However, nowadays, companies segment customers and argue on specific segmentation which they want to attract. For this, companies started to sensitively analyses customers response, and maintain long-term relationship with them. This is called CRM (Customer Relationship Management). 1. 2 The Definition of CRM a. CRM(customer relationship management) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way (Technocrat) b.
Customer Relationship Management (CRM) is a strategy for managing all your company’s relationships and interactions with your customers and potential customers (Salesrooms) c. CRM is the name for any system or model used to manage a company’s interactions with its current or future clients or customers. (Consultancy) d. CRM A management philosophy according to which a company’s goals can be best achieved through identification and satisfaction of the customers’ needs and wants. A computerized system for identifying, targeting, acquiring and retaining the best mix of customers. (Objectifications) e.
CRM, an acronym for Customer Relationship Management, is an entire strategy related to the management of customers and contacts for your business. Goldmine) Customers can be clients, buyers, purchasers, or users of products/services. Relationships involve interactions with customers or prospects to understand requirements and provide value. Management aims at directing the organization towards customer-centric action. Why are there so many definitions of it? As we see, all these definitions are slightly conditions. All companies have different systems, consumers, and characteristics.
For example, they have completely different external factor. Their political, economic, social, technological analysis are different. Therefore, the way to manage companies and customers cannot be the same. Especially, the importance of CRM is increasing these days. Why do we need to do consumer relationship management and why is the importance of it increasing nowadays? 1. 3 The Necessity of CRM In these days, all companies face hard competition than ever before. Every day, new products hit the market and new technologies are developed. On the other hand, customers have many choices than ever before.
They can choose what they want among many companies and they want to satisfy their wants not Just buying the products that companies provide. In this situation, selling products is not enough for the companies’ future. Creating long-term relationship with customers and making customers one of the companies’ partners is really important for sustainable management. Therefore, it can be said that customer loyalty is the key asset for companies. Also, in terms of efficiency, customer loyalty is very important in these days. First, getting new customers is very hard and ineffective.
It costs 5 to 10 times more to attract new customers than retaining the existing ones. In addition, even if companies succeed to get new customers, they cannot be sure that new customers ill continue using their products or services. However, if a company has many loyal customers, they don’t need to be worry about that. Not only is it less expensive to retain a customer than to acquire a new one, loyal customers spend more and purchase more profitable products and services. It is already proved as ‘Praetor’s Law’. The longer the customer is loyal, the more profit the company gains.
Therefore, if companies care about not only long term growth and profits but efficiency, customer loyalty has to be a top priority. In light of these, considering customers’ needs and wants first and making business Lana for that is key to success, and CRM makes that dream come true. CRM helps a company to understand their customers and know what they want. Through this, companies can get closer relationships with customers and they can differentiate themselves from other competitors by providing superior service and offering a consistent, convenient customer experience.
Not only for customers, but also CRM is beneficial for companies’ internal control. First of all, in these days, the size of the company is getting bigger. Consequently, the quantity of information about their customers is also a lot more than the past. It became a huge challenge to companies because managing all those information is really hard and complicated. Also, it became hard to share the same information with all workers. CRM solves these kinds of problems. Using CRM system, company effectively manage their customers’ information and workers also can share lots of up-to-date information at the same time.
It allows workers to concentrate on their areas because workers can feel safe in information and they can be sure that they are fully aware of client’s needs. As a result, CRM can be defined as building co-relationship between customers and impasses by effective information management, but not only Just about the relationship between consumer and company, CRM is good strategy for making connection between co-workers. Therefore, CRM is the making connection between all the people who are related to the company’s business.. 2.
Critical analysis of CRM Customer relationship management or CRM is a system that lets companies interact with their customer in an efficient and well organized fashion. With this system, needs of customers are mastered by companies and they can as result respond to it. This understanding of customer behavior by companies leads to an increase of improvement of customer satisfaction. Customer relationship management requires serving customers at best with an application of technology to synchronize, automate and organize the actives trough out the departments (sales, marketing, customer service and technical support).
An efficient CRM system collects, manages and links the information collected on customers, including previous purchase data and preferences. All of the information on clients is accessible to all departments throughout the company. However, in spite of advantages of CRM, companies often fail to operate CRM. It causes big loss to the company instead of benefits. There are 4 reasons that cause the failure of CRM. 2. 1. 1 Lack of Focus, commitment, and communication. First of all, CRM can fail if there is a lack of focus within the company.
