CRM Basics


I found one great document on “CRM Basics” which clears basic doubts and concepts of CRM. I am very thankful to that Anonymous person who contributed his great effort and excelled his knowledge in this article. Thanks to Anonymous.

CRM Basics

What is CRM?

CRM, or Customer Relationship Management, can be defined as a software program, business strategy, or internet system that helps a business manage and organize its customer database. This includes contacting customers more efficiently, keeping leads hot, aiding in workplace effectiveness, and generally improving customer service and business relationships.

How Does CRM work?

Essentially, CRM works by allowing a representative or agent to access detailed customer information quickly and efficiently while the client is on the line. This means less hassle for the client and a quicker transaction.

For example, say a client contacts a company representative about possibly purchasing the company’s product. With CRM, the representative would be able to see if the client had bought anything previously, and if so, what their name is, their age, how long they’ve used the company, what products they’ve bought before, how often they buy the product, and much more. This would then allow the representative to suggest and recommend the product or service option that best suits the customer in a timely manner.

Who does CRM benefit?

The beauty of CRM is that is benefits both the customer and the business or service provider. Customers receive a higher level of customer service because their needs are met and anticipated, allowing them to relax through transactions that are often much quicker than they’re used to.

The business benefits via improved sales, higher customer confidence and satisfaction, and a more effective work environment. With CRM, a small business or large corporations can know what its customer wants; thus it can provide the service or product the client wants, keeping them as a repeat customer and gaining greater sales volumes.

What are some CRM applications?

CRM applications are created around the same idea as a spreadsheet, where values can be filled in and tabulated to quantify, analyze, and interpret data. A CRM application can both collect and analyze information simultaneously. This means faster, better applications and better ease of use. Clients can download, share or install these programs at their leisure via sites like Salesforce.com.

What is online CRM?

Online CRM is where a business uses an online system to manage its CRM. Straightforward and easy, online CRM is an option often taken by smaller businesses as it allows any representative to access a client’s information immediately, without hours of tedious training. A example of an online CRM system might be a 24-hour call center.

What is web based CRM?

Web based CRM is where a business uses real-time updates that are integrated with their existing CRM system. This allows new information to be accessed immediately without any time lapse. It is different from a software-based Customer Relationship Management program in that it allows for live, as-it-happens updates. Thus customer information is always fresh and current.

How do CRM systems help businesses?

CRM systems help businesses by improving customer service and relationships, generating quality leads, monitoring accounts more effectively, always keeping data fresh and ready so leads don�t grow cold, allowing mobile CRM (orders through a mobile device), and managing sales.

Why Breaking the Rules will be the Next Lesson of CRM

“The Rules” is a controversial US book detailing how to ensnare a husband by employing a strict code of conduct. The premise of this self-help guide is that any woman can take control of her life as long as she follows a pre-determined strategy which includes such tactics as always letting the man pay and never being the one to telephone. Coincidentally, the guide provides an inadvertent object lesson for businesses struggling to achieve CRM.

Though very successful in terms of sales and an entertaining read, it’s less clear how effective ‘The Rules’ is at generating marriages–or more critically how many of those unions manage to last the course! However, the whole approach does provide a perfect illustration of the mistake many companies make when trying to develop a relationship with their customers.

Appealing as it sounds to be able to apply a formula which will work every time, we all know that human beings–whether they be customers or potential husbands– behave in diverse and individual ways. My bet would be that for every man who plays by The Rules there are dozens of others whose reactions and behavior just don’t fit the mold. And this failure to recognize individuals is one reason why CRM has yet to deliver its full promise. Rather than providing guidance and empowering people in the frontline–those actually facing the customer–they generate constraints and offer edicts. So what pitfalls are there for the unsuspecting marketer? And how can companies escape them?

The main principle behind CRM is that customers can be segmented and then each group treated accordingly. But as people increasingly create and live by their own identities, it seems harder than ever to put people in “boxes”–or to predict their responses or future actions. So most CRM programs stereotype consumers while still hoping to deliver highly tailored communications. In short, the customer has been left out of the entire process. Many companies might argue that at least some attempt at CRM is better than none at all. However, get those segmented messages slightly wrong and the chances of them causing offense are huge. When we watch a TV ad or read a poster, we accept that it is targeted at everyone–so if it’s not relevant to the viewer or reader, it can be overlooked or ignored. The problem with segmented messages is that they are dressed up as being for specific individuals and therefore invite a more critical response. By generalizing what a customer might be like, and using this insight to drive creative, a company takes the risk that many individuals within that segment may not be anything like the average.

