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Customer relationship management (CRM) is a model for managing a company’s interactions with current and future customers. It involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support.
CRM systems for marketing track and measure campaigns over multiple communication channels, such as email, search, social media, telephone and direct mail. These systems track clicks, responses, leads and deals.
CRM systems can be used to create, assign and manage requests made by customers, such as call center software which helps direct customers to agents. CRM software can also be used to identify and reward loyal customers over a period of time.
CRM systems can automatically suggest suitable appointment times to customers via e-mail or the web. These can then be synchronized with the representative or agent's calendar.
The modern environment requires one business to interact with another via the web. According to a Sweeney Group definition, CRM is “all the tools, technologies and procedures to manage, improve, or facilitate sales, support and related interactions with customers, prospects, and business partners throughout the enterprise”. It assumes that CRM is involved in every B2B transaction.
Despite the general notion that CRM systems were created for the customer-centric businesses, they can also be applied to B2B environments to streamline and improve customer management conditions. B2C and B2B CRM systems are not created equally and different CRM software applies to B2B and B2C conditions. B2B relationships usually have longer maturity times than B2C relationships. For the best level of CRM operation in a B2B environment, the software must be personalized and delivered at individual levels.
Well-designed CRM includes the following characteristics:
Many of the characteristics in the B2B market suggest that CRM is a factor which influences the business. According to Zeng CRM has special characteristics in the B2B market. First of all, there is the “critical mass”. Due to customer relationship this network can be established and extended. Extension causes the network not to increase benefits linearly, but in an exponential way. As new members can be contacted by any existing member the benefit of a network of 200 people is much more effective than one with 100. Hence, these networks can be used to increase the amount of available information for each company. This may lead to more information about a customer which can be used to make the way of handling the customer easier in the future. The history of previous sales from this customer may be a great relief. Moreover it is possible to establish technical cooperation a bigger network is more likely to provide special services. These services include among others “systems integration, hosting, financial services such as payment processing, receivables management, credit analysis and logistics services”. Services of this kind encourage companies to join the B2B network by using CRM. Furthermore, B2B hubs have another advantage as they can substitute external personal if members of the network liaise. This may not only avoids extra costs for arrangement of a new contract but is also likely to accelerate the speed of this arrangement, as they are in the same network and already possess information about their negotiating partner. Ultimately, special knowledge is required for B2B markets. As B2B customers generally more rational customers than B2Cs, a person or a team with special knowledge to each customer or industry may enhance the sales in this area.
There are numerous steps company should follow while implementing CRM system. The project manager is responsible for the success of this process. Some conditions need to be checked by the company before the starting implementation directly:
Selecting a CRM program means finding the software that fits the company’s needs. All the CRM software comes many features and tools, and despite the fact that many of CRM product offer similar feature sets, there are some unique tools in each one. Programs can be divided into categories by the following criteria: Features mean how well it integrates with other applications (ex. Outlook, Gmail, iCall etc.) and how accessible information is. It covers everything from calendar alerts and to-do lists to mobile access and synchronization capabilities. Contact information ranking outlines the program’s ability to store specific information for each contact. Business world is a fast-paced so managers are need to be able to access customer’s information quickly. Sales and marketing tools designed to help and maintain current clients and gain new ones. Important that this tools help find campaigns with positive ROI and those that are not performed. Ease of use is about app’s design.Programs are checked on clean, quick navigation and easy-to-locate of the most important items. Help and support is about what support CRM software manufacturer provides for their product.
B2B and B2C marketing operates differently, that is why they can not use the same software. All the differences are focused on the approach of these two types of businesses:
Patricia Jones found out that B2B operations require special CRM solutions that are not the same for B2C industry:
So, all the B2B applications must be both personalized and be able to establish channels of support communication for customers
For small businesses a CRM system may simply consist of a contact manager system which integrates emails, documents, jobs, faxes, and scheduling for individual accounts. CRM systems available for specific markets (legal, finance) frequently focus on event management and relationship tracking as opposed to financial return on investment (ROI).
