Customer Relationship Management

Aspects of CRM

There are three or more aspects of CRM, each of which can be implemented in isolation:

1. Operational CRM: The automation or support of customer processes involving sales or service representatives
2. Collaborative CRM: Direct communication with customers not involving sales or service representatives (“self service”)
3. Analytical CRM: The analysis of customer data for a broad range of purposes

Operational CRM

Operational CRM provides support to "front office" business processes / teams, including sales, marketing and service. Each interaction with a customer is generally added to a customer's contact history, and staff can retrieve and update information on customers from the database as necessary.

Data gathered on customers can be used to determine how a customer is handled. Data may include profitability, contact history and products purchased. Staff members are able to access this data when servicing customers or making a sales pitch.

Collaborative CRM

Collaborative CRM covers the direct interaction with customers. This can include a variety of channels, such as the Internet, whether through a website or e-mail, or automated telephone systems. It can generally be equated with “self service”. One of the latest trends in collaborative CRM is behavioral emarketing which is focused on building an ongoing relationship with customers through online mediums (emails, RSS Feeds, XML, Vlogs, Blogs, etc.).

The objectives of Collaborative CRM can be broad, including cost reduction and service improvements.

Analytical CRM

Analytical CRM analyzes customer data for a variety of purposes, including:

• 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 (e.g. pricing, new product development, etc)
• management decisions, e.g. financial forecasting and customer profitability analysis
• prediction of the probability of customer defection (churn).

Analytical CRM generally makes heavy use of Predictive analytics.

Technology considerations

The technology requirements of a CRM strategy can be very complex and far reaching. The basic building blocks 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.

Privacy and Data Security

The data gathered as part of CRM must respect customer privacy and data security. Customers want the reassurance that their data will not be shared with third parties without their consent or accessed illegally by anyone.

Customers also want to benefit when their information is used by companies. For instance, an increase in unsolicited telemarketing calls is generally resented by customers while a small number of relevant offers is generally appreciated.

Customer relationship management software

Customer relationship management software is comprised of both business management and automation of the front-office divisions of an organization. CRM software is essentially meant to address the needs of Marketing, Sales and Distribution, and Customer Service and Support divisions within an organization and to allow the three to share data on prospects, customers, partners, competitors and employees. The purpose of CRM software is to manage the customer through the entire lifecycle, i.e. from prospect to qualified opportunity to order.

CRM software automates many of the needs of Marketing, Sales and Support users, such as Telephony, or the ability to conduct phone calls and manage call data, and tools to capture, share and manage automated alerts on lead data as it passes through the sales pipeline. CRM software provides a standard framework for pushing leads through a sales pipeline and managing it amongst many stakeholders in real time, in order to provide better customer relations and grow revenues by creating more sales, and losing fewer customers.