If departments, and the teams are not focuses on the goals and objectives of the company, CRM system will fail. In other word, if departments don’t have a clear trajectory that follows the path of the company strategy, CRM will fail. Focus is mandatory, and actions have to be understood by everyone. A lack of focus can lead to lack of commitment if it is rooted within the company. Lack of commitment comes from the idea that CRM system leads to a delegation of work between departments and teams within the company. A sales person can think that, because of CRM, a top manager delegates a part of his work to him to make his work easier.
Lack of commitment can lead to lack of training and communication between departments and teams. Lack of training is communication between teams and departments can lead to a lack of data or even worse, wrong data. A proper CRM should include feedbacks and suggestions from customers and users that automate processes to the extent possible but with a jack of training and communication that will result in the failing of the CRM system. In the end, proper ownership of data and reward system to insure appropriate data is essential. Frequent data reviewing is also imperative for a company to have clean and proper data.
There is also a demand integrated distinct data that hold legacy data, existing data will then enter evenly. There is a fundamental problem about CRM technology. CRM technology is not Just one. There are many CRM systems from different companies, such as MM, Inform, Hatchback (Vive, 2014). All these CRM have different style and purpose. Therefore, it’s really important to choose the right program for the company, not Just selecting any CRM program. The manager of CRM has to sensitively analyze the company’s characteristics and then choose the best one for the company.
For example, let’s compare two famous cosmetic brands, Kiel and Estes Lauder. These two brands are international and famous cosmetic brands, but, they have totally different characteristics and customer. Skill’s brand image is ‘Doctor’. They want to say We are the doctors for your skin to their customers’. In addition, the price of Skill’s product is not that expensive. Therefore, their main customers are quite young. On the other hand, Estes Lauder has totally different brand image and customers. First of all, Estes Ladder’s brand image is very elegant, and the price is very high.
Also, the famous products from Estes Lauder are focusing on anti-aging. Therefore, Estes Ladder’s customers, they are older than Skill’s and they want to get an elegant image by using Estes Ladder’s products. As we can see, these two companies have totally different characteristics and customers. Therefore, if they use the same program not considering their own features, or Just selecting any CRM program, they cannot make success in CRM project. 2. 1. 3 Lack of understanding 3 main factors of CRM However, even if the company choose the right CRM program, it doesn’t’ guarantee the success of CRM.
There is another serious cause of failure. One of the most common and biggest problems when implementing CRM is that people often think that CRM is the matter of the technology. It is right that technology is the key factor for CRM. However, CRM is not Just technology. CRM consists of 3 parts – people, process, and technology, and all three factors are important. Moreover, as Mr… Dominion said, CRM always starts with the people. Even if you use the high-end technology, if the workers cannot use that system properly, it will fail. However, many companies don’t realize about it first. Only after they failed, they realized their fault.
Also, there has to be a proper, advanced, and well-planned process for workers to use the CRM program effectively and successfully. As a result, considering CRM Just as a matter of technology can be a serious problem Moreover, it can be said that helping and educating workers to use new CRM system properly and making proper process for them are very important for success of implementing CRM. 2. 2 Future of CRM Nowadays, companies have more and more complicated processes and the daily orders from customers are increasing. The CRM is becoming more and more important for companies to make strategic decisions.
Therefore, five trends of CRM system are emerging. Big data common software can be used to deal with it. It has four characteristics like volume, velocity, variety and veracity. So to deal with this explosion of customer information, the company should use CRM to build an impeccable database and analyze the need of the customers. Only in this way, a long-term customer relationship will be built and company can make a long-term profit. E-business Because of the global interaction through the Internet and the low cost to share information via the Internet, more and more companies enter online selling.
The combination of E-business with CRM is important. When applying CRM to E-business, the company can gather information about the customers by online selling. Therefore, it can use the analytical CRM to make strategies like market segmentation, retain regular customers and gain potential customers. Social It is very common to see the social websites like twitter, link in, Google, Faceable and so on. In the near future, CRM will be totally put into use to the social media to gather elevate as well as directed information from the customers.
