Research Paper on CRM
There had been many management concepts which had become famous in the business oral however all of them were short lived. None of them could meet the requirements of the changing business world. Introduction Customer Management Relationship is known as CRM. It is a business strategy where all the processes, people and technologies of a company combine to meet and understand customers need. CRM is an integrated approach, which focuses on managing long term relationships and retaining customers.
In today’s competitive business, irrespective of the type of industries, customer focus is the key to long term growth. CRM helps in evolving organizations to customer-centric ones. Kennedy & King (2004) point out that many companies are facing challenges sustaining and establishing their business models and as a result the company has to go through downsizing. Many renowned companies such as Wells Fargo, Hurrah’s Entertainment, and IBM etc. Have sustained their business by investing in customer relationship management (CRM).
CRM model involves various technologies to synchronize various departments like operations, sales and marketing, human resources, R&D, finance, technical support and customer service team within an organization. Successful CRM implementations in any companies have resulted in customer loyalty and long term profitability and it requires an integrated and balanced approach to process, people and technology. CRM is an imperative part of the business process re-engineering which is customer- focused and requires cross functional and company-wide implementation.
Goldenberg (2000) conveys that CRM is not simply a technology applications for sales and marketing, customer service etc, but it is a customer driven, cross- functional, technology- integrated business process management strategy which builds relationships in the entire organization revived that it is implemented successfully. Customer relationship management (CRM) has emerged as a tool for many companies resulting in lower operational costs, higher revenues, increase in customer satisfaction (Chem. & Poppies, 2003).
With the help Of CRM applications, many organizations could gauge customers loyalty on the basis of money spent, long term business association and repeat purchases. As per Kangaroos (2000), customer gets an understanding that they are getting better customer service and they are valued by the companies. Page 1 Customer relationship management has emerged as one of the key equines strategy for an organization for delivering effective customer support.
Companies which are into customer focused business need to regularly update themselves with the new tools and applications, latest techniques and knowledge about effective customer service functions (Babe & Kumar, 2010). Good customer service has become the benchmark for all the companies, regardless of the industries that they belong to. Customer relationship management (CRM) evolves loyal customers which in turn get developed into a driver of profitability and growth.
The outcome of high customer loyalty could generate enormous competitive benefits; motivate employees, which in turn result in sudden increase in productivity and lower cost. There are several options for CRM application software which a company needs to consider for an effective CRM implementation. There are various software vendors like SAP, Clarify, Peoples, Oracle, Siebel and AS, who are competing amongst themselves to offer the best CRM applications, introduce enterprise resource planning systems (ERP) to the companies.
Evolution of CRM As per Chem. & Poppies (2003), in the mid-twentieth century, the definition of customer to a company was nothing more than a consumer who had a purchasing power. For a bank, customers were nothing more than just account numbers and then they did not even have the slightest idea as to what were those customer’s needs. However, with time understanding about the importance Of customers and relationships gradually changed as there were various options for the products and services in the market. Companies had to re- establish their associations with old and existing customers to enhance their long term customer loyalty.
Earlier to Industrial Revolution, here was very compatible relationship which was shared within sellers and buyers. There was a lot of personalization wherein customers were addressed by their names and there was lot of consideration which was given to their specific needs. With the mass production coming into the picture, that relationship faded as sellers tried concentrating in finding customers for standardized products. With time and help of technology, awareness of the customers grew and they became more equipped to look for options themselves.
Introduction of new and improved marketing strategies and genealogy- based customer relationship management (CRM) applications, are providing an edge to the competition in business. Customer relationship management is a concept which is not new however it is the most talked about in business because of the progression in the software technology. Christopher et al. (1 991 ) claim that CRM originated from relationship based marketing which focused at continuous profitability and customer retention through effective relationships instead of the transaction- based marketing which aimed only on getting new customers.
Chem. & Poppies (2003) added hat CRM is a very sophisticated and complex application which synchronizes all the customer’s data points and provides a complete picture of the loyal customers depending upon their purchasing patterns. CRM technology helps the company to identify and differentiate between right marketing efforts and best customers. Also, it assists in tracking and analyzing customer’s behavior that are frequent and loyal to Page 2 the company. This technique advances in obtaining a better perceptive of the existing customers who rest Its in effective communication and interactions to enhance retention efforts.
Kennedy & King (2004) remark that the old CRM methods consisted more of paper based systems or elementary computer based tracking systems where salesperson used to manage the information of the customer and existing relationships. In 1 990, customer relationship management was known as an information technology tool which was used to gather and share customer information. As a result, this relationship information is confined to the sales-person which at the first place should have been shared, views and conserved at an enterprise level in an organization.
There were high chances when these customers related information were not passed to the management in case the sales person moved on. This also resulted in duplicate investments by the company for a new salesperson who set up the new relationship intelligence. Overall, it was concluded that old methods had a short lifespan. CRM: A Business Strategy Caesar et al. (2008) describe customer relationship management as a business strategy when integrated with the company’s strategic plan supports the company to understand and interpret to all the business and economic trends.
