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1.1 CRM - Definition & Concept

This document defines CRM as an organized approach to developing, managing, and maintaining profitable customer relationships. It discusses how CRM uses technology to help businesses identify, acquire, and retain customers through marketing, sales, and customer service. The key elements of a CRM system include analytics, business reporting, customer service, human resource management, lead management, marketing, sales force automation, and workflow automation. The main objectives of CRM are to improve customer satisfaction, expand the customer base, enhance business sales, and improve workforce productivity.

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Palak Jain
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63 views4 pages

1.1 CRM - Definition & Concept

This document defines CRM as an organized approach to developing, managing, and maintaining profitable customer relationships. It discusses how CRM uses technology to help businesses identify, acquire, and retain customers through marketing, sales, and customer service. The key elements of a CRM system include analytics, business reporting, customer service, human resource management, lead management, marketing, sales force automation, and workflow automation. The main objectives of CRM are to improve customer satisfaction, expand the customer base, enhance business sales, and improve workforce productivity.

Uploaded by

Palak Jain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CRM: Definition, Importance and Elements

“Successful CRM is about competing in the relationship dimension. Not as an


alternative to having a competitive product or reasonable price, but as a
differentiator. If your competitors are doing the same thing as you are (as they
generally are), product and price won’t give you a long-term, sustainable
competitive advantage. But if you can get an edge based on how customers feel
about your company, it’s a much stickier–sustainable–relationship over the long
haul.”
− Bob Thompson, CustomerThink Corporation
Business people started using the term Customer Relationship Management (CRM) since the
early 1990s when the concept of business started to change from being transactional to
relational. CRM directly contributes towards customer benefits and the growth of businesses.

Information Technology plays a very critical role in identifying, acquiring, and retaining the
customers, and thereby managing a healthy relationship with them.

What is CRM?

There can be multiple definitions of CRM from different perspectives −

 From the viewpoint of the Management, CRM can be defined as an


organized approach of developing, managing, and maintaining a profitable
relationship with customers.
 By equating the term with technology, the IT organizations define CRM
as a software that assists marketing, merchandising, selling, and smooth
service operations of a business.
 As per Franics Buttle, World’s first professor of CRM, it is the core business
strategy that integrates internal processes and functions, and external
networks, to create and deliver value to a target customer at profit. It is
grounded on high quality customer data and information technology.

The primary goal of CRM is to increase customer loyalty and in turn improve business
profitability.

Ingredients of CRM

Take a look at the following illustration. It shows the ingredients that work together to form a
successful CRM system.
Here are some of the important ingredients of CRM:

 Analytics− Analytics is the process of studying, handling, and representing


data in various graphical formats such as charts, tables, trends, etc., in order
to observe market trends.
 Business Reporting− Business Reporting includes accurate reports of sales,
customer care, and marketing.
 Customer Service− Customer Service involves collecting and sending the
following customer-related information to the concerned department −


 Personal information such as name, address, age
 Previous purchase patterns.
 Requirements and preferences.
 Complaints and suggestions.

 Human Resource Management− Human Resource Management involves


employing and placing the most eligible human resource at a required place
in the business.
 Lead Management− Lead Management involves keeping a track of the
sales leads and distribution, managing the campaigns, designing customized
forms, finalizing the mailing lists, and studying the purchase patterns of the
customers.
 Marketing− Marketing involves forming and implementing sales strategies
by studying existing and potential customers in order to sell the product.
 Sales Force Automation− Sales Force Automation includes forecasting,
recording sales, processing, and keeping a track of the potential interactions.
 Workflow Automation− Workflow Automation involves streamlining and
scheduling various processes that run in parallel. It reduces costs and time,
and prevents assigning the same task to multiple employees.

Objectives of CRM

The most prominent objectives of using the methods of Customer Relationship Management
are as follows −

 Improve Customer Satisfaction− CRM helps in customer satisfaction as


the satisfied customers remain loyal to the business and spread good word-
of-mouth. This can be accomplished by fostering customer engagement via
social networking sites, surveys, interactive blogs, and various mobile
platforms.
 Expand the Customer Base− CRM not only manages the existing
customers but also creates knowledge for prospective customers who are yet
to convert. It helps creating and managing a huge customer base that fosters
profits continuity, even for a seasonal business.
 Enhance Business Sales− CRM methods can be used to close more deals,
increase sales, improve forecast accuracy, and suggestion selling. CRM
helps to create new sales opportunities and thus helps in increasing business
revenue.
 Improve Workforce Productivity− A CRM system can create organized
manners of working for sales and sales management staff of a business. The
sales staff can view customer’s contact information, follow up via email or
social media, manage tasks, and track the salesperson’s performance. The
salespersons can address the customer inquiries speedily and resolve their
problems.

History of CRM

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