Customer relationship management

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Customer relationship management (CRM) is a widely-implemented strategy for

managing a company’s interactions with customers, clients and sales prospects. It
involves using technology to organize, automate, and synchronize business processes
—principally sales activities, but also those for marketing, customer service,
and technical support. The overall goals are to find, attract, and win new clients,
nurture and retain those the company already has, entice former clients back into the
fold, and reduce the costs of marketing and client service. [1] Customer relationship
management describes a company-wide business strategy including customer-
interface departments as well as other departments. [2]

Contents
[hide]

 1 Benefits of CRM
 2 Challenges
 3 Types/variations
o 3.1 Sales force automation
o 3.2 Marketing
o 3.3 Customer service and support
o 3.4 Appointment
o 3.5 Analytics
o 3.6 Integrated/Collaborative
o 3.7 Small business
o 3.8 Social media
o 3.9 Non-profit and membership-based
 4 Strategy
 5 Implementation
o 5.1 Implementation issues
o 5.2 Adoption issues
 6 Privacy and data security system
  7 Market structures
 8 Related trends
 9 See also
 10 Notes and references

[edit] Benefits of CRM
The use of a CRM system will confer several advantages to a company: [citation needed]

 Quality and efficiency

 Decrease in overall costs
 Decision support
 Enterprise agility
 Customer Attention

[edit] Challenges
Tools and workflows can be complex, especially for large businesses. Previously
these tools were generally limited to  contact management: monitoring and recording
interactions and communications. Software solutions then expanded to embrace deal
tracking, territories, opportunities, and at the sales pipeline itself. Next came the
advent of tools for other client-interface business functions, as described below. These
tools have been, and still are, offered as on-premises software that companies
purchase and run on their own IT infrastructure.

Often, implementations are fragmented—isolated initiatives by individual

departments to address their own needs. Systems that start disunited usually stay that
way: siloed thinking and decision processes frequently lead to separate and
incompatible systems, and dysfunctional processes.

Business reputation has become a growing challenge. The outcome of internal

fragmentation that is observed and commented upon by customers is now visible to
the rest of the world in the era of the social customer, where in the past, only
employees or partners were aware of it. Addressing the fragmentation requires a shift
in philosophy and mindset within an organization so that everyone considers the
impact to the customer of policy, decisions and actions. Human response at all levels
of the organization can affect the customer experience for good or ill. Even one
unhappy customer can deliver a body blow to a business. [3]

[edit] Types/variations
[edit] Sales force automation

Sales force automation (SFA) involves using software to streamline all phases of the
sales process, minimizing the time that sales representatives need to spend on each
phase. This allows sales representatives to pursue more clients in a shorter amount of
time than would otherwise be possible. At the heart of SFA is a  contact management
system for tracking and recording every stage in the sales process for each prospective
client, from initial contact to final disposition. Many SFA applications also include
insights into opportunities, territories, sales forecasts and workflow automation, quote
generation, and product knowledge. Modules for Web 2.0 e-commerce and pricing are
new, emerging interests in SFA.[1]

[edit] Marketing

CRM systems for marketing help the enterprise identify and target potential clients
and generate leads for the sales team. A key marketing capability is tracking and
measuring multichannel campaigns, including email, search, social media, telephone
and direct mail. Metrics monitored include clicks, responses, leads, deals, and
revenue. Alternatively, Prospect Relationship Management (PRM) solutions offer to
track customer behaviour and nurture them from first contact to sale, often cutting out
the active sales process altogether.

In a web-focused marketing CRM solution, organizations create and track specific

web activities that help develop the client relationship. These activities may include
such activities as free downloads, online video content, and online web presentations.
[citation needed]

[edit] Customer service and support

Recognizing that service is an important factor in attracting and retaining customers,

organizations are increasingly turning to technology to help them improve their
clients’ experience while aiming to increase efficiency and minimize costs. [4] Even so,
a 2009 study revealed that only 39% of corporate executives believe their employees
have the right tools and authority to solve client problems. [5]

[edit] Appointment

Creating and scheduling appointments with customers is a central activity of most

customer oriented businesses. Sales, customer support, and service personnel
regularly spend a portion of their time getting in touch with customers and prospects
through a variety of means to agree on a time and place for meeting for a sales
conversation or to deliver customer service. Appointment CRM is a relatively new
CRM platform category in which an automated system is used to offer a suite of
suitable appointment times to a customer via e-mail or through a web site. An
automated process is used to schedule and confirm the appointment, and place it on
the appropriate person's calendar. Appointment CRM systems can be an origination
point for a sales lead and are generally integrated with sales and marketing CRM
systems to capture and store the interaction.

