What is CRM (customer relationship management)?

Definition

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. For example, an enterprise might build a database about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased, and so forth.

CRM is the practice of intelligently finding, marketing to, selling to, and servicing customers. CRM is a broadly used term that covers concepts used by companies, NGO's and public institutions to manage their relationships with customers and stakeholders. Technologies that support this business purpose include the capture, storage and analysis of customer, vendor, partner, and internal process information. Functions that support this business purpose include Sales, Marketing and Customer Service, Training, Professional Development, Performance Management, Human Resource Development and Compensation.

Privacy and data security

One of the primary functions of CRM software is to collect information about customers. When gathering data as part of a CRM solution, a company must consider customer privacy and data security with respect to legal and cultural environments. Some customers prefer assurance that their data is not shared with third parties without their consent and that it cannot be illicitly accessed by third parties.

Customers can benefit from their data being utilised within a CRM system. For example, while an increase in unsolicited telemarketing calls is generally resented by customers, a small number of relevant offers may be appreciated. CRM software can enhance the collection and analysis of customer behaviour data, leading to more relevant communications with customers.

Aspects of CRM

There are three aspects of CRM which can each be implemented in isolation from each other:

• Operational - automation of customer processes that offers support to a company’s sales or service representative
• Collaborative - the program communicates to customers without a company’s sales or service representative (self service)
• Analytical - analysis of customer information for multiple purposes

According to one industry view, CRM consists of:

• Helping an enterprise to enable its marketing departments to identifyand target their best customers, manage marketing campaigns with clear goalsand objectives, and generate quality leads for the sales team.
• Assisting the organization to improve telesales, account, and salesmanagement by optimizing information shared by multiple employees, andstreamlining existing processes (for example, taking orders using mobile devices)
• Allowing the formation of individualized relationships withcustomers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service.
• Providing employees with the information and processes necessary toknow their customers, understand their needs, and effectively buildrelationships between the company, its customer base, and distribution partners.

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