A simple search on Google for define CRM will display its main definition as
customer relationship management. While it sounds interesting, what does it
really mean? Well, the expanded definition gives some hints - CRM could be
interpreted as a way to manage the relationship you have with your customers
(business relationship). While this is a shallow definition of CRM, it
points however in the right direction, it's all about the way you do your
business so that you gain, keep and maintain a good relation with existing
and future customers.
But in the process of getting new customers and maintaining an excellent
relationship with the existing ones there are other factors involved. For
instance, let's assume you produce airplanes (not in your backyard though),
and let's see which factors involve the relationship with your customer:
Sales and Marketing. To be able to have a relationship with your customer
you need first to have a customer. Now that's a pickle. You have to have
well trained salesmen and marketing strategies to touch the right niche and
grab your customers.
Suppliers. You got a customer, now you need to start working on his product.
To create an airplane you need good materials from your suppliers and
delivered in time (if you don't have the materials when you need them, the
customer doesn't get the plane in time so the relation is damaged).
Customer preferences. Now since an airplane involves high costs, you might
through in some special customization for your customer. But for that you
need to know what the customer preferences are (wouldn't be a good
relationship if you would deliver a pink airplane when he wanted a white
one).
Internal processes. You have the parts, you know what the customer wants.
Now it's time to produce it using your knowledge, services and people.
Customer communications. It doesn't take a couple of hours to create the
plane, so while the plane is being created you want to be sure that the
customer receives the proper information about how the production goes. So
you need to communicate with him for a better relationship.
Delivery. How shiny it looks, now that is ready. However, it's not something
you can send via Fedex, so you need to be sure that it's delivered to your
customer without any scratches or pee smell on its tires.
Training. Well it's no use if you give him the plane without an instruction
manual. While a manual might work for how to use the radio, to use the plane
your customer would need serious training.
Customer support. Not everything is perfect, and even if it is then your
customer still needs some support because he doesn't know why the tiny red
button now looks brighter. You want to offer support when he needs it and
right to the point.
Customer followup. Now it's been about 4 months since your customer is been
playing around with his new toy. Wouldn't be excellent if you would call or
meet him in person to ask if he needs new tires or a new surround system for
the passengers?
Performance management. You're happy and your customer is happy. That's a
good relationship. But could you have done something better that would have
resulted in a better product or a better service (or even driving costs down
a little bit)? It's time for an analysis, so you process all the information
gathered and you draw the conclusions. And since this is a process that will
be repeating with each new customer, anything you do now to improve it will
just improve the relationship with your future customers. But don't forget
your people. They did a good job too and they need to be compensated so that
they'll do the same good job in the future too.
The above list could go on. As you can see customer relationship management
involves a lot of functions and is influenced by a lot of factors. Maybe now
we're able to give a better definition for CRM: A business process that has
as its main goal your customer satisfaction. Because if your customers are
happy, then they'll purchase from you in the future too and also recommend
you to others, so your revenue will increase from a healthy customer
relationship. Supporting this CRM business strategy is not done with a pen
and paper (at least not only with). There are lots of CRM solutions from big
names like Oracle, SAP, Salesforce and many others, that include the usage
of CRM software. However, to be successful with your CRM strategy, you must
align the usage of CRM software with the type of your customers and the
particularities of your product.
A little bit more about CRM software and how it helps in the relationship
with your customer. A typical CRM program allows you to gather, store and
analyze not only the information about your customer, but also the
information about the other factors that influence the CRM, such as your
partners (suppliers, vendors) and your own people (internal processes).
Beside this function, a CRM program also allows you to: plan and execute
your sales and marketing strategies, offer customer support and training,
manage the performance of your your own processes. Also, there are 2 major
types of CRM software: On-demand and On-premise. In a few words, CRM On
Demand is the type of CRM program that is accessed as a web service (either
provided by a third party for a recurring fee, or installed as a centralized
solution in your company), while CRM On Premise is the type of CRM program
that is actually installed on your computer and you don't access it as a web
service (though communication and data sharing are key elements too and are
available in CRM On-Premise too).
So now can you define CRM? Defining CRM is not as easy as saying “customer
relationship management.” It's much more than that, because of everything
else that influences the business process.
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