CRM often makes use of social media to build up customer relationships. Some CRM systems integrate social media sites like Twitter, LinkedIn and Facebook to track and communicate with customers sharing their opinions and experiences with a company, products and services. Enterprise Feedback Management software platforms such as Confirmit, Medallia, and Satmetrix combine internal survey data with trends identified through social media to allow businesses to make more accurate decisions on which products to supply.
Systems for non-profit and membership-based organizations help track constituents, fund-raising, demographics, membership levels, membership directories, volunteering and communication with individuals.
CCRM is a style of customer relationship management that focuses on customer preferences, instead of customer leverage. This is a nascent sub-discipline of traditional customer relationship management, to take advantage of changes in communications technology.
A CRM system becoming more “customer-centric” means being able to manage critical relationships more effectively and being positioned to offer new and expanded services.
Customer centric organizations help customers make better decisions and drive profitability. CCRM adds value by engaging customers in individual, interactive relationships.
Customer-centricity differs from client-centricity in that the latter refers almost exclusively to business-to-business models rather than customer-facing firms.
Customer-centric relationship management is used in marketing, customer service and sales, including:
In 2003, a Gartner report estimated that more than $2 billion had been spent on software that was not being used. According to CSO Insights, less than 40 percent of 1,275 participating companies had end-user adoption rates above 90 percent. Many corporations only use CRM systems on a partial or fragmented basis. In a 2007 survey from the UK, four-fifths of senior executives reported that their biggest challenge is getting their staff to use the systems they had installed. 43 percent of respondents said they use less than half the functionality of their existing system.. Recently, it is found in a study that market research regarding consumers preference may increase the adoption of CRM among the developing countries' consumers.
The CRM market grew by 12.5 percent in 2008, from revenue of $8.13 billion in 2007 to $9.15 billion in 2008. The following table lists the top vendors in 2006–2008 (figures in millions of US dollars) published in Gartner studies.
|Vendor||2008 Revenue||2008 Share (%)||2007 Revenue||2007 Share (%)||2006 Revenue||2006 Share (%)|
|SAP AG||2,055||22.5 (−2.8)||2,050.8||25.3||1,681.7||25.6|
Many CRM vendors offer subscription-based web tools (cloud computing) and software as a service (SaaS). Some CRM systems are equipped with mobile capabilities, making information accessible to remote sales staff. Salesforce.com was the first company to provide enterprise applications through a web browser, and has maintained its leadership position. Traditional providers have recently moved into the cloud-based market via acquisitions of smaller providers: Oracle purchased RightNow in October 2011 and SAP acquired SuccessFactors in December 2011.
The era of the "social customer" refers to the use of social media (Twitter, Facebook, LinkedIn, Google Plus, Pinterest, Instagram, Yelp, customer reviews in Amazon, etc.) by customers. CR philosophy and strategy has shifted to encompass social networks and user communities.
Sales forces also play an important role in CRM, as maximizing sales effectiveness and increasing sales productivity is a driving force behind the adoption of CRM. Empowering sales managers was listed as one of the top 5 CRM trends in 2013.
Another related development is vendor relationship management (VRM), which provide tools and services that allow customers to manage their individual relationship with vendors. VRM development has grown out of efforts by ProjectVRM at Harvard's Berkman Center for Internet & Society and Identity Commons' Internet Identity Workshops, as well as by a growing number of startups and established companies. VRM was the subject of a cover story in the May 2010 issue of CRM Magazine.
In 2001, Doug Laney developed the concept and coined the term 'Extended Relationship Management' (XRM). Laney defines XRM as extending CRM disciplines to secondary allies such as the government, press and industry consortia.
CRM futurist Dennison DeGregor describes a shift from 'push CRM' toward a 'customer transparency' (CT) model, due to the increased proliferation of channels, devices, and social media.