It begins with an understanding of company’s customers which is included by gathering customer data and converting data for studying about the industries and markets with an intention to provide better customer service. A successful customer relationship management strategy demands a customer centric focus, collaborative organizational infrastructure and business processes. This strategy focuses on building and sustaining customer relationships aiming to meet the overall business objective.
For a successful CRM implementation, each and every department within an organization should be well versed with the concepts and there has to be jugular updates on customer information. A initiative would attain the strategic vision only in a condition when the same is supported by all and result in successful implementation which ensures consistent results like profitability and revenue generation. In today’s business world, many companies are going through tremendous changing trends resulting to outsourcing; downsizing, globalization and consolidation etc. Are realizing the need of an effective customer relationship management (CRM) system.
CRM is a strategic tool which is more than a software application used for tracking customer data and activities. Also, it is viewed as a tool which enables to determine new prospects, cross- selling opportunities, possible variance and conflicts and issues. There are various applications which have been developed to assist all the departments to develop their relationships with the customers. CRM strategy could help in determining better understanding of the customer’s need and relationships resulting in sustaining competitive returns in challenging and difficult times.
Also, CRM initiative should offer strategic decision support tools like identification of new customers, existing customers and offering new services. CRM strategy helps in identifying customer information and measures to develop a better business perspective. This strategy focuses on sharing of customer information customer satisfaction and its ability to convert the same to useful knowledge which could be used by the company. Page 3 The main objective of the CRM strategy is to have a better understanding and learning more about the customers views by all the departments of the company.
All customers’ information collected from each interaction, should be electronically stored and shared with all the employees in the company so hat each of them has the access to all the details. This is not as easy as it sounds as this would be difficult for companies with seasonal business, high numbers of customers and employees. Prior to accounting for CRM technology, company must determine the customer information which would be required by them and also need to identify usage of the customer related activities.
Ineffective implementation and inability to develop strategy is one of the basic reasons of failure of CRM implementation. Strove (2003) state that the customer relationship management strategy could result in erroneous competitive benefits if it is incorporated in a co-operative environment. This strategy could be used in various departments of business like accounts, operations and human resources. Understanding the need of business is one of the most crucial reasons which could lead to successful CRM implementation.
Along with that, identifying of different areas within the organization is also important. Gordon (2001 ) discussed various aspects of CRM business strategies. As per him, CRM is a continuous procedure where we identify and create new customers and focus on the advantages in the long run. It focuses on relationship, coordination and collaboration between organization and customers. Firstly, we need to distinguish the types of customers that an organization has and on the basis of the findings, we need to build relationship with the loyal customers.
Deriving and segregating the types of customers would require a lot of detailing and this act as the crucial strategic decision. The next step is to decide how to manage these categories of the customers. All the sections could not valued equally so we need to conclude what sections are of utmost importance and which sections require sees attention depending upon the returns provided to the business. With that we need to work and identify all the opportunities with respect to meeting the demands of the customers by providing a wide range of products and services.
In many of the famous companies, CRM strategies focus more the efficiency of the processes instead of effectiveness and a result they are unable to meet the expectations of customers. Once we identify the areas of opportunities, an organization need to concentrate on the strategic capabilities. Management of the organization should focus on deciding upon he constructive plan and process which aims towards providing results considering all aspects of availability of technology, skill and knowledge Of the employees.
In CRM, an organization focuses on continuous profitability and outcomes through valued customer, thus companies should be in a process of continuous innovation so that the objective is met. With that, there should be various measures which result in customer performance. There could be many situations when a company has to sell their goods and service in a lower price aiming at life long relationship with the loyal customers. CRM equines strategy helps organization and its people to focus on customers rather than their products and services. And for this, there are many relevant and meaning changes which are to be incorporated.
Lastly, CRM strategy helps in evolving new competition in the market for the organization. Page 4 CRM: outcomes Customer relationship management strategies have been developed in order to ensure and keep a check on the improvement of the performance and differentiate between the successes and shortcomings. Today, more companies are shifting to the CRM strategies with an objective to sustain and attain their loyal customers, increase profitability of the business, capability to create a high level of efficiency, customer service and satisfaction.
Friedman (2004) concluded the outcomes Of a successful customer relationship management system. A successful CRM set up could act as complete data ‘warehouse’ where it becomes easier for several departments to access customer or any important information. With that, it also enables employees to manage their business in a better way and provide better customer service. A CRM set up would enable in adhering compliance. The name could be achieved through recording all customers’ activities. There are various tasks like handling email records and correspondence, reporting an email etc. Loud be performed as well. With the advance CRM system office and client management capabilities were increased. The system provided with direct and meaningful insights about the customers which in turn helped the organization to know and understand the customers need in a better way. It also enhanced the marketing capabilities of a company to offer leading products and service which resulted in better customer relationships. Overall, good customer relationship management system assists in providing flexibility to the functioning of the business which requires changing with time.
Conclusion This report has presented the perspective Of the Customer Relationship Management (CRM) in majority of the organization across industries. In the modern business world, focus has shifted towards customer service as it has become the prime objective with an understanding to increase revenue and lower costs. It is a vital and an imperative approach for an organization to maximize long lasting relationships with the loyal customers. However, Customer Relationship Management should be perceived as a strategy rather than a solution.