And this trend has an influence on customer satisfaction and customer loyalty. ERP (Enterprise Resource Planning) CRM using ERP is a technique for company to collect and manage data from business activities including costs of product planning, manufacturing delivery, marketing and so on (Wisped). After using ERP, the company should also apply CRM to gain information from customers. Therefore, company can have a clear mind of the information in the supply chain and make better strategies to lower costs as well as increase revenue. Mobile
It includes all the mobile devices. The mobile market is increasing and when CRM is put into use to the the mobile devices, it will gather more information. For example, when the CRM is used in some APS in the mobile phone, which is used daily by the owner, the relevant information will be easier to get. In addition, it helps to get more customer contact, which is beneficial for company to build a connected customer relationship. Mobile is the most visible media of individual desire. In mobile era, consumers grew out of group, show individualized consumption pattern.
A company and market are repairing for meeting with each specified individual instead of random people. Internet of things Faceable earned $885 million on mobile advertising sales share in the first quarter of this year (Swartz, 2014). It could be possible because of putting mobile consumers on priority and detailed targeting based on a service provided by Google and Faceable. This is not only for a big company. New era came that people who convey a message cannot help focusing on mobile either one-man business or a big company. To understand such the fast moving mobile era and customers’ consumption pattern,
Internet of things is not very different with previous CRM technology in providing customized service, but internet of things has more sources of information than mobile. Mobile devices are not only way to connect the internet anymore. Such buildings, cars, or chairs can be connected to the internet by using a tiny sensor which enables to communicate with each thing. Literally, everything will have the capacity of saving data. In a mobile age as exemplified by Faceable, CRM service was provided based on records from the users sharing their experience to each other.
However, in Internet f things era, a company enables to find consumers’ hidden desires through collecting precise information from various things closely associated with lifestyle and analyzing beyond contents recorded by people. Available customer information increase. In other words, consumers are offered their future needs as well as present needs even though they would not recognize yet. Instead of the existing ways such as recruiting experience group or getting feedback after selling, a company can plan new product or make long-term marketing strategies by using accurate information provided from internet of things.
In conclusion, the landscape of the market will change depending on how well internet of things is controlled. There is the old saying ‘nothing is complete unless you put it in final shape. Internet of things is useful tool in developing CRM System for sure. A company should fugue out how to extract the most important information in a huge number of data, analyze and reorganize to make new product be suitable to customer’s intimate desire. A company must prepare for unexpected accident as well. For example, leaking private information would be happened more as much as a company can access customers’ information easier.
Foremost, a company should understand how it works, then adapt for each company’s situation. If a company skip this process, internet of things cannot be used efficiently, and it causes a big loss. 3. 1 Case Summaries a. Case 1: The first case shows us that the unsuccessful application of an integrated CRM system in a middle-sized financial firm. Manikin Group Inc. , which consists of three divisions, is a subsidiary of a British financial conglomerate. It has used client database and software programs since the early asses, which lacked analytic functionality as well as collaborative interaction with other systems inside.
In order to hanged the situation, it wants to implement a new CRM program but because of budgetary constraints, it finally used low cost, off-the-shelf CRM and ran the old of chronology and poor user training after using the new CRM. Finally, Manikin failed. B. Case 2: The second case tells us a company wants to investigate the telecommunication market in Russia and an overview of CRM implementation in Russia of two telecommunication corporations. EMIR is a British financial conglomerate which would like to further expand its business and seek opportunities for its telecommunication division in the former Soviet Union.
However, the managers are afraid of the challenges to implement CRM in Russian firms so they consulted James Williams, a senior project advisor who was once the program manager at Mashes. Williams was given a report to analyze the opportunities and threats of applying CRM in Russia. Main points of the report: The report analyses the environment of telecommunication in Russia. Opportunity 1 Due to the collapse of the Soviet Union, a great transfer of government ownership to the private sector (Historic), promotes economic growth for foreign capital and investment in Russia.
Opportunity 2 In order to address the need of accelerating Russian CRM market, the CRM Association conducted CRM forum to assist organization with training and increase the awareness about CRM as well as sharing the best technologies and practices. Threats 1 There are different views of underlying business principles between foreign and Russian partners. The Russian market previously focused on consumer demand and therefore, ignored the consumer (Historic). Threats 2 CRM is a relatively new concept in Russia so the marketing practices cover only a narrow scope.
Examples of CRM Projects: While CRM practices and researches are in a small quantity in Russia, there are two cases in which the CRM application is successful. The two telecommunication providers: Swankiest (national) and Megaton-Moscow (regional). Swankiest, which is a Russian company, is one of the largest telecommunication holding companies in the world (Swankiest). In 2005, it applied the CRM billing modernization project which increases the competitive advantages by building the effective and efficient network infrastructure to provide customers with high-quality telecommunication and service.
