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CRM (Customer Relationship Management)



Customer Relationship Management refers to the holistic approach an organization can take to manage their relationships with customers, including policies related to contact with customers, collecting, storing and analyzing customer information and the technologies needed to perform these tasks. You should think of CRM as a strategic process that will help you understand your customer's needs and how you can meet those needs and enhance your bottom line a the same time.

The efficiencies that CRM or SFA Software has brought to the business of sales and customer support, has also recently spread into the marketing functions of thousands of successful businesses, already utilizing CRM Software initially as a sales management software tool.
Some of the top CRM and SFA Software systems now offer marketing modules which specifically integrate a marketing campaign, seamlessly into a sales effort, then on to customer management as a single CRM Software package. Some CRM or SFA vendors offer the Marketing Software module separately, and others include it with the basic CRM Software.



Goals of CRM

The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. With an effective CRM strategy, a business can increase revenues by:
  • providing services and products that are exactly what your customers want
  • offer better customer services
  • cross selling products more effectively
  • helping sales staff close deals faster
  • retaining existing customers and discovering new ones

Types of CRM


There are several different levels of CRM an organization can choose to deploy:
1. Active CRM: A centralized database for storing data, which can be used to automate business processes and common tasks.
2. Operational CRM: The automation or support of customer processes involving sales or service representatives
3. Collaborative CRM: Direct communication with customers not involving sales or service representatives (“self service”)
4. Analytical CRM: The analysis of customer data for a broad range of purposes

Active CRM


The main module of any CRM, contains the technology aspect of the CRM system.

Operational CRM


The Operational portion of CRM is the functions of a CRM system that are used in the day to day operations of an organization. This can include recording information from interactions with customers and storing the data in the customers contact history for future use by the organization.

Collaborative CRM


Collaborative CRM refers to the ways the organization directly interacts with a customer such as email, internet forms, and phone contacts.

The goals of Collaborative CRM often include cost reductions and customer service improvements. Many organizations will employ Collaborative CRM as a way to gain a competitive advantage by using customer intimacy derived from the database of customer information to ensure more constructive customer interactions.

Analytical CRM


Analytical CRM is the module of a CRM system that analyzes customer data for any number of purposes. A few common ones include:

  • Design and execution of targeted marketing campaigns to optimize marketing effectiveness
  • Design and execution of specific customer campaigns, including customer acquisition, cross-selling, up-selling, retention
  • Analysis of customer behavior to aid product and service decision making (eg pricing, new product development, etc)
  • Management decisions, e.g. financial forecasting and customer profitability analysis
  • Risk assessment and fraud detailer for credit card transactions

Technology


The technology that is needed to run a successful CRM system in an organization vary in any number of different ways each determined by the goals and practices of the organization in relation to what they want their CRM system to accomplish. Some basic requirements may include:

  • A database to store customer information. This can be a CRM specific database or an enterprise data warehouse.
  • Operational CRM requires customer agent support software.
  • Collaborative CRM requires customer interaction systems, eg an interactive website, automated phone systems etc.
  • Analytical CRM requires statistical analysis software, as well as software that manages any specific marketing campaigns.

  • Support CRM systems require interactive chat software to provide live help and support to web site visitors.

Software


Several technology giants in the industry today have CRM software packages that businesses can impliment and that promise to provide the best possible outcomes for an organization. A few of these products include:


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How long will it take to get CRM in place?

If you decide to go with a hosted CRM solution from an application server and you are planning to use the software for a specific department like sales, the deployment should be relatively quick - perhaps 30 - 90 days. However, if you are deploying either a hosted application or an on-premise package (involving the purchase of software licenses upfront) on enterprise-wide basis (that involves different departments like sales, marketing, and operations), you should expect the implementation and training to take months, if not years. The time it takes to put together a well-conceived CRM project depends on the complexity of the project and its components and how well you manage the project.

How much does CRM cost?


Prices vary depending on what you implement. A hosted sales automation application can cost between $65 and $150 a month for a basic sales automation package. If you want more sophisticated functionality and a greater level of support, you pay a lot more. An enterprise on-premise CRM package can cost anywhere between several thousand to several millions of dollars, depending again on how many functions you purchase and how many computers or “seats” have access to the software. For instance, one company or department might purchase an email marketing management application or a sales force automation application, while a larger firm might want to purchase an integrated package that includes a database as well as applications for marketing, sales and customer service and support (via call centers and online). Obviously, the integrated software package is much more expensive.

What are advantages of hosted or on-demand CRM vs. on-premise and vice versa?

In the last few years, the market for on-demand CRM has soared particularly among small and mid-sized companies, largely because of fears about the expense and complexity of large-scale on-premise CRM implementations. And indeed, on-demand CRM is often a good choice for companies that want to implement standard CRM processes, are able to use out-of-the-box data structures, with little or no internal IT support, and don’t require complex or real-time integration with back office systems.
However, on-demand CRM software is not always as simple as the vendors would have you believe. For instance, customization can be problematic and hosted CRM vendors’ API tools cannot provide the degree of integration that is possible with on-site applications. Getting a hosted CRM system working shouldn’t take as long as a traditional software package, but larger and more complex rollouts can still take a year or more. And while the hosted option reduces the need for in-house technical support, upgrades can still sometimes be technically tricky. In addition, some companies with particularly sensitive customer data, such as those in financial services and health care, may not want to relinquish control of their data to a hosted third party for security reasons. As a result, AMR Research predicts that even by 2009, hosted CRM applications will account for only 12 percent of the total U.S. CRM market. For more information, please visit The Truth About On Demand CRM.

What are the keys to successful CRM implementation?

  • Develop your customer-focused strategy first before considering what kind of technology you need.
  • Break your CRM project down into manageable pieces by setting up pilot programs and short-term milestones. Start with a pilot project that incorporates all the necessary departments but is small enough and flexible enough to allow tinkering along the way.
  • Make sure your CRM plans include a scalable architecture framework. Think carefully about what is best for your enterprise: a solution that ties together “best of breed” software from several vendors via Web Services or an integrated package of software from one vendor.
  • Don't underestimate how much data you might collect (there will be LOTS) and make sure that if you need to expand systems you'll be able to.
  • Be thoughtful about what data is collected and stored. The impulse will be to grab and then store EVERY piece of data you can, but there is often no reason to store data. Storing useless data wastes time and money.

What causes CRM projects to fail?

Many things. From the beginning, lack of a communication between everyone in the customer relationship chain can lead to an incomplete picture of the customer. Poor communication can lead to technology being implemented without proper support or buy-in from users. For example, if the sales force isn't completely sold on the system's benefits, they may not input the kind of demographic data that is essential to the program's success. One Fortune 500 company is on its fourth try at a CRM implementation, because it did not do a good job at getting buy-in from its sale force beforehand and then training sales staff once the software was available.

Privacy and Data Security

The data gathered as part of CRM must consider customer privacy and data security. Customers want the assurance that their data is not shared with 3rd parties without their consent and not accessed illegally by 3rd parties. Customers also want their data used by companies to provide a benefit for them. For instance, an increase in unsolicited telemarketing calls is generally resented by customers while a small number of relevant offers is generally appreciated. Attention to these types of details allows for a business practice better customer service and entice customers to continue doing business with them.



References

http://www.wikipedia.com