The main reason for this situation is that segmentation is decided by hard data parameters, and although these can be diverse they all have an inbuilt flaw when it comes to CRM programs. For instance, it is very common to use a propensity model and group customers together by internally-driven measures, such as value, or risk of switching. While useful indicators for a company tracking its sales, it is unfortunately one step removed from the customer and so communications tend to have little relation to some recipients’ attitudes or values.

Another mistake is to use key discriminators to cluster people into groups of like-minded consumers. This falls down in practice since we are living in an era when traditional discriminators have limited ability to inform about attitude, and are in any case becoming less and less relevant. At the same time, we are living in an increasingly heterogeneous society. Class is a good example of the interaction of these two trends. As Tony Blair suggests, “we’re all middle England now”–but it’s not a bland, uniformly colorless place. Rather, it is an England of individually chosen identities, where people live increasingly pick & mix lifestyles.

Changing attitudes to age and family create further challenges since lifestages no longer occur at such predictable intervals. Though some products and purchases are age-related, in many areas we are no longer “acting our age,” but instead decide what activities we want to do, when we want to do them, unconstrained by social dictums. The average age of marriage and having a first child have both increased and now there is also a much broader spectrum–a first time mom could be twenty years old, but she could also be in her fifties! Similarly, the standard married household of 2.2 kids, living in a duplex, has been replaced by a much more flexible view of what constitutes a family–embracing single households to multi-family occupancy and including all the steps in between. In fact, the so-called traditional nuclear family now represents significantly less than a third of all households in the UK!

The crux of all this is that segmentation, no matter how many ways in which it chooses to “slice and dice” customers, is not CRM. All it can do is prioritize segments, and give mass messaging a greater percentage chance of being relevant to the individual. The downside is that when those messages miss the mark they can do untold harm. It’s like going out to dinner with a potential suitor, and using the same approach and conversational gambits, regardless of the identity and personality of your date–not a great foundation for a sound relationship!

“The Rules” is a book which was conceived to catch a stereotype–a certain kind of person living in the mid-late twentieth century. But how many of these people really exist today? “The Rules” appear to need updating and arguably, the same applies to Customer Relationship Management. At present, CRM tries to convince consumers and marketers that it is “one to one,” but in fact all it does is put people into segmented boxes. Recognizing customers as individuals is an easy theory, but is actually much harder to achieve in practice. CRM programs which are there to facilitate and empower the relationship have perversely often ended up damaging it. So in an era where age, gender, and other drivers of motivations and behavior have changed, the premise of CRM has to as well; we can no longer successfully segment in the old way.

The answer to this problem is not to abandon CRM altogether–since the basic theory is sound–but to develop CRM programs so that they can embrace soft data. What is needed now is an approach that generates far more customer insight than at present and is less reliant on fixed formulas. Better systems will help, but these will not be enough. Inevitably, there will need to be more empowerment and responsibility to the frontline, and more empathy with the consumer through the collection and interpretation of soft data. The final result will be better customer relationships and the dawn of the next generation of CRM strategies. The key fault of existing segmentation techniques is that they assume the end-recipient will always be reactive to the selected communications strategy, and that those reactions can be anticipated. However, real customers are individuals who can also act in unexpected, proactive and spontaneous ways. In fact the marketplace is actively training them to behave in this way through media such as the internet and interactive TV. It is therefore no surprise that hard data is struggling to cope. Computers can crunch numbers, but only a brand specialist can cope with soft inputs and channel them back into a CRM strategy.

Bringing hard and soft data together, with no brick walls between disciplines, enables an organization to create sharper consumer insight, better strategy and tangible results for clients. This is not an easy fusion: the skill sets required for both are so different that an eclectic group of people is needed to deliver them. Once the right team is in place, companies then have the challenge of identifying how best to gather and use this soft/hard information. Again, a holistic approach makes sense–merging a sound methodology for the generation of “hard data” with a more creative approach to collection of softer insights. For example, companies can continue to interrogate transactional data in a planned manner and support this with qualitative research. Insights can also be added from inbound, unplanned, customer contacts where each incoming call represents an opportunity to ask one or two attitudinal questions. From these small beginnings, a company can build up a good understanding of that consumer, in an open, non-invasive manner. Given the number of times companies may have contact with their customers, this could quickly build up into a detailed picture. Furthermore, it’s a dynamic approach which recognizes that people change over time.

