The collaborative impact of the roles of businesses and consumers in the ecology of the economy leads to the establishment of the customer relationship management or CRM. CRM is a set of methodologies which acknowledges the important facets of customer interaction in relation to getting more benefits for both business and clients. It deals with knowing how to make a targeted approach in customer interfacing, and on how to make future innovations for their continued benefit. The process starts from collecting business data from customer interactions, analyze them, then make appropriate improvements, and innovate relevant products or services. It also does include external business elements like the vendors, suppliers, etc. to create a collaborative network that is both customer oriented and beneficial to the business at the same time.
Types of CRM
Customer relationship management is not just a business tool, but a comprehensive approach to establishing a healthy, functional, and active type of customer-business relationship that revolves around the needs and satisfaction of the customer. It works within the precepts of customer related interactions such as corporate partnerships, customer communication and service center, customer relations and business data analysis, and sales and marketing management. It also carries out its strategies and solutions through the use of data analytics, business intelligence, and automation.
CRM softwares are also responsible for an efficient implementation of sales and marketing strategies, and the evaluation of the performance of its deployed campaigns.
CRM is comprised of focused systems, which set its work on maintaining a functional role in the whole customer relationship management flow. CRM manages the workflow of these customer relationship systems, and streamline all processes involved, in order to establish an integrated and automated system. These focused systems that operate in CRM are categorized into three types:
Operational CRM
Operational CRM pertains to business processes that front end systems utilize such as the customer communication systems, the marketing campaign management, and sales driving initiatives. It aims to provide a streamlined approach in engaging potential customers to a holistic and complete business transaction experience with your company.
Components of operational CRM are made to be automated, in order to drive business data, analyze it, and apply it to the customer relationship management set up at greater speed and efficiency. This series of steps is done under one working platform. The seamless integration of all components is achieved through the use of technology, or a customer service management software.
Components of the operational CRM consist of marketing automation, sales-force automation, and service automation.
Marketing Automation
Marketing automation is that aspect of CRM which deals with the effective deployment of marketing campaigns that generate leads and sales for the company. Marketing campaigns utilize offline and online engagements, to be able to increase the company visibility in the market. Company visibility may impact the way it attracts more potential customers. It also employs different marketing channels to be able to get more business data from customer interactions and communications.
Marketing campaign management isn’t just a single solution process, but rather a multifaceted business aspect that deploys diverse strategies in order to attract customers of various preferences and needs. For it to be effective, it must use a targeted approach for a specific type of customer or need. This targeted approach can be developed from the analysis of business and customer data collated from different marketing channel sources.
Sales-Force Automation
Sales-force automation pertains to the overall sales process, which starts from lead generation, to prospect acquisition, and ultimately, in a client-business relationship. It also includes the ways of maintaining loyalty from present clients by deploying strategies and programs that nurtures and enriches the client experience in every business transaction.
In 2016, website compiled a series of statistics, which deals with the impact of loyalty programs in customer and client behaviors. In a business point of view, executives recognize this kind of impact in the business, wherein, according to a Forbes survey, about 32% expressed listing retention of existing customers as their top priority. 31% of the same group said that improvements in customer engagement also made it to their priority list, and 29% regarded the maximization of customer loyalty value as a top priority.
The customers, on the other hand, also expressed positive connotations to businesses that offer loyalty programs for them. In a Bond report, about 81% of the consumers said that they will most likely continue to trust a company that deploys loyalty programs. The very same group held 75% that mentioned that company loyalty programs are part of their good relationship with the business. Also, positively, 67% of the consumers said that they maximize points by modifying when or where to make purchases, as the company will dictate.
Service Automation
Service automation deals with the overall collaboration of processes involved in service rendering and client interaction within the business. It doesn’t just focus on marketing related interactions, but with customer service as well. It is a form of support to businesses in dealing with client concerns, dilemmas and inquires. The automation aspect is the streamlined workflow of all service processes, and in obtaining useful data from the said interactions.
2. Analytical CRM
Analytical CRM deals with the processes happening in the business back end, which focus on analyzing business data, in order to make it proactive and beneficial in promoting the components of operational CRM.
This particular type of CRM utilizes the elements of data mining, data warehouses, and decision support system. It effectively integrates the data from operational CRM in order to arrive at useful decision making in terms of applying the automation components mentioned above.
3. Collaborative CRM
Collaborative CRM resolves the integration and synchronization of processes and data across all business engagements (whether online or offline), business communication channels, and internal/external business data under a single management platform. In this case, a collaborative CRM software is the one that enables a unified and organized marketing system flow.
Collaborative CRM works by sharing access of business data to key business sectors which includes sales, marketing, finance and operations, in order to create a single collaborative working language. A collaborative working environment also invokes an atmosphere of insight sharing and affective task management that establishes a sense of accountability and teamwork. CRM automation enables a faster and efficient workflow within the system.
Collaborative CRM also categorizes itself into two aspects: interaction management, and channel management.
- Interaction management deals with the effective customer engagement and interaction within the business. It focuses on how to maximize the time wherein there is an exchange of information between the business and the lead. The time involved in the engagement isn’t necessary to be in verbal form, but can also be in content form of engagement like websites and marketing collaterals. It is also vital to engage a lead in a comfortable environment, with his/her preferred communication medium, in order to further maximize the potential of turning him/her into a valuable prospect and ultimately, into a client.