[edit] Analytics

Relevant analytics capabilities are often interwoven into applications for sales,
marketing, and service. These features can be complemented and augmented with
links to separate, purpose-built applications for analytics and business intelligence.
Sales analytics let companies monitor and understand client actions and preferences,
through sales forecasting and data quality.

Marketing applications generally come with  predictive analytics to improve

segmentation and targeting, and features for measuring the effectiveness of online,
offline, and search marketing campaigns. Web analytics have evolved significantly
from their starting point of merely tracking mouse clicks on Web sites. By evaluating
“buy signals,” marketers can see which prospects are most likely to transact and also
identify those who are bogged down in a sales process and need assistance. Marketing
and finance personnel also use analytics to assess the value of multi-faceted programs
as a whole.

These types of analytics are increasing in popularity as companies demand greater

visibility into the performance of call centers and other service and support channels,
[4]
 in order to correct problems before they affect satisfaction levels. Support-focused
applications typically include dashboards similar to those for sales, plus capabilities to
measure and analyze response times, service quality, agent performance, and the
frequency of various issues.

[edit] Integrated/Collaborative

Departments within enterprises — especially large enterprises — tend to function

with little collaboration.[6] More recently, the development and adoption of these tools
and services have fostered greater fluidity and cooperation among sales, service, and
marketing. This finds expression in the concept of collaborative systems that use
technology to build bridges between departments. For example, feedback from
a technical supportcenter can enlighten marketers about specific services and product
features clients are asking for. Reps, in their turn, want to be able to pursue these
opportunities without the burden of re-entering records and contact data into a
separate SFA system.
[edit] Small business

For small business, basic client service can be accomplished by a contact manager

system: an integrated solution that lets organizations and individuals efficiently track
and record interactions, including emails, documents, jobs, faxes, scheduling, and
more. These tools usually focus on accounts rather than on individual contacts. They
also generally include opportunity insight for tracking sales pipelines plus added
functionality for marketing and service. As with larger enterprises, small businesses
are finding value in online solutions, especially for mobile
and telecommuting workers,

[edit] Social media

Social media sites like Twitter, LinkedIn and Facebook are amplifying the voice of

people in the marketplace and are having profound and far-reaching effects on the
ways in which people buy. Customers can now research companies online and then
ask for recommendations through social media channels, making their buying
decision without contacting the company.

People also use social media to share opinions and experiences on companies,
products and services. As social media is not as widely moderated or censored as
mainstream media, individuals can say anything they want about a company or brand,
positive or negative.

Increasingly, companies are looking to gain access to these conversations and take
part in the dialogue. More than a few systems are now integrating to social
networking sites. Social media promoters cite a number of business advantages, such
as using online communities as a source of high-quality leads and a vehicle for  crowd
sourcing solutions to client-support problems. Companies can also leverage client
stated habits and preferences to "hyper-target" their sales and marketing
communications.[7]

Some analysts take the view that business-to-business marketers should proceed
cautiously when weaving social media into their business processes. These observers
recommend careful market research to determine if and where the phenomenon can
provide measurable benefits for client interactions, sales and support. [8] It is stated[by
whom?]
 that people feel their interactions are peer-to-peer between them and their
contacts, and resent company involvement, sometimes responding with negatives
about that company.

[edit] Non-profit and membership-based

Systems for non-profit and membership-based organizations help track constituents
and their involvement in the organization. Capabilities typically include tracking the
following: fund-raising, demographics, membership levels, membership directories,
volunteering and communications with individuals.

