CRM is a business approach
that integrates People, Processes and Technology to
maximize the relations of an organization with all
types of customers.
The true value of CRM is to transform strategy,
operational processes and business functions in order
to retain customers and increase customer loyalty and profitability.
Aris Pantazopoulos -
Founder, CRM Today |
Liz Shahnam, CRM analyst with the META Group, says CRM is
"a buzzword that's really not so new. What's new is the
technology is allowing us to do what we could do at the turn
of the century with the neighborhood grocer. He had few enough
customers and enough brainpower to keep track of everyone's
preferences.
Technology has allowed us to go back to the future to this
model." Properly understood, CRM is "a philosophy
that puts the customer at the design point, it's getting intimate
with the customer," in Shahnam's words.
|
The Peppers and Rogers Group surveyed
a number of business leaders from companies that are
at the forefront of CRM. One of the questions was "How
do you define CRM?"
Over half of the respondents (65 percent) said CRM
is moving a company from a product-centric focus to
a customer-centric one. Fifty-one percent felt CRM is
using IT tools to achieve incremental business improvements,
and 41 percent view CRM as making customer information
available to all customer contact personnel.
The survey question and its three answers raise a good
point: CRM is not all things to all people. It's many
different ways of arriving at the same goal: Reaching
the customer and generating long-term profit from that
relationship. |
CRM is a comprehensive approach which provides seamless integration
of every area of business that touches the customer - namely
marketing, sales, customer service and field support-through
the integration of people, process and technology, taking
advantage of the revolutionary impact of the Internet.
Customer relationship management (CRM) is a business strategy
that aims to understand, anticipate and manage the needs of
an organization's current and potential customers. It is a
journey of strategic, process, organizational and technical
change whereby a company seeks to better manage its own enterprise
around customer behaviors. It entails acquiring and deploying
knowledge about one's customers and using this information
across the various touch points to balance revenue and profits
with maximum customer satisfaction.
|
Rank |
Definition |
Implications |
| 1 |
"Customer
needs" |
Identifying and meeting customer
needs is seen as the primary goal of relationship marketing.
Despite this high ranking, customer needs tracking has
the lowest level of usage among measurement tools. |
| 2 |
"Partnership" |
Working in partnership with
suppliers and customers is the key focus, both in consumer
and business-to-business markets. |
| 3 |
"Increasing
profits" |
Maximising customer retention
and value, and so driving up profitability, is the goal.
This seems to reflect the popularity of the findings
propounded by Frederick Reichheld that increased retention
equals substantially increased profits. |
| 4 |
"Loyalty" |
Building loyalty with customers,
usually defined as maintaining repeat sales, is the
central role of relationship marketing. |
| 5 |
"Value" |
Managing and enhancing the
value to both customer and company within the relationship. |
| 6
|
"Satisfaction" |
The focus on satisfaction
received a relatively low level of mentions, yet this
is the most popular customer measure. |
(Source: Measuring
and valuing customer relationships,
Business Intelligence)
Dr Robert Shaw, Shaw Consulting and author of Measuring and
Valuing Customer Relationships.
The following definition
of CRM is intended to be both practical, in the sense of being
process-based, and actionable, in reflecting what goes on
in the real world. It also focuses on the business significance
of the activity.
"Customer relationship
management is an interactive process for achieving the optimum
balance between corporate investments and the satisfaction
of customer needs to generate the maximum profit. CRM involves:
 measuring
both inputs across all functions including marketing,
sales and service costs and outputs in terms of customer revenue,
profit and value.
acquiring
and continuously updating knowledge about customer needs,
motivation and behaviour over the lifetime of the relationship.
applying
customer knowledge to continuously improve
performance through a process of learning from successes and
failures.
integrating
the activities of marketing, sales and service to
achieve a common goal.
the
implementation of appropriate systems to support customer
knowledge
acquisition, sharing and the measurement of CRM effectiveness.
constantly
flexing the balance between marketing, sales and service inputs
against changing customer needs to maximize profits."
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by Document Type
Launched in May 2001, CRM Today has already achieved to become one of the largest business communities worldwide and one of the most successful in Europe.
