According to abbreviationfinder, CRM comes from the acronym for the English term customer relationship management, and can have several meanings: Management based on the relationship with customers. CRM is a management model for the entire organization, based on customer satisfaction (or market orientation according to other authors).
The CRM is a strategy similar to the networking but focused on the information provided by the client to discuss it with the idea of satisfying their needs. Plus, boost productivity by taking advantage of every interaction with your customers.
It gives the company the valuable opportunity to get to know the customer and, therefore, learn to serve them. It should not be wasted.
CRM (Customer Relationship Management), in its literal translation, is understood as Customer Relationship Management, but it is as generic as any phrase in English translated into Spanish. But for your better understanding it basically refers to a customer-centric business strategy.
According to Don Alfredo De Goyeneche, in his publication in the journal Economics and Administration of the University of Chile, he refers that before…
“CRM we are facing a business model whose strategy is designed to identify and manage the relationships in those accounts that are most valuable to a company, working differently in each one of them in order to improve the effectiveness on customers.” In short, be more effective when interacting with customers.
The CRM contains 10 components:
- Sales functionality and its administration.
- The telemarketing.
- Time management.
- Customer service and support.
- The marketing.
- Information management for executives.
- The integration of ERP (Enterprise Resource Planning).
- The excellent synchronization of the data.
- The e-Commerce.
- The service in the field of sales.
- CRM is dedicated to acquiring and maintaining customer loyalty, specifically those most valuable accounts.
- You will get more money from customers, when you pay more attention and time; This is how Janice Anderson, vice president of CRM Solutions at Lucent Technologies, conceptualizes it.
- CRM not only focuses on customer retention and loyalty, but also on having more effective marketing, creating smart cross-selling opportunities and opening the possibility for a rapid introduction of new products or brands.
- In reality, what companies want is to reduce the cost of obtaining new customers and increase the loyalty of those who have already approached. Conforming the latter one of the most valuable assets of the company.
Communication with the customer
To achieve viable communication with customers, they use several ways such as:
- Direct mail is the most used traditional means to establish communication between the company and its customers.
- The Call Center (or call centers), its effectiveness has been reflected in the satisfaction of each of its customers.
- The e-mails.
- The internet.
In the process of implementing a CRM system, not only the technological part should be involved, but the entire company must live the adventure of adopting CRM. How to do it? Barton Goldenberg with his 14 damage experience in this area sums it up in 10 success factors:
- Determine the functions that you want to automate.
- Automate only what needs to be automated.
- Obtain the support and commitment of the highest levels of the company.
- Use technology wisely.
- Involve users in building the system.
- Make a prototype of the system.
- Train users.
- Motivate the staff who will use it.
- Manage the system from within.
- Maintain an administrative committee of the system for doubts or suggestions.
Future of CRM
CRM promises to implement solutions to various problems, thereby increasing profits and reducing costs. CRM is considered from a broader point of view, -as a tool to listen to the client, learn to understand it, and adapt products and services to their particular needs-, it is an increasingly valuable application, surviving in the long term.
Not only does the future of this tool, but also that of the very company that will increasingly need to provide excellent customer service to be in a position to compete in the marketplace.
The important “theoretical” opportunities that CRM offers are known to all. In successful cases, results are found in the operational area such as sales increases of up to 43% per seller, increases in customer satisfaction of 22%, sales cycle reductions of 24%, etc. However, some data on successful CRM implementations is chilling. According to Meta Group, 55 to 75% of CRM projects do not achieve objectives. Gartner Group states that currently, 65% of CRM projects fail and that percentage will grow to 80% in 2003. These problems are mainly based on not meeting expectations as well as a significant increase in initial budgets.
If the decalogue of the reasons for failure of CRM is analyzed, it is found that they are similar to those of other areas related to e-business:
- Thinking that technology is the solution. Technology only makes sense if you have perfectly defined business objectives.
- Lack of support from management due to the lack of knowledge of the opportunities that CRM offers.
- There is no “passion for the customer” in the culture of the organization.
- Return on investment unclear because it is not a mature sector and there is a general lack of knowledge about its RoI.
- Lack of vision and strategy. It is a common problem not to have a clearly defined strategy and, therefore, measurable business objectives in the CRM area. In addition, the problem increases when there is not a correct allocation of resources and a correct methodology for the development of the project.
- Don’t redefine processes. As in other types of technological projects, it is necessary to redefine the business processes to achieve the desired results. The way things are done in the organization needs to be redefined to achieve results.
- Poor quality of data and information. One of the pillars of CRM is customer knowledge (customer intelligence) and within this concept the quality of data and information is basic since it is from them that conclusions are drawn.
- Problems with integration. An IDC study indicates that less than 10% of those surveyed have integrated their CRM with their ERP or their “data warehouse”.
- Not managing change properly. Like any large project, proper management of change and organizational culture is necessary.
- Little implementation of analytical CRM: The analytical part of CRM is responsible for drawing conclusions about current and potential customers from a large amount of data. Without the analytical part, you cannot get a global vision of the customer and therefore most of the advantages that CRM offers.
In addition, there would also be causes due to the “immaturity” of the market: poorly evolved and validated solutions, lack of “vertical” solutions, lack of specialized consultants, and so on.
You can integrate it with other products, such as Sage CRM. This allows you to grow even more, by taking advantage of social networks and the latest mobile developments. Plus, it can complement management software by integrating with any end-to-end Sage solution.