Many include tools for identifying potential donors based on previous donations and
participation. In light of the growth of social networking tools, there may be some
overlap between social/community driven tools and non-profit/membership tools.

[edit] Strategy
For larger-scale enterprises, a complete and detailed plan is required to obtain the
funding, resources, and company-wide support that can make the initiative of
choosing and implementing a system successfully. Benefits must be defined, risks
assessed, and cost quantified in three general areas:

 Processes: Though these systems have many technological components,

business processes lie at its core. It can be seen as a more client-centric way of
doing business, enabled by technology that consolidates and intelligently
distributes pertinent information about clients, sales, marketing effectiveness,
responsiveness, and market trends. Therefore, a company must analyze its
business workflows and processes before choosing a technology platform;
some will likely need re-engineering to better serve the overall goal of winning
and satisfying clients. Moreover, planners need to determine the types of client
information that are most relevant, and how best to employ them. [2]

 People: For an initiative to be effective, an organization must convince its staff

that the new technology and workflows will benefit employees as well as
clients. Senior executives need to be strong and visible advocates who can
clearly state and support the case for change. Collaboration, teamwork, and
two-way communication should be encouraged across hierarchical boundaries,
especially with respect to process improvement. [9]

 Technology: In evaluating technology, key factors include alignment with the

company’s business process strategy and goals, including the ability to deliver
the right data to the right employees and sufficient ease of adoption and use.
Platform selection is best undertaken by a carefully chosen group of executives
who understand the business processes to be automated as well as the software
issues. Depending upon the size of the company and the breadth of data,
choosing an application can take anywhere from a few weeks to a year or more.
[2]
[edit] Implementation
[edit] Implementation issues

Increases in revenue, higher rates of client satisfaction, and significant savings in

operating costs are some of the benefits to an enterprise. Proponents emphasize that
technology should be implemented only in the context of careful strategic and
operational planning.[10] Implementations almost invariably fall short when one or
more facets of this prescription are ignored:

 Poor planning: Initiatives can easily fail when efforts are limited to choosing
and deploying software, without an accompanying rationale, context, and
support for the workforce.[11] In other instances, enterprises simply automate
flawed client-facing processes rather than redesign them according to best
practices.

 Poor integration: For many companies, integrations are piecemeal initiatives

that address a glaring need: improving a particular client-facing process or two
or automating a favored sales or client support channel. [12]Such “point
solutions” offer little or no integration or alignment with a company’s overall
strategy. They offer a less than complete client view and often lead to
unsatisfactory user experiences.

 Toward a solution: overcoming siloed thinking. Experts advise organizations to

recognize the immense value of integrating their client-facing operations. In
this view, internally-focused, department-centric views should be discarded in
favor of reorienting processes toward information-sharing across marketing,
sales, and service. For example, sales representatives need to know about
current issues and relevant marketing promotions before attempting to cross-
sell to a specific client. Marketing staff should be able to leverage client
information from sales and service to better target campaigns and offers. And
support agents require quick and complete access to a client’s sales and service
history.[12]

[edit] Adoption issues

Historically, the landscape is littered with instances of low adoption rates. In 2003, a
Gartner report estimated that more than $1 billion had been spent on software that was
not being used. More recent research indicates that the problem, while perhaps less
severe, is a long way from being solved. According to CSO Insights, less than 40
percent of 1,275 participating companies had end-user adoption rates above 90
percent.[13]

In a 2007 survey from the U.K., four-fifths of senior executives reported that their
biggest challenge is getting their staff to use the systems they had installed. Further,
43 percent of respondents said they use less than half the functionality of their existing
system; 72 percent indicated they would trade functionality for ease of use; 51 percent
cited data synchronization as a major issue; and 67 percent said that finding time to
evaluate systems was a major problem.[14] With expenditures expected to exceed $11
billion in 2010,[14] enterprises need to address and overcome persistent adoption
challenges. Specialists offer these recommendations [13] for boosting adoptions rates
and coaxing users to blend these tools into their daily workflow:

 Choose a system that is easy to use: not all solutions are created equal; some
vendors offer applications that are more user-friendly – a factor that should be
as important to the decision as is functionality.