In the future, businesses which are able to operate in this way and temper hard data with the insight drawn from “soft” consumer information will be guaranteed to reap significant rewards. They will be able to build CRM systems which can effectively empower the front line, and as a consequence they will finally start delivering the results that have been promised for so long. Similarly, men and women will discard “the rules,” and start to treat prospective partners as real people. Love, happiness and prosperity will abound! Or then again, maybe I’m just a hopeless romantic!

Providing answers to these questions is the focus of this article.

1. What is Account Management?

Account management is a synonym for ACCOUNT PENETRATION. Just because you have sold one product or service to one business entity within an organization doesn’t mean your job is done. Think of all the additional opportunities that may exist in the account! For example:

Does your company offer additional products or services that might be a “fit” for this customer?

How many other business units, departments, divisions, and subsidiaries are potential prospects for your company’s products and services?

2. Required Skills and Talents

A critical talent for successful account management is the ability to build RELATIONSHIPS, as relationship selling is a very effective way to increase account penetration. Another critical skill/talent is ORGANIZATION. If you are going to manage large accounts effectively, you need to be willing and able to keep meticulous records.

What kinds of records do you need to keep? Picture a three-dimensional spreadsheet in your mind. In the left-hand column is a list of every product and service that you could possibly sell to a customer. Across the top of the spreadsheet are all of the business units, departments, divisions, and other business entities that make up your account’s entire organization. Behind each business entity is every contact you know within that business entity.

3. Required Activities

Hopefully your organization has some type of CRM (Client Relationship Management) software application to help you keep track of your answers to these questions. If you don’t have access to a corporate CRM system, here are some other options:<P*< b purchase GoldMine< or ACT! like package software a can You><P*< like can You target=”new” href=”http://salesforce.com&#8221; salesforce.com<P*< or a can You program

Next, plan your tactics for increasing account penetration by considering the following questions:<P*< account business you the and products in Who contacts of What or can to account?

Who can REFER you to new contacts in other business units, departments, or divisions in the account?

Why is it necessary to repetitively expose your contacts to your company’s entire portfolio of products and services? Because they forget! I can tell you from personal experience that there is nothing more frustrating than finding out a customer has placed a large order with another salesperson…and the only reason they didn’t give YOU the order was because they didn’t know or remember that you could fill it!

Is There More to Account Management?

There can be, but activities focused on increasing account penetration make up the critical core. Account management does become more complex if a team of people is managing a regional, national, or global account, but most of the complexity pertains to coordinating the activities of the team members.

Don’t make account management more complex than it needs to be! The basic goal is to maximize account penetration. Look for opportunities to sell every product and service in your portfolio to every business entity in the account. Make maximum use of referrals and testimonials to help you initiate new relationships. Regularly remind all of your contacts of the full breadth of your portfolio of products and services. Be organized and keep meticulous records. If you do these things, you should be amply rewarded for your efforts!

Why Use Contact Management Software?

As an Entrepreneur or small business owner, contact management software enables you to succeed by effectively managing your time, customers, and sales. As an entrepreneur, building a strong customer base is critical to the success of your venture, and as you add staff and more customers, effective management of those customers will determine your long-term success.

Contact management software enables you to manage all customer and prospect communications and interactions from one centralized hub – for an entrepreneur or small group of staff in an office or on mobile devices. Maximizer CRM Entrepreneur Edition contact management software includes many of the features of CRM software, such as sales opportunity management, communication, scheduling, reporting, and document management, but does not include marketing campaign management, customer service & support modules, and some other advanced capabilities.

It provides a strong foundation for your business to build on and allows you to get up and running quickly with minimal resources. As your business grows, Maximizer will help you choose the best solution to meet the specific needs of your business.

If you are interested in managing email campaigns and customer service & support cases, in addition to managing your contacts, learn more about our other Maximizer CRM editions.

Why Use CRM Software?

