http://en.wikipedia.org/wiki/Customer_relationship_management
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Customer relationship management (CRM) consists of the processes a company uses to track and organize its contacts with its current and prospective customers. CRM software is used to support these processes; the software system can be accessed, and information about customers and customer interactions can be entered, stored and accessed by employees in different company departments. Typical CRM goals are to improve services provided to customers, and to use customer contact information for targeted marketing.
While the term CRM generally refers to a software-based approach to handling customer relationships, most CRM software vendors stress that a successful CRM effort requires a holistic approach.[1] CRM initiatives often fail because implementation was limited to software installation, without providing the context, support and understanding for employees to learn, and take full advantage of the information systems.[2]
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[edit]Overview
From the outside, customers interacting with a company perceive the business as a single entity, despite often interacting with a number of employees in different roles and departments. CRM is a combination of policies, processes, and strategies implemented by an organization to unify its customer interactions and provide a means to track customer information. It involves the use of technology to enable organizations to continue attracting new and profitable customers, while forming ever tighter bonds with existing ones.
CRM includes many aspects which relate directly to one another:
- Front office operations — Direct interaction with customers, e.g. face to face meetings, phone calls, e-mail, online services etc.
- Back office operations — Operations that ultimately affect the activities of the front office (e.g., billing, maintenance, planning, marketing,advertising, finance, manufacturing, etc.)
- Business relationships — Interaction with other companies and partners, such as suppliers/vendors and retail outlets/distributors, industry networks (lobbying groups, trade associations). This external network supports front and back office activities.
- Analysis — Key CRM data can be analyzed in order to plan target-marketing campaigns, conceive business strategies, and judge the success of CRM activities (e.g., market share, number and types of customers, revenue, profitability).
[edit]Types/Variations of CRM
There are several different approaches to CRM, with different software packages focusing on different aspects. In general, Customer Service,Campaign Management and Sales Force Automation form the core of the system (with SFA being the most popular[citation needed]).
[edit]Operational CRM
Operational CRM provides support to "front office" business processes, e.g. to sales, marketing and service staff. Interactions with customers are generally stored in customers' contact histories, and staff can retrieve customer information as necessary.
The contact history provides staff members with immediate access to important information on the customer (products owned, prior support calls etc.), eliminating the need to individually obtain this information directly from the customer.
Operational CRM processes customer data for a variety of purposes:
- 'Managing Campaigns'
- Enterprise Marketing Automation
- Sales Force Automation
- Sales Management System
[edit]Sales Force Automation (SFA)
Sales Force Automation automates sales force-related activities such as:
- Activity Management: Scheduling sales calls or mailings
- Tracking responses
- Generating reports
- Opportunity Management and Assessment
- Account Management and Target Account Selling
[edit]Analytical CRM
Analytical CRM analyzes customer data for a variety of purposes:
- Designing and executing targeted marketing campaigns
- Designing and executing campaigns, e.g. customer acquisition, cross-selling, up-selling
- Analysing customer behavior in order to make decisions relating to products and services (e.g. pricing, product development)
- Management information system (e.g. financial forecasting and customer profitability analysis)
Analytical CRM generally makes heavy use of data mining.
[edit]Sales Intelligence CRM
Sales Intelligence CRM is similar to Analytical CRM, but is intended as a more direct sales tool. Features include alerts sent to sales staff regarding:
- Cross-selling/Up-selling/Switch-selling opportunities
- Customer drift
- Sales performance
- Customer trends
- Customer margins
[edit]Campaign Management
Campaign management combines elements of Operational and Analytical CRM. Campaign management functions include:
- Target groups formed from the client base according to selected criteria
- Sending campaign-related material (e.g. on special offers) to selected recipients using various channels (e.g. e-mail, telephone,sms, post)
- Tracking, storing, and analyzing campaign statistics, including tracking responses and analyzing trends
[edit]Collaborative CRM
Collaborative CRM covers aspects of a company's dealings with customers that are handled by various departments within a company, such as sales, technical support and marketing. Staff members from different departments can share information collected when interacting with customers. For example, feedback received by customer support agents can provide other staff members with information on the services and features requested by customers. Collaborative CRM's ultimate goal is to use information collected by all departments to improve the quality of services provided by the company.[3]
[edit]Consumer Relationship CRM
Consumer Relationship System (CRS) covers aspects of a company's dealing with consumers and customers who are handled by the Consumer Affairs and Customer Relations contact centers within a company.[1] Trained contact center representatives handle in-bound contacts from anonymous consumers and customers, replying to inquiries and fulfilling responses. Representatives capture consumer contact information, issues, and verbatim feedback which is stored in the CRM and made available to company stakeholders such as marketing, product management and development, legal, public relations, etc., for input to product and service improvements. The CRS workflow processing and reporting enable issuing of early warning alerts to product problems in the marketplace (e.g., item recalls) and capture of current consumer sentiment ('voice of the customer').[2]
[edit]Geographic CRM
Geographic CRM (GCRM) combines geographic information system and traditional CRM. Geographic data can be analyzed to provide a snapshot of potential customers in a region or to plan routes for customer visits.
[edit]Strategy
Several CRM software packages are available, and they vary in their approach to CRM. However, as mentioned above, CRM is not just a technology but rather a comprehensive, customer-centric approach to an organization's philosophy of dealing with its customers. This includes policies and processes, front-of-house customer service, employee training, marketing, systems and information management. Hence, it is important that any CRM implementation considerations stretch beyond technology toward the broader organizational requirements.
