A few decades back, entrepreneurs needed a capital, a business plan, a good product or service and a keen business sense to build a company from the ground up. Today, when putting up your own business, you still need all these, plus all the technological tools that you can use to reach out to your target market.
In this tech-obsessed world, your brand might as well not exist if you do not have a website. That’s the first thing that customers will check out upon hearing about your brand. When performing the daily tasks for your business, technological applications are also required to make things easier.
Thankfully, you can rely on technological solutions like CRM (Customer Relationship Management) to simplify business processes for you. But what actually is CRM, what is its background, benefits and how you can personalize it to benefit your business?
CRM: The Basics
CRM refers to Customer Relationship Management and it’s an area in a broader part of the software industry called Enterprise Resource Planning. CRM specifically refers to the processes and concepts adapted by entrepreneurs when providing service to customers. Some of the areas of CRM include data capture, data storage, and analysis of data. When a customer visits a website, for example, CRM enables the business owner to capture which pages the visitor is browsing, how much time is spent on the page, whether a link for buying is clicked, etc. Aside from sales, it’s the overall customer experience that is being analysed through CRM systems.
To give you more of an idea about CRM, here are a few more definitions of the term and what experts in the field have to say about it:
- According to Peppers and Rogers (1999), CRM is a technological solution which can be used as a tool for one-on-one customer communications. It’s the focus of sales, call centers and marketing departments of businesses whose goal is to improve targeting effort.
- According to Kotler (2000), when CRM is successfully implemented, it allows business firms to have a management strategy that maximizes customer relations. Over the years, CRM automation has evolved from being a tech-centric effort into a business value effort.
- According to Chen and Popovich (2003), CRM strategies leverage key functional areas to maximize the profitability of customer interactions. CRM systems allow business owners to customize, simplify and make more convenient the transactions being completed by the customer and the entrepreneur.
- According to Peppard (2000) and Bose (2002), more and more entrepreneurs are realizing the importance of CRM in helping them achieve a more competitive edge in the business.
From all these definitions, it is easy to say that the focus of CRM is to make it easy for entrepreneurs to develop a thriving, healthy and professional relationship with customers. Those who are able to deliver a stellar customer experience, along with a worth product or service, are most likely to lead the pack in the future.
What are the Benefits of using CRM?
After learning about the definition of CRM, let us take a quick look at its many benefits:
- An effective CRM system is more beneficial than old network technologies.
As compared to old network technologies, CRM applications can deliver customer data at a much smaller cost. Within an organization, CRM systems can accumulate, store, maintain and distribute customer knowledge more effectively. With an efficient CRM system, you can design products which are tailored to fit the needs of your customer. You can innovate service, consolidate the views of customers and even calculate customer lifetime value. Based on repeat purchases, how much is spent and longevity, a CRM system can help you evaluate customer loyalty and profitability. You can also find non-profitable customers that other companies have abandoned and turn them into profitable customers for your own company.
- An effective CRM system is cheaper to implement and boosts profitability.
If the end goal of CRM systems is to improve the total lifetime value of a customer and it is cheaper to implement than older technologies, it means that you will have a boost in profits as a result. With the help of an efficient CRM system, you can explore untapped customer potential; encourage existing customers to buy more products and stay loyal for a longer period of time; and communicate their needs effectively.
Summed up, here are the benefits of having an efficient CRM system:
- Lower cost of recruiting customers
- Lesser need to acquire more customers just so that a steady volume of business can be maintained
- Reduced cost to produce more sales
- Increased customer profitability, retention and loyalty
- Ability to evaluate customer profitability
How to Personalize CRM to Fit Your Business to a Tee
Research shows that as of 2004, almost 80% of content-rich IT applications will incorporate personalization. This includes browsing through news websites, e-retailers and corporate intranets. What does this mean for CRM systems? It equates to their being personalized as well.
To personalize your CRM system, one focus would be determining whether businesses can increase returns using an e-commerce strategy. Through case studies, it was determined that in order to achieve maximum benefits through CRM personalization, anticipating relevant intent of customers is required along with a ‘silo’ inter-functional approach. Aside from traditional entrepreneurs, B2B or business to business and B2C or business to consumers enterprises are enjoying the benefits of CRM personalization.
