A large amount of any company’s efforts and budget go toward finding and retaining customers. What if database and programming technology combined with innovation could automate much of this work, reduce costs, and improve customer relations, all while improving overall efficiency and value to the customer? It can, in fact! Effective customer relationship management is vital to any business, and CRM software makes the entire process much more successful.
But what is customer relationship management? Below is a brief description of the customer relationship management model, how it works, what might keep it from working to its greatest potential, and some related trends that it has recently created in the marketplace.
What is it?
Customer relationship management (CRM) is a model for managing the interactions of a company with its customers, clients, and prospective sales contacts. It manages sales activity, customer support, technical support, and marketing by automating and synchronizing similar processes throughout a business. The goals of CRM are attracting and keeping customers, bringing former customers back into the fold, and streamlining activities to reduce the costs of marketing and customer service. The model is also used to simplify and organize internal company relationships.
Benefits of CRM
Although a CRM model is intended to save a business money, its primary goal is to improve efficiency and relationships with clients. The benefits of adopting a CRM model include the following:
- Quality and efficiency
- Lower overall costs
- Higher productivity
A well-thought-out model will create a seamless interface and help a company realize its full potential, but businesses often experience some challenges getting into a streamlined CRM process. These initial hurdles are completely normal, and are overcome with some time and practice. Challenges can include a lack of training for employees, a lack of commitment or continuity from senior executives, and an overly complex or unwieldy interface. Certain areas of the model may be more difficult to manage and therefore can be ignored or underused by employees, which leads to fragmentation and inefficiency. If the interface is difficult to navigate, it presents obstacles for both employees and customers. Hiring talented technical staff to create an interface that is usable and can grow and flex with an increasingly complicated business model and data set, as well as securing a commitment from employees at all levels, are at the heart of a successful CRM model and a sustainable implementation.
Types of CRM
- CRM automation uses a contact management system to track every stage of the sales process, requiring fewer representatives to initiate and maintain contact with potential and existing customers.
- Marketing processes track and measure multichannel campaigns, including social media and direct email or mail, to generate leads. A model called prospect relationship management (PRM) tracks customer behavior and brings them to the first sale, cutting out active sales campaigns entirely.
- Software for customer support, such as call center programs, also helps to reduce the work force required to manage existing customers. It is designed not only to assist clients with problems but also to identify and reward loyal customers.
- CRM models have also been designed and implemented for the special requirements of small businesses, social media channels, and not-for-profit organizations.
- Cloud computing and “software as a service” (SaaS) allow customers to subscribe to a cloud and access software for a reasonable subscription fee.
- Vendor relationship management (VRM) is a counterpart of CRM that allows customers to access vendors without forming long-term relationships with them.
- Extended relationship management (XRM) is in part the practice of applying CRM disciplines and technologies to all levels of the enterprise and all associated constituents. This involves not only the associated customers, but other levels of partnership such as the government and the media.
CRM is changing the intricate relationships among companies, customers, vendors, and other business partners. Technology has made it possible to track consumer behavior precisely and make successful sales happen with virtually no exhaustive effort on the part of the company, allowing them to focus efforts on nurturing new and existing relationships, and placing efforts into other areas of company growth.