The objectives of a CRM strategy must consider a company’s specific situation and its customers' needs and expectations. Information gained through CRM initiatives can support the development of marketing strategy by developing the organization's knowledge in areas such as identifying customer segments, improving customer retention, improving product offerings (by better understanding customer needs), and by identifying the organization's most profitable customers.[4]
CRM strategies can vary in size, complexity, and scope. Some companies consider a CRM strategy only to focus on the management of a team of salespeople. However, other CRM strategies can cover customer interaction across the entire organization. Many commercial CRM software packages provide features that serve the sales, marketing, event management, project management, and finance industries.
[edit]Implementation Issues
Many CRM project "failures" are also related to data quality and availability. Data cleaning is a major issue. If a company's CRM strategy is to track life-cycle revenues, costs, margins, and interactions between individual customers, this must be reflected in all business processes. Data must be extracted from multiple sources (e.g., departmental/divisional databases such as sales, manufacturing, supply chain, logistics, finance, service etc.), which requires an integrated, comprehensive system in place with well-defined structures and high data quality. Data from other systems can be transferred to CRM systems using appropriate interfaces.
Because of the company-wide size and scope of many CRM implementations, significant pre-planning is essential for smooth roll-out. This pre-planning involves a technical evaluation of the data available and the technology employed in existing systems. This evaluation is critical to determine the level of effort needed to integrate this data.
Equally critical is the human aspect of the implementation. A successful implementation requires an understanding of the expectations and needs of the stakeholders involved. An executive sponsor should also be obtained to provide high-level management representation of the CRM project.
An effective tool for identifying technical and human factors before beginning a CRM project is a pre-implementation checklist.[5] A checklist can help ensure any potential problems are identified early in the process.
[edit]Privacy and data security
One of the primary functions of CRM software is to collect information about customers. When gathering data as part of a CRM solution, a company must consider the desire for customer privacy and data security, as well as the legislative and cultural norms. Some customers prefer assurances that their data will not be shared with third parties without their prior consent and that safeguards are in place to prevent illegal access by third parties.
[edit]Market structure
The following table lists the top CRM software vendors in 2006-2007 (figures in millions of US dollars) published in a Gartner study.[6]
| Vendor | 2007 Revenue | 2007 Share (%) | 2006 Revenue | 2006 Share (%) | '06-'07 Growth (%) |
|---|---|---|---|---|---|
| SAP | 2,050.8 | 25.3 | 1,681.7 | 26.6 | 22.0 |
| Oracle | 1,319.8 | 15.3 | 1,016.8 | 15.5 | 29.8 |
| Salesforce.com | 676.5 | 8.3 | 451.7 | 6.9 | 49.8 |
| Amdocs | 421.0 | 5.2 | 365.9 | 5.6 | 15.1 |
| Microsoft | 332.1 | 4.1 | 176.1 | 2.7 | 88.6 |
| Others | 3,289.1 | 40.6 | 2,881.6 | 43.7 | 14.1 |
| Total | 8,089.3 | 100 | 6,573.8 | 100 | 23.1 |
The following table lists the top software vendors for CRM projects completed in 2006 using external consultants and system integrators, according to a 2007 Gartner study.[7]
| Vendor | Percentage of implementations |
|---|---|
| Siebel (Oracle) | 41% |
| SAP | 8% |
| Epiphany (Infor) | 3% |
| Oracle | 3% |
| PeopleSoft (Oracle) | 2% |
| salesforce.com | 2% |
| Amdocs | 1% |
| Chordiant | 1% |
| Microsoft | 1% |
| SAS | 1% |
| Others | 15% |
| None | 22% |
A 2007 Datamonitor report [8] lists Oracle (including Siebel) and SAP as the top CRM vendors, with Chordiant, Infor, and SalesForce.com as significant, smaller vendors.
[edit]Free and Open Source CRM Software
As the enterprise CRM market grows, many companies and small groups of developers focus on creating CRM software that are distributed freely on the Internet or offered at a fraction of the price of classic enterprise CRM software. Many of these packages focus on providing the software for free, but offer the customer an option of paid-for support plans. Free CRM software typically offers similar features as the popular enterprise software packages. The following lists some of the more popular Free and Open Source CRM software available.
[edit]See also
- Sales intelligence
- Business intelligence
- Consumer Relationship System
- Customer Experience
- Customers
- Customer Intelligence
- Customer service
- Data mining
- Database marketing
- Enterprise Feedback Management (EFM)
- Enterprise relationship management (ERM)
- Mystery shopping
- Predictive analytics
- Sales force management system
- Web management system
- SAP CRM 2009 — Educational & networking conference
- CDC Connect 2009 — Educational & networking conference
[edit]References
- ^ Malthouse, Edward C; Bobby J Calder (2005). "Relationship Branding and CRM". in Alice Tybout and Tim Calkins. Kellogg on Branding. Wiley. pp. 150-168.
- ^ Rigby, Darrell K.; Frederick F. Reichheld, Phil Schefter (2002). "Avoid the four perils of CRM". Harvard Business Review 80 (2): 101–109. doi:.
- ^ Edwards, John (2007-11-29). "Get It Together with Collaborative CRM". insideCRM. Tippit. Retrieved on 2008-02-01.
- ^ Bligh, Philip; Douglas Turk (2004). CRM unplugged – releasing CRM's strategic value. Hoboken: John Wiley & Sons. ISBN 0-471-48304-4.
- ^ Dyche, 2002, Managing Your CRM Project
- ^ Gartner, Inc (2008-09-12). Gartner Says Worldwide Customer Relationship Management Market Grew 23 Percent in 2007. Press release. Retrieved on 2008-08-15.
- ^ Gartner, Inc. (22 June 2007) Commonly Deployed CRM Application Vendors in 2006
- ^ Datamonitor (22 August 2007). Datamonitor suggests Oracle, SAP likely to remain atop CRM market