Megaton-Moscow is one of the first Russian mobile operators in the GSM and one of the three responsible telecoms providers for the wireless network coverage he Madams CRM technology, which allowed the company to link call centers with its stores, and provide quickly and high-quality service to customer’s requests. 3. 2 Cases Analysis Analysis to both cases: Implementing CRM can be a risky decision. It is filled with uncertainty and change. Hidden obstacles lie around every corner. Implementing CRM is not Just a Job;it’s an adventure!
However, if you do the research about market and apply an appropriate CRM, the company will make profit in the long-term. Manikin went wrong choosing the wrong CRM which was not fit for its company’s situation and in the same time, it id not get people, process and technology (Chem.., l. J. , & Phobic, K. (2003)) mix right. The outcome of the implemented CRM at Manikin was entirely the opposite of what the managers expected to see, which resulted in employee confusion, wasted capital and lost time”.
EMIR has done research about the telecommunication environment in Russia and consult advisor in order to use CRM to penetrate in the Russian market. By analyzing the two examples of telecommunication industries running CRM successfully in Russia, the company has a clear mind in CRM. A. People People of CRM contain customers, users, suppliers. Manikin does not do well in user raining. The system was based on on-demand users to ensure employees completing training instead of helping them to know the system. Therefore, the users’ efficiency cannot be improved.
We can learn from the lesson that the company should have launched a full-mature communications program around CRM initiative, thus ensuring that key personnel and users were kept up to date on how the initiative works and how the initiative would impact their day-to day work lives. B. Process Process is a key step, which has to be put into place to ensure that such data is used effectively. In fact it is the processes that hold the whole things together. When a company implements a new CRM, it should examine if the system can function well in the company’s process. And then incrementally implement CRM to improve top targeted processes.
However, Manikin Just bought the relative low cost CRM system which was not fit well to its process. Therefore, a company should take time to review its customer-facing processes in detail, and make necessary corrections beforehand to implement its CRM initiative. C. Technology Technology is part of CRM. The main technology is about the database, which equates to the information that was previously stored ‘in the heads’ of Managers of businesses. It can help to analysis data in order to improve the quality of the product or service which helps to increasing the customer relationship.
The company should use proper database to deal with its daily order as well as functional data. However, because of lack of chronology, Manikin has lots of data such as sale volume, which is dealt with without a proper database and therefore, the user efficiency declines. Compared to Manikin, Swankiest and Megaton-Moscow have used the designed and proper database thus lower costs as well as building good customer relationship. In all, keeping up with technology and using the right CRM are essential or the development of a company.
In summary, to achieve CRM success, companies and technology component individuals, but also to proactively manage the integration of people, process and technology in the company. In addition, CRM can be used along with ERP (Enterprise Resource Planning) (Leon, A. (2008)) and SCM (Supply Chain Management) (Wantonness, H. H. , & Nicolai, S. (2002)). These three tools are viewed as the basic elements of E-business and have the same consequence of reducing inventory, speeding up the turnover of funds, improving the management level of enterprises and improve profits.
They work as an integrated technique to help company analyze the external and internal factors and then come up with the strategy to build consistent customer relationship and make profits. Assume you are James Williams developing a presentation on CRM in Russia for the board of directors of EMIR limited: 4. 1 Identify strategies for the CRM project implementation. First and foremost, a consultant was hired to help Manikin to implement the new CRM program, which is off-the-shelf product. He/she made system suited throughout the company because buying comprehensive custom systems costs a lot of money, ND Manikin could not afford.
The strategies for the CRM project implementation is as follows: Software requirements Vendor selection Budget Product timeshare Personnel involved User training 4. 2 Identify reasons contributing to the failure of the CRM implementation at Manikin. CRM system cannot simply described Just as an introduction of new technology for the information systems department. Certain ways should be served for improving its business process and transforming decision-making processes to be more efficient. There are 3 key elements for a successful managerial transforming: People, Process, ND Technology in order.
However, unfortunately, Manikin did not meet any requirements. Despite budgetary constraints, Manikin put efforts to adapt off-the- shelf product for use within the company. Manikin’s objectives were as below: to provide superior service to customers in additions to the benefit of the core product; to identify, focus on and retain key customers; to develop customer’s profiles; and to improve managerial decisions and workflow To succeed these goal, data organization should be structured well such as providing all linked data as a search result or following up references. Manikin transferred an