 Choose appropriate capabilities: employees need to know that the time they
invest in learning and in using the new system will not be wasted, indeed that it
will yield personal advantages; otherwise, they will ignore or circumvent the
system.

 Provide training: changing the way people work is no small task; to be

successful, some familiarization training and help-desk support are usually
required, even with today’s more usable systems.

 Lead by example: upper management must  use the new

application themselves, thereby showing employees that the top leaders fully
support the application – or else it will skew the ultimate course of the initiative
toward failure, by risking a greatly reduced rate of adoption by employees. [citation
needed]

[edit] Privacy and data security system

One of the primary functions of these tools is to collect information about clients, thus
a company must consider the desire for privacy and  data security, as well as the
legislative and cultural norms. Some clients 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 structures
This market grew by 12.5 percent in 2008, from revenue of $8.13 billion in 2007 to
$9.15 billion in 2008.[15] The following table lists the top vendors in 2006-2008
(figures in millions of US dollars) published in Gartnerstudies.[16][17]

2008 2008 Share 2007 2007 Share 2006 2006 Share

Vendor
Revenue (%) Revenue (%) Revenue (%)
SAP 2,055 22.5 (-2.8) 2,050.8 25.3 1,681.7 26.6
Oracle 1,475 16.1 1,319.8 16.3 1,016.8 15.5
Salesforce.com 965 10.6 676.5 8.3 451.7 6.9
Microsoft 581 6.4 332.1 4.1 176.1 2.7
Amdocs 451 4.9 421.0 5.2 365.9 5.6
Others 3,620 39.6 3,289.1 40.6 2,881.6 43.7
Total 9,147 100 8,089.3 100 6,573.8 100

[edit] Related trends
Many CRM vendors offer Web-based tools (cloud computing) and software as a
service (SaaS), which are accessed via a secure Internet connection and displayed in a
Web browser. These applications are sold as subscriptions, with customers not
needing to invest in purchasing and maintaining IT hardware, and subscription fees
are a fraction of the cost of purchasing software outright.

The era of the "social customer"[18] refers to the use of social media (Twitter,
Facebook, LinkedIn, Yelp, customer reviews in Amazon etc) by customers in ways
that allow other potential customers to glimpse real world experience of current
customers with the seller's products and services. This shift increases the power of
customers to make purchase decisions that are informed by other parties sometimes
outside of the control of the seller or seller's network. In response, CRM philosophy
and strategy has shifted to encompass social networks and user communities,
podcasting, and personalization in addition to internally generated marketing,
advertising and webpage design. With the spread of self-initiated customer reviews,
the user experience of a product or service requires increased attention to design and
simplicity, as customer expectations have risen. CRM as a philosophy and strategy is
growing to encompass these broader components of the customer relationship, so that
businesses may anticipate and innovate to better serve customers, referred to as
"Social CRM".

Another related development is Vendor Relationship Management, or VRM, which is

the customer-side counterpart of CRM: tools and services that equip customers to be
both independent of vendors and better able to engage with them. VRM development
has grown out of efforts by ProjectVRM at Harvard's  Berkman Center for Internet &
Society and Identity Commons' Internet Identity Workshops, as well as by a growing
number of startups and established companies. VRM was the subject of a cover story
in the May 2010 issue of CRM Magazine.[19]

In a 2001 research note, META Group (now Gartner) analyst Doug Laney first
proposed, defined and coined the term Extended Relationship Management. He
defined XRM as the principle and practice of applying CRM disciplines and
technologies to other core enterprise constituents, primarily partners, employees and
suppliers...as well as other secondary allies including government, press, and industry
consortia.

[edit] See also
 Business intelligence  Data mining
 Business Relationship Management  Database marketing
 Comparison of CRM systems  E-crm
 Consumer Relationship System  Employee experience management (
 Customer Experience  Enterprise Feedback Management (E
 Customer experience transformation  Enterprise relationship management
 Customer Intelligence  Extended Relationship Managemen
 Customer service - contains ISO standards  Help desk
 Data management  Mystery shopping
 Predictive analytics