Finally, what kind of CRM software do business owners need in order to fully experience its benefits?
Due to the stiff competition in the business industry today, a CRM software which is enterprise-focused is what’s required. Aside from personalization, the system should also encompass all departments in the business. More than just customer service, the CRM system’s scope should extend to the following:
- Customer Service
- Human Resource
- Product Testing
CRM is essentially a complex application which gathers customer data, retrieved from all touch points, to allow an organization to have a complete view of the customers. The result? Firms can now determine the right type of customers to attract based on the trend of their future purchases.
When looking for a CRM software, make sure to ask about the CRM functions that the system can provide. Also check if it’s web-based, if it can handle the volume that you expect, if the firm can provide a published data model, what the average implementation time is, and whether they offer help upon implementation. It would also help if you have a CRM SME or Subject Matter Expert to make sure that the implementation of the system goes smoothly.
No matter which industry it is that your business is in, utilizing an efficient and cost-effective CRM system will allow you to reach out to your customers, improve your existing business processes and boost your profit all at the same time.
Gillespie, P., Buytendijk, F., (2014) Ten Best Practices for Privacy and Personalization in Digital Business. www.gartner.com. [online] available at: https://www.gartner.com/doc/2939723?ref=SiteSearch&sthkw=CRM%20personalisation&fnl=search&srcId=1-3478922254 [Accessed 10th April 2015]
Andrews , W .and Votsch , V. ( 2001 ) ‘ Two dimensions of personalization: Method and time ’ , Gartner
Jackson, T. (2007) Personalisation and CRM. Journal of Database Marketing & Customer Strategy Management, [online] 15, 24–36. Available at: http://www.palgrave-journals.com/dbm/journal/v15/n1/abs/3250065a.html
Bose, R. (2002) “Customer Relationship Management: Key Components for IT success”. Industrial Management and Data Systems, Vol. 102 No.2, pp89-97
Bull, C. (2003) Strategic issues in customer relationship management. Business Process Management Journal. Volume 9 No. 5 pp 592-602
Chin, C.Y., Ding, M. and Unnithan, C. (2003) Organizational Transformation through CRM Implementation: a descriptive case study. School on Information system – Deakin University
Chen, I. J. and Popovich, K. (2003) Understanding Customer Relationship Management (CRM): People, process and technology. Business Porcess management Journal, Vol. 9 No. 5 pp 672-688
Chou, C.D., Lin, B., Xu, Y. and Yen C.D., (2002) Adopting Customer relationship management technology. Journal Industrial management and data systems. Vol. 102, No.8, pp. 442-452
Frow, P. and Payne, A. (2004) The role of Multichannel Integration in customer relationship management. Journal of Industrial marketing management, vol.33 p. 527-538
Galbreath, J., Rogers, T., (1999) Customer Relationship Leadership. TQM Magazine, 11, 3, 161-71
Kotler, P., (2000) Marketing Management. Upper Saddle River, New Jersey – BOOK
Peppard, J., (2000) Customer relationship management (CRM) in financial services. European Management Journal, Vol.18, No. 3, pp.312-327 – INTEESTING ONE for iwoca
Peppers, D., Rogers, M., (1999) The One to One Manager: Real-World Lessons in Customer Relationship Management, Doubleday, New York, NY.
Swift, R., (2001) Accelerating Customer Relationship Using CRM and Relationship Technologies: New York, Prentice Hall Inc. ISBN 0-13-088084-9 (In Persson, P., 2002)
Zineldin, M., (2000) Total relationship management (TRM) and Total Quality Management (TQM). Managerial Auditing Journal, Vol. 15, No.1, pp. 0-28
Greenberg, P., (2004) CRM at the Speed of Light: Capturing and Keeping Customers in Internet Real Time, McGraw, Berkeley, CA.
Bacuvier, G. Peladeau, P., Trichet, A,. Zerbib, P,. (2001) Customers lifetime value: powerful insights into company’s business and activities. Available at: Barnes, J., 2004, Bristol Group Inc. www. Bristolgroup.ca