What is Customer relationship management – Basic Of CRM
Customer Relationship Management (CRM) is a management approach that seeks to create, develop and enhance relationships with carefully targeted customers in order to maximize customer value, corporate profitability and thus shareholders’ value. Managing relationship with the customers has been of importance since last many centuries, but with invent of information technology a new discipline in name of CRM has emerged. The CRM is primarily concerned with utilizing information technology to implement relationship marketing strategies. The emergence of CRM is a consequence of a number of trends like shift in business focus from transactional to relationship marketing, transition in structuring organizations on a strategic basis from functions to processes, and acceptance of the need for trade-off between delivering and extracting customer value. The greater utilization of technology in managing and maximizing value of information has also led to modern shape of CRM.
Definitions of CRM
• CRM is an information industry term for methodologies, software and usually Internet capabilities that help an enterprise manage customer relationships in an organized way.
• CRM is the process of managing all aspects of interaction a company has with its customers, including prospecting, sales and service. CRM applications attempt to provide insight into and improve the company/customer relationship by combining all these views of customer interaction into one picture.
• CRM is an integrated approach to identifying, acquiring and retaining customers. By enabling organizations to manage and coordinate customer interactions across multiple channels, departments, lines of business and geographies, CRM helps organizations maximize the value of every customer interaction and drive superior corporate performance.
• CRM is an integrated information system that is used to plan, schedule and control the pre-sales and post-sales activities in an organization. CRM embraces all aspects of dealing with prospects and customers, including the call centre, sales force, marketing, technical support and field service. The primary goal of CRM is to improve long-term growth and profitability through a better understanding of customer behaviour. CRM aims to provide more effective feedback and improved integration to better gauge the return on investment (ROI) in these areas.
• CRM is a business strategy that maximizes profitability, revenue and customer satisfaction by organizing around customer segments, fostering behaviour that satisfies customers, and implementing customer-centric processes.
The aim of CRM is to acquire and retain customers by providing them with optimal value in whatever way they deem important. This includes the way businesses communicate with them, how they buy, and the service they receive – in addition, of course, getting the best through the more traditional channels of product, price, promotion and place of distribution. Essentially, CRM is a customer focused business strategy which brings together customer lifecycle management, business process and technology. The trend for companies to shift from a product focused view of the world to a customer focused one is the modern strategy of the business, as products become increasingly hard to differentiate in fiercely competitive markets. It stands to reason that the better one understands customers, the more successful the company will be in meeting their needs. But adopting a truly customer focused approach can be a resource intensive business. Many managers have questioned how far the investment is worth it. The answer to such questions lies in CRM which uses new technologies that can transform the technique of cultivating a loyal customer base.
Types of CRM technology
The four main vendors of CRM systems are Salesforce, Microsoft, SAP and Oracle. Other providers are popular among small to midmarket businesses, but these four tend to be the choice for large corporations. The types of CRM technology offered are as follows:
- On-premises CRM: This system puts the onus of administration, control, security and maintenance of the database and information on the company using the CRM software. With this approach, the company purchases licenses upfront instead of buying yearly subscriptions from a cloud CRM provider. The software resides on the company’s own servers and the user assumes the cost of any upgrades. It also usually requires a prolonged installation process to fully integrate a company’s data. Companies with complex CRM needs might benefit from an on-premises deployment.
- Cloud-based CRM: With cloud-based CRM, also known as SaaS (software as a service) or on-demand CRM, data is stored on an external, remote network that employees can access anytime, anywhere there is an internet connection, sometimes with a third-party service provider overseeing installation and maintenance. The cloud’s quick, relatively easy deployment capabilities appeal to companies with limited technological expertise or resources.Companies might consider cloud CRM as a more cost-effective option. Vendors such as Salesforce charge by the user on a subscription basis and offer the option of monthly or yearly payments.
Data security is a primary concern for companies using cloud-based systems, as the company doesn’t physically control the storage and maintenance of its data. If the cloud provider goes out of business or is acquired by another company, an enterprise’s data can be compromised or lost. Compatibility issues can also arise when data is initially migrated from a company’s internal system to the cloud.
Finally, cost may be a concern, since paying subscription fees for software can be more costly over time than on-premises models.
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