Customer relationship management (CRM) helps businesses to gain an insight into the behavior of their customers and modify their business operations to ensure that customers are served in the best possible way. Which means CRM helps a business recognize the value of its customers and to capitalize on improved customer relations. The better you understand your customers, the more responsive you can be to their needs.
Customer relationship management (CRM) is important in running a successful business. The better the relationship, the easier it is to conduct business and generate revenue.
CRM can be achieved by:
- Finding out about your customers' purchasing habits, opinions and preferences.
- Profiling individuals and groups to market more effectively and increase sales.
- Changing the way you operate to improve customer service and marketing.
Benefits of better CRM:
- Increased sales through better timing due to anticipating needs based on historic trends.
- Identifying needs more effectively by understanding specific customer requirements.
- Cross-selling of other products by highlighting and suggesting alternatives or enhancements.
- Identifying which of your customers are profitable.
- Enhanced customer satisfaction and retention.
- Increased value from your existing customers and reduced cost associated with supporting and servicing them which will increase your overall efficiency and reduce total cost of sales.
- Improved profitability by focusing on the most profitable customers and dealing with the unprofitable in more cost effective ways.
Types of CRM solution:
- Outsourced solutions- This approach is ideal if you need to implement a solution quickly and your company does not have the in-house skills necessary to tackle the job from scratch. It is also a good solution if you are already geared towards online e-commerce.
- Off-the-shelf solutions- Several software companies offer CRM applications that integrate with existing packages. Cut-down versions of such software may be suitable for smaller businesses. This approach is generally the cheapest option as you are investing in standard software components.
- Custom software- For the ultimate in tailored CRM solutions, consultants and software engineers will customize or create a CRM system and integrate it with your existing software. If you choose this option you should make sure you carefully specify exactly what you want. This will usually be the most expensive option and costs will vary depending on what your software designer quotes.
- Managed solutions- A half-way house between custom and outsourced solutions, this involves renting a customized suite of CRM applications as a tailored package. This can be cost effective.
How to implement CRM
The implementation of a customer relationship management (CRM) solution is best treated as a six-stage process.
Stage 1 - Collecting information
The priority should be to capture the information you need to identify your customers and categories their behaviors. Those businesses with a website and online customer service have an advantage as customers can enter and maintain their own details when they buy.
Stage 2 - Storing information
The most effective way to store and manage your customer information is in a relational database - a centralized customer database that will allow you to run all your systems from the same source, ensuring that everyone uses up-to-date information.
Stage 3 - Accessing information
With information collected and stored centrally, the next stage is to make this information available to staff in the most useful format.
Stage 4 - Analyzing customer behaviors
Using data mining tools in spreadsheet programs, which analyze data to identify patterns or relationships, you can begin to profile customers and develop sales strategies.
Stage 5 - Marketing more effectively
Many businesses find that a small percentage of their customers generate a high percentage of their profits. Using CRM to gain a better understanding of your customers' needs, desires and self-perception, you can reward and target your most valuable customers.
Stage 6 - Enhancing the customer experience
Just as a small group of customers are the most profitable, a small number of complaining customers often take up a disproportionate amount of staff time. If their problems can be identified and resolved quickly.