Customer Relationship Management

What is CRM?

In simplest terms CRM or, customer relationship management is a broad term that covers concepts used by companies to manage the relationships with customer's potential customers , providing long lasting mutual benefits. This includes the capture, storage and analysis of customer information. 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 result of which can be used to create and automate a variety of processes that help you specify and target valuable customers. More important these processes enable you to personalise new and ongoing interactions to cost-effectively find, acquire and retain these 'good' customers.

In essence CRM systems help you distinguish between customers which are good business and customers which are not so good automating this into your entire customer base and prospect pool, as your business and markets evolves and expands over time.

Aspects of CRM

There are three aspects of CRM which can each be implemented in isolation from each other:

• Operational CRM- automation or support of customer processes that include a company's sales or service representative
• Collaborative CRM- direct communication with customers that does not include a compan's sales or service representative
• Analytical CRM- analysis of customer data for a broad range of purposes

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

One of the main benefits of this contact history is that customers can interact with different people or different contact "channels" in a company over time without having to repeat the history of their interaction each time.

Consequently, many call centre's use some kind of CRM software to support their call centre agents.

Collaborative CRM covers the direct interaction with customers. This can include a variety of channels, such as internet, email, automated phone (Automated Voice Response AVR). It can generally be equated with "self service".

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

• Design and execution of targeted marketing campaigns to optimise marketing effectiveness
• Design and execution of specific customer campaigns, including customer acquisition, cross-selling, up-selling, retention
• Analysis of customer behaviour 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).