In today’s competitive business landscape, small and medium-sized businesses need the most efficient and effective way to market to, sell to, and service clients. CRM, or customer relationship management, consists of the business processes and software that enable collaboration, performance improvement, and better business visibility across all customer touch points. If customer relationships are an important asset to your business, then effective CRM strategies and software are key. Read more about CRM, or customer relationship management.

Challenges of a Customer-Centric Business Strategy

Companies are beginning to understand that retaining customers over the long term is key to profitability. While much has been written on the values of such customer-centric or relationship marketing efforts, less attention has been given to its implementation – especially the key role that the information technology (IT) organization plays in its eventual success.

The reason for a customer-centric business strategy is strengthening and deepening customer relationships and increasing loyalty. To accomplish this, an organization must truly understand its existing customer base, paying attention to the customers’ needs and recording their interactions with the organization. The marketing model shifts from mass marketing to one-to-one marketing where the classic market segments become, theoretically, a one- person segment.

The growth of the customer-centric business strategy has led to an increasing emphasis on finding the overall profitability by customer and calculating a customer lifetime value. The analytics required to support such a strategy have required databases designed to enable querying of data across the various customer interactions with the company. This is a change from the classic approach of designing databases for efficient querying of account/relationship information about the customer. Such account-centric databases fall short when one has to find out about all of the interactions the customer has had with the company.

To understand the IT implications of implementing a customer-centric business strategy, one must also understand the organization’s broader business challenges. Consider these challenges faced by a diversified financial services firm as it implemented a customer relationship marketing program.

Challenge #1: Who Wants What?

Identifying the various stakeholders involved in the successful execution of the strategy is the first challenge faced on the road to making the strategy successful. Equally challenging is understanding each stakeholder’s role.

In the corporate organization, senior executives, such as the CEO and board of directors, are typically seeking a solution to a market problem. For example, “We have a customer base that’s highly likely to default. We need to reduce this risk.”

Then there are the individual operational business unit managers, who have different perspectives of the problem than senior management. A problem for one group may not impact another. For instance, a retail-lending unit could be affected more by the corporate problem than the insurance unit because of their different business models and differing target customer segments.

Finally, the IT organization is typically structured to serve the operational business units. As such, it is so focused on providing day-to-day solutions that it lacks the resources to implement the corporate vision.

These groups represent just some of the stakeholders in the customer-centric business strategy. It is important to note that each group has differing incentives for solving the same fundamental business problem.

Challenge #2: Explain It to Me Again

The second challenge faced is the effective communication between these stakeholders. By the time the corporate vision is passed down through the operational business units to the IT organization, the message might be totally lost – or worse, misinterpreted. As a further complication, the larger the organization grows, the more difficult it becomes for the business units to arrive at a consensus on how to translate the vision into action.

Even if operational or functional consensus is reached, the IT organization might find it extremely difficult to translate this to technical specs. In our example of a financial services firm, it would be simple to say that the customer payment defaults should be reduced. But what does this directive mean to the IT organization? The more time business units affected by the corporate directive take to clarify the problem to IT, the better the IT solution will match the customer-centric vision of the organization.

Challenge #3: Conventions, Consistency and Consolidation

Data architecture is the way of organizing data so that it can be converted into information by simply asking the right questions. Defining a consistent data architecture strategy is an important challenge faced by the IT organization, and it must be built upon a clear vision of the strategy (Challenge #1) and a clearly communicated operational objective (Challenge #2).

As the IT organization creates the data architecture to support the passed-down functional specifications, it is typical to see the same data elements existing in the silos of the operational business units. These diverse elements might not be easy to consolidate, as they could have been used in a different ways in the different business units. For example, the common data element homeowner code could be used inconsistently – an “O/R” in one business unit and a “0/1” in another.

Even if IT can access and consolidate this data, the duplication in the various business units would make it difficult to get toward one version the truth. Figuring out the sourcing of data could further lead to a debate on how to store it. “Do I use the star schema data model or relational data model or something else?” Furthermore, decisions must be made on presenting the data to the users. “Do I use custom-built applications or off-the-shelf tools? Do I Web enable the reports or not?”

The hurdles that have to be overcome in implementing a customer-centric business strategy extend far beyond IT. However, the IT organization can take the lead role ensuring the success of such a strategy – overcoming challenges, reducing implementation times and preventing organizational frustrations.

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