CRM Customer relationship management In Its broadest sense simply means managing all customer Interactions. In practice, this requires using Information about your customers and prospects to more effectively Interact with your customers In all stages of your relationship with them. We refer to these stages as the customer life cycle. The customer life cycle has three stages: Acquiring customers Increasing the value of customers Retaining good customers It is a concept of understanding and tracking customer behavior and experiences to customize the offer that forms the basis of any CRM programmer in a large company.
CRM ties the potential of relationship marketing strategies and IT [information technology] to create profitable, long-term relationships with customers. Len order to endure long-term success, the role of marketing In a firm Is to contribute to bulling strong market assets, Including a valuable customer portfolio. Customer relationship management (CRM) helps companies Improve the profitability of their Interactions with customers, while at the same time; makes the Interactions appear friendlier through individualizing.
To succeed with CRM, companies need to match products and campaigns to prospects and customers – in other words, to intelligently manage the customer life cycle. CRM provides enhanced opportunities to use data and information to both understand customers and co-create value with them. This requires a cross-functional integration of processes, people, operations and marketing capabilities that is enabled through information, technology and applications. Customer relationships must be carefully managed and customer loyalty must be earned.
Today,customers are looking for suppliers who understand their needs and who can respond to those needs with relevant offers, using the communication channels the customer prefers. Alms of CRM The CRM Is a new technique In marketing where the marketer tries to develop long term relationship with the customers to develop them as life time customers. CRM aims to make the customer climb up the ladder of loyalty. The company first tries to determine who are likely prospects I. E. He people who have a strong potential interest in the product and ability to pay for it. The company hopes to convert many f its qualified prospect into first time customers and then to convert those first time customers into repeat customers. Then the company tries to convert these repeat customers into clients – they are those people who buy only from the company in the relevant product categories. The next challenge for the company is to convert these clients into advocates.
Advocates are those clients who praise the company and encourage others to buy from it. The ultimate challenge Is to convert these advocates into partners where the customers and the clients work actively together to discover says of getting mutual benefit. Thus In CRM the key performance figure Is not Just current market share but share of life time value by converting customers into account holders whose contribution to the company revenues is high (80%). So from this point of View, CRM also known as KEY ACCOUNT MANAGEMENT.
CRM impacts on the organization CRM can have a major impact on an organization through: shifting the focus from product to customer streamlining the offer to what the customer requires, not want the organization can make ; highlighting competencies required for an effective CRM process Business benefits of CRM Implementing a customer relationship management (CRM) solution might involve considerable time and expense. However, there are many potential benefits.
A major benefit can be the development of better relations with your existing customers, which can lead to: ; 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 re profitable and which are not This can lead to better marketing of your products or services by focusing on: ; effective targeted marketing communications aimed specifically at customer needs ; a more personal approach and the development of new or improved products and services in order to win more business in the future Ultimately this could lead to: enhanced customer satisfaction and retention, ensuring that your good reputation in the marketplace continues to grow ;increased value from your existing customers and reduced cost associated with supporting and servicing them, increasing your verbal efficiency and reducing total cost of sales ; improved profitability by focusing on the most profitable customers and dealing with the unprofitable in more cost effective ways Once the business starts to look after its existing customers effectively, efforts can be concentrated on finding new customers and expanding your market. The more you know about your customers, the easier it is to identify new prospects and increase your customer base. Even with years of accumulated knowledge, there’s always room for improvement.
Customer needs change over time, and technology an make it easier to find out more about customers and ensure that everyone in an organization can exploit this information. Why does the organization need CRM? The ultimate purpose of CRM, like any organizational initiative, is to increase profit. In the case of CRM this is achieved mainly by providing a better service to your customers than your competitors. CRM not only improves the service to customers though; a good CRM capability will also reduce costs, wastage, and complaints (although you may see some increase initially, simply because you hear about things hat without CRM would have stayed hidden).
Effective CRM also reduces staff stress, because attrition – a major cause of stress – reduces as services and relationships improve. CRM enables instant market research as well: opening the lines of communications with your customers gives you direct constant market reaction to CRM also helps you grow your business: customers stay with you longer; customer churn rates reduce; referrals to new customers increase from increasing numbers of satisfied customers; demand reduces on fire-fighting and trouble-shooting staff, and verbal the organization’s service flows and teams work more efficiently and more happily. Eight ways to keep customers for life Every part of the company’s marketing effort should be geared towards building lifetime relationships. People want to do business with friendly people. To have effective relations a friendly attitude must permeate in the organization. ; Information technology developments should be positively used to serve the customers. ; The company should always be flexible to bend its rules and procedures in the client’s favor. ; The company should communicate with its customers even when it is not trying to sell something. ; The company can communicate and develop stronger customer bonding by providing financial and social benefits. ; The company should try to know all its customers including their lifestyles, hobbies, likes and dislikes etc. The company should make it a point to deliver more than what is promised. Objectives of Customer Relationship Management To study the current practices of CRM. To find out the impact of CRM on the profitability of the organization. ; To study he factors affecting the CRM practices. To study the role of information technology in CRM. How to introduce CRM in the company There are four key steps for putting one to one marketing program to work – Step 1: Identify your customers To launch a one to one initiative the company must be able to locate and contact a fair number of customers or at least a significant portion of its valuable customers.
It is essential to know the customer details as much as possible, not Just their names or address, but their habits, preferences and so forth. Step 2: Differentiating your customers Customers are different in two principal ways; they represent different levels of value and have different needs. Once the company identifies its customers differentiating them will help the company to focus its efforts to gain the most advantage with the most valuable customers. Step 3: Interacting with the customer Interaction is also a crucial component of a successful CRM initiative. It is important customer interact in many different ways with many different areas of the organization so to foster relationship all the areas of the organization must be available to the customer.
Step 4: Customize your enterprise’s behavior Ultimately to lock a customer into a relationship a company must adapt some aspect of its behavior to meet customer’s individually expressed needs this might mean mass customizing a manufactured product or it might involve tailoring some aspect of the service surrounding the product. 12 principles for building profitable customer relationships ; Continuously learn about your customer- From this principle, everything else follows. When you know your customers, you can make sound business decisions about how to develop relationships with them. Interact personally with the customer – Relationship result from interaction. Knowing the customer is Just the first step.
Yet experience has shown that developing and implementing a CRM strategy is fraught with drawbacks and that many companies end up wasting scarce resources on projects that disappoint rather than delight customers. To steer your way through this minefield,you need support from an experienced partner who has clear understanding of the philosophies behind CRM and implementation of methodologies that succeed- as well as the CRM technologies that can be used. Customer relationship management is essential to compete effectively in today’s market- place. The more effectively you can use information about your customers to meet their needs, the more profitable you will be. The route to a successful business requires that you understand your customers and their requirements, with CRM application.
