The simplest, broadest definition can be found in the name: CRM is a comprehensive way to manage the relationship with your customers — including potential customers — for long-lasting and mutual benefit. More specifically, modern CRM systems enable you to capture information surrounding customer interactions and integrate it with every customer-related function and data point.
The resulting information mosaic is then used to create and automate a variety of processes that identify, and describe, valuable customers. Most important, these processes help you personalize new and ongoing interactions to cost-effectively acquire, stay close to, and retain these “good” customers.
Put another way, there are good customers and not-so-good customers. Can you tell them apart? What will it take to keep the good ones good (or make them better) — and how can you get more of them? Can you improve the not-so-good ones — and is it worth the effort? Now apply these principles automatically, to your entire customer base and prospect pool, as your business and the market evolve over time. That is CRM.
Who Benefits from CRM ?
CRM can benefit virtually all departments within a business, including sales and support, finance, forecasting, human resources, manufacturing, R&D, and logistics.
Strategy First. Technology Second
The key to successful CRM is a customer-centric business philosophy and culture that ensures every company activity serves a customer need. CRM isn’t all about the technology. Rather, the right CRM technology turns proper strategy into desirable results. First you analyze the quality and effectiveness of your customer-related processes — then eliminate, update, redesign, and create as necessary. You cannot automate your way out of bad processes.
CRM: The Challenge
Good CRM isn’t easy. Changing a culture and entrenched ways of business takes top-to-bottom determination. Existing processes must be scrutinized; even sound processes may need to be overhauled to accommodate new CRM information.
Although software applications are used to gather and disseminate customer information to all involved, make no mistake — CRM is more than technology. It’s a complete back-to-front company operation involving the executives that must support it, the people that will implement it, and the technology that will make it work.
Is CRM Right for You?
CRM can mean increased customer loyalty and profitability. But that path involves top-to-bottom buy-in; analysis and redesign of existing processes to accommodate reams of new information; and implementation of whatever new technology is required. Depending on the size of the company, this process can take a few weeks to a year or more, and involve simple Web-based programs to multi-million dollar installations.
CRM: The Payoff
On the plus side, customers with successful CRM systems report higher profits; lower costs to attract and retain customers; greater customer loyalty; and smoother, more streamlined workflows. Specific benefits cited include:
- More timely and targeted customer services
- Increased per-customer revenues
- Greater cross-sell and up-sell success
- Trimmed sales cycles
- More-efficient call center operations
- Improved sales forecasting
- Fewer customer problems
- Better-informed marketing decisions
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