- Channel management correspond to the variation and optimization of all communication channels and system, in order to be more effective in customer interaction. CRM softwares enable to apply technology in optimizing communication systems, which also positively impacts the way the business monitor and gather data, and turn it into a more useful and actionable form.
Benefits of CRM
Customer relationship management is a broad system of putting emphasis on the importance of establishing robust customer relationship, and in implementing strategies, techniques and methodologies in order to achieve greater success in business. CRM softwares impact the way business does effective customer relationship management through the application of technology, which enables rapid deployment, increased process efficiency, heightened employee productivity and maximized opportunities and potential.
Customer relationship management tools also lessen the risks of costly mistakes within the business operations and implementations.
Through operational CRM, all strategies involved in invoking sales and clients for the business are optimized, in order to be more effective in sales-force management.
Operational CRM resolves to attract and nurture the company’s clients, to make them contribute more to the success of the business whether as credible testimonies or as sales drivers.
Analytical CRM makes use of techniques of recognizing patterns and correlations from business data and enters a sea of opportunities and potentials by applying data analytics. Findings and reports from the analysis can be useful in making informed and relevant decisions that will have an impact on the business. It is also beneficial in the fault finding process, wherein minor inconsistencies can lead to bigger problems for the business, if left unattended and addressed right away. It also helps in recognizing and in taking action on gaps in business strategies and applies the necessary corrective measures before everything blows out of proportion.
Analytical CRMs are also useful in product development, business forecasting, business optimization, risk management and fraud detection systems.
CRM Applications
The growing number of benefits and enhancements made in CRM softwares enable its application base widen its scope. The advancements in technology also optimize the processes involved in its effective implementation. Below, are four types of industries that benefit from CRM softwares:
1. Banking
Connectivity is one challenging aspect of the banking industry, due to the number of banking institutions that operate many branches across many geographical locations, across the world. Banks also create leverage in terms of its accessibility, especially that its business deals with a commodity in the form of monetary currency.
CRM softwares enables an efficient solution in connecting branch operations, and its clients, and promote convenience in transactions and service rendering. For an enterprise scaled business like a bank, it mostly utilizes cloud-based CRM services, in order to maximize the expansive network of the internet.
2. Lifestyle
The lifestyle industry also caters to a wide customer base, especially if it offers a range of multiple products and brands. A lifestyle business is a progressive industry, that’s when it becomes successful, the growth in its clientele will be fast. This poses a challenge in managing the operations and the customer base altogether, because it somehow operates with an added personal touch, wherein it is hard to achieve if it won’t be assisted by technology based business tools.
CRM tools make the effective gathering and consolidation of customer data under one database, which allows more flexibility in access across the business organization, and maximize it for better execution of tasks and customer oriented services.
3. Gaming
Gaming industries gain leverage by engaging customers in an ultimate video gaming experience, and by continuously improving on the facets of the game through gamer feedbacks, which are known to be active and quick in expressing their thoughts and ideas about the game.
CRM softwares keep track of valuable gamer feedbacks, and further analyze it, in order to implement improvements and follow ups on game installments rapidly.
4. Food Catering and Delivery
The food industry is a time oriented, and sensitive business, which profits in making high quality, delicious and fast food for people wherever they are; whether in homes, school or workplaces. Operating in a commodity based product, clients are steady and encompass both repeat and new customers. This could be particularly overwhelming, especially in being aware of the preferences, allergies, and other important considerations which can be found through customer profiling and data management.
CRM softwares are quick to address the need for a reliable business application, that can scale and flex according to changing customer preferences and needs, even up to the last minute.
Adopting CRM Challenges
Challenges in adopting CRM stem to ineffective implementation of the reports and opportunities that arise in the analysis of data collated from different sources. Also, one of the more prevalent disadvantages of deploying CRM is that it leads to customer favoritism, because of the varied treatment made with different types of clients. Hidden pricing and surcharges in goods and services are also associated with customer relationship management. The differential treatment issues nonetheless affect some customers, because it gives back negative perception about how the company services them, which is somehow partial and unfair.
The market nowadays has evolved from being product oriented into customer oriented. In the past, it was the business who has the capacity to know what goods the people would need, and would actually have the “power to enforce” it to them. With this kind of market behavior, the focus is to make more of a certain product to be able to distribute it to more people. The idea of “consumer” came from this market behavior, wherein most goods produced are “consumable”, which entails greater production of the same kind, that in turn strengthened the manufacturing industry. It is a kind of market behavior where the goods produced must be in huge quantities, or in mass level.
As more products and services are developed, the market has become a source of both necessities and luxuries, which spoilt consumers of choices and alternatives. Alongside, the dawn of the computer technology gave birth to the information age, where consumers started to become educated on how things work and what are the things that they want. Many people become “awakened”, which lead them to become entrepreneurs themselves, aiming to give more solutions to pressing needs that wasn’t able to be addressed before. Consumers have also become expressive about their needs and feedbacks to businesses. And through the advancements in technologies that lead to improved communication systems, the customer-business relationship has improved as well. The once one way focused market industry, now became a two way relationship, which contributes to how businesses will make future innovations, and improve on their services, in order to encourage more customers and retain the current ones, and to ultimately drive more sales.
Do you want to make realistic expectations when it comes to customer management softwares? Check out these reviews of CRM softwares from current clients, and diversify your knowledge base before choosing the best CRM software for your business.
Jeev Trika
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