CRM: A Way of Thinking About Customers
Updated · May 04, 2001
Marketers have many ways to influence customers’ purchasing behavior and decisions. They start with advertising aimed at acquiring new customers and continue through sales and customer service that generate repeat orders. Until recently, it was normal for many of these functions to be performed by a company’s different departments, which did not act as a unified team.
Fortunately that old reliable — database technology — is helping bring these various marketing processes together, forming a unified approach to serving customers.
Customer relationship management (CRM) has become a popular name for a variety of tools and techniques aimed at attracting and retaining customers. In general, CRM employs a centralized database to store information that can be used throughout a company to serve customers.
Vendors like to think of CRM as a category of products that can be evaluated against each other. However, CRM shouldn’t be thought of as a technology or product. Instead marketers need to think of CRM as a process for managing the company’s resources to create the best possible experience and value for customers.
Combining the Old and the New
Although the term CRM is new, the idea has been around a long time.
Salespeople responsible for selling large-ticket items have always managed the customer relationship by monitoring their customers’ needs, product orders, shipments, and customer service. Often they’ve done so by making frantic calls to headquarters, demanding information stored in standalone systems.
Applying CRM principles brings customer data from throughout the company together in a central database, which creates technical efficiency. But more than that, CRM can bring employees together as a team to better serve customers.
CRM combines many of the traditional marketing techniques that have been used well by themselves, such as database marketing, sales force automation, telemarketing, Web personalization, and customer service operations.
Understanding the Parts of the Whole
Vendors of software tools used in these areas like to point out that their products are part of an overall CRM solution. These products should be evaluated against a company’s needs and requirements to identify the product — or combination of products — that best meets those needs.
The key is that a company understand its needs and requirements not just for the present but for the foreseeable future.
A planning committee must examine all customer interactions, sometimes called "touchpoints," to fully understand how customers view the company. The analysis should look at how to track customer interactions — from ad response through product delivery and follow-on service.
This information can then be used to map the process of how customers gather information about the product and make purchase decisions. In addition, this research and analysis should include learning what customers want regarding the purchase experience and delivered value.
After you understand what customers want from your company and what CRM process you need to provide it, it’s time to decide which technology solutions you need to support that process.
Deciding on the Approach
Some CRM software providers want to provide a complete, enterprise-wide system that replaces many of the tools and processes already in place. Other vendors want to provide just a piece of the CRM puzzle in what they call a best-of-breed approach.
Although one of these approaches may be right for your company, it may be that both are needed to keep the company functioning: one in the present, the other in the future.
For example, it may be best to connect your existing sales force automation system to an upgraded telemarketing system, then to upgrade your Web site to use personalization and other techniques to gather profile data. Many software vendors are using popular database systems, which means these various systems can be coordinated by connecting them to a centralized set of databases. Technical gurus may feel that this is not the most elegant solution. However, it does allow a company to develop prototype CRM solutions and begin to experience the benefits.
Based on that experience and the information gathered from the planning committee, a comprehensive plan can be developed for an enterprise-wide solution. The complete solution may call for replacing everything with a single-vendor product, or it might call for better integration of existing systems.
Either way, the solution is likely to be better than it would be without input from the planning team that evaluated the needs of the company and its customers.
Reprinted from australia.internet.