Customer relationship management is the strategies, processes, people and technologies that are used by companies in order to successfully attract and retain customers. If this is achieved then a company can enjoy maximum corporate growth and great success. Obviously this is what any business wants which is why it is an important aspect of day - to - day business operations.
The different types of this management can range from simple off the shelf contact management products to high - end interactive systems that combine sales, marketing and executive information systems. The type of management that a company uses is most likely to depend on the size and type of business. For example, a small business with only a few customers will only need a simple system as it's easier to monitor customers.
However, a large company with thousands and thousands of customers is going to find it near impossible to know every single one of their customers. For this reason a more complex system will be required in order to help them achieve a satisfactory level of customer relationship management.
Customer relationship management is important because it is vital that all businesses know everything they need to know about their customers. This can range from their spending habits, the budget they have, areas of interest and what they want in the future.
The reason why this information can be so beneficial to a company is because if you know how your customers are thinking then you know how to target your products at them, for example, if 90 percent of your customers watch television between 8pm and 10pm every night then you know this is a good time to advertise you product. If you don't know this information you could be advertising at 6pm when none of your customers will see your advertisement.
Customer relationship management also allows a company to monitor whether they are losing or gaining customers. If they are losing customers they can find out why and try to come up with ideas of getting them back and keeping their current customers loyal to them.
There are so many advantages of maintaining customer relationship management that every company should do it. It is by far the best means of ensuring that you have a happy and loyal clientele.
What Is Customer Relationship Management
It's hard to find a definitive definition of what CRM means. So I'll outline the broad meaning and then give some examples.
You may have heard of the terms CRM and Customer Relationship Management in regards to software. Well CRM is not just a piece of software. It's more than that.
The CRM Customer Relationship Management software is a vital component, yet the whole business needs to understand CRM Customer Relationship Management in all departments and functions of the business and behave appropriately to make CRM Customer Relationship Management work.
An effective CRM Customer Relationship Management will include methodologies, strategies, software, and web-based capabilities that help an enterprise organize and manage customer relationships.
Why use CRM Customer Relationship Management?
CRM Customer Relationship Management is used to help businesses (a.) understand their customer, and (b.) understand their customers' wants and needs and (c.) help the business serve them more efficiently and effectively
In turn this will help the business to improve customer satisfaction, increase staff productivity, slash operational costs and maximize the effectiveness of each customer interaction.
Let's talk about these three different areas.
CRM Customer Relationship Management to Understand The Customer
In a CRM Customer Relationship Management application and approach a user will collect as much information about a customer that they can. They'll collect names, addresses, contact numbers, age, sex, number of children etc. A CRM Customer Relationship Management process does this to, amongst other things; help ‘classify' their customers.
A benefit of a CRM Customer Relationship Management system is that a user can help analyse which types of customers are best for their business.
Then once they know what customer ‘types' are best they can then market to them in a ‘personal' way – using the information gained about them.
CRM Customer Relationship Management to Understand The Customers Wants and Needs
As information is collected about the customers' personal life, information is also collected about their buying habits and stored in CRM Customer Relationship Management software.
Humans are creatures of habit. By analysing the information collected about the customer and their buying habits the CRM Customer Relationship Management can be used to help the business identify what the customers would most likely want or need to buy.
For example, if your CRM Customer Relationship Management information lets you know that your best customers typically like buying ‘red apples' in November for an average sale price of $15. You can prepare a marketing approach that is sent out to them prior to November that will steer them towards buying $30 worth of apples.
The customer sees it as useful because it's something they like to do at that time of year, and you're offering them a reminder and perhaps an incentive to buy more. The business benefits by structuring the offer to increase the sales value and therefore increasing the profit return.
CRM Customer Relationship Management is Useful to Also Target New Customers
Information gathered in the CRM Customer Relationship Management will help the business to target more of the preferred customers. An analysis using CRM Customer Relationship Management software could tell the business, for example, that single males between 30 to 35 years of age that earn between $50,000 and $60,000 are the best type of customer for the business.
Knowing that information from the CRM Customer Relationship Management, the business can then hire a list from a direct mail list broker of all the single men that fit the description and target their marketing towards them.
The CRM Customer Relationship Management activity of improving the relationship with the customer is to help keep the customer more loyal to the company and thus improve the profitability of the business.
CRM Customer Relationship Management to Help Efficiency and Effectiveness of Business
A good CRM Customer Relationship Management application will help the business to become more efficient and effective.
The business can become more efficient because if a customer contacts the business, within seconds the customer service representative can produce the customers file. This will tell the employee all about the customer and their interaction with the business.
So a CRM Customer Relationship Management saves time for the business and is able to help the employees deliver high levels of personalised service.
A CRM Customer Relationship Management software program and approach can help the business become more effective. An example would be marketing.
Knowing all the information about the customers, the marketing strategies can be targeted towards the customers in a personal way. Thus marketing to a defined target market with a past history the potential of improved results is far greater than marketing to a ‘cold' list.
This article should only be viewed a very broad overview of what CRM Customer Relationship Management is.
On this website you'll find more detail and resources to help you understand and use CRM Customer Relationship Management for your business.
Both Derek Both & Casey Gollan are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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