use a data warehouse to manage data. Collaborative CRM Collaborative CRM focuses on the interaction with customers (personal interaction, letter, fax, phone, Internet, e-mail etc.) Collaborative CRM includes: Driven by authors from the Harvard Business School (Kracklauer/Mills/Seifert), Collaborative CRM also seems to be the new paradigma to succeed the leading Efficient Consumer Response and Category Management concept in the industry/trade relationship. Uses of CRM In its broadest sense, CRM covers all interaction and business with customers. A good CRM program allows a business to acquire customers, provide customer services and retain valued customers. Customer services can be improved by: Technical Considerations The following factors need to be considered: Improving Customer Relationships CRM applications often track customer interests and requirements, as well as their buying habits. This information can be used to target customers selectively. Furthermore, the products a customer have purchased can be tracked throughout the product's life cycle, allowing customers to receive information concerning a product or to target customers with information on alternative products once a product begins to be phased out. Repeat purchases rely on customer satisfaction, which in turn comes from a deeper understanding of each customer and their individual needs. CRM is an alternative to the "one size fits all" approach. In industrial markets, the technology can be used to coordinate the conflicting and changing purchase criteria of the sector. Privacy and Ethical Concerns The data gathered as part of CRM raises concerns over customer privacy and enables coercive sales techniques (see persuasion technology). However, CRM does not necessarily involve gathering new data, but also includes making better use of customer information gathered as a result of routine customer interaction. The privacy debate generally focuses on the customer information stored in the centralised database itself, and fears over a company's handling of this information, especially regarding third parties. Hosted vs On-Premise CRM Hosted software has been around since the 1990s, hundreds of ASPs sprang up to offer customers enterprise software hosted over the Internet. But when the Internet bubble burst, many ASPs went down, leaving customers in the dark. But Salesforce.com focused on the need for sales-force automation, refined its technology and began racking up sales among small and mid-size businesses that needed the functionality they could offer but couldn't afford the multimillion-dollar price that accompanied full-fledged CRM implementations. As the number of expensive failures in the traditional on-premise CRM space grew, so did interest in expanding the hosted model beyond simple sales-force automation to a full-fledged system that could give enterprises a idealistic view of their customers and allow them to better target their marketing, sales and customer-service efforts. In the last few years, the market for on-demand CRM has been driven up by small and mid-sized businesses (especially those who don’t already have a well-established CRM process) because of fears about the cost and complexity of large-scale on-premise CRM implementations. Of course, on-demand CRM is often a good choice for companies that wants to implement standard CRM processes, are able to use out-of-the-box data structures, with little or no internal IT support, and don’t require complex or real-time integration with back office systems. However, on-demand CRM software is not always as simple as the vendors would have you believe. For example, customization can be problematic and hosted CRM vendors’ API tools cannot provide the amount of integration that is possible with on-site applications. Getting a hosted CRM system working shouldn’t take as long as a traditional software package, but larger and more complex operations can still take a year or more. And while the hosted option reduces the need for in-house technical support, upgrades can still sometimes be technically tricky. In addition, some companies with particularly sensitive customer data, such as those in financial services and health care, may not want to relinquish control of their data to a hosted third party for security reasons. There are a couple of things that is to be considering when figuring out between hosted or on-demand versus on-premise CRM. One of the biggest mistakes is deciding on pricing first. You have to have a strategic plan for what you want from your CRM initiatively. Also you might want to see if your company is stable, with little growth or change, then a hosted CRM solution may be a better choice compare to where as your company is changing rapidly with high growth, then on-premise might be a better solution. There are a lot of details that you would want to go over such as define your processes, figure out what your requirements are, decide who will execute on it, and then you can go through the costs of each model that actually meets your requirements and make a decision. Companies seeking to adopt established, standard practices on a particular function like sales-force automation are more likely to benefit from a hosted solution, while those seeking to implement highly customized customer-management processes would more likely value a flexible onsite option. CRM for Nonprofit Organizations CRM is also important to non-profit organizations, which sometimes use the terms "constituent relationship management," "contact relationship management" or "community relationship management" to describe their information systems for managing donors, volunteers and other supporters. See also | |||||||
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