Customer relationship management (CRM) is a broadly recognized, widely-implemented strategy for managing and nurturing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management denotes a company-wide business strategy embracing all client-facing departments and even beyond. When an implementation is effective, people, processes, and technology work in synergy to increase profitability, and reduce operational costs.
These tools have been shown to help companies attain these objectives:
- Streamlined sales and marketing processes
- Higher sales productivity
- Added cross-selling and up-selling
- Improved service, loyalty, and retention
- Increased call center efficiency
- Higher close rates
- Better profiling and targeting
- Reduced expenses
- Increased market share
- Higher overall profitability
- Marginal costing
Many CRM vendors offer Web-based tools (cloud computing) and software as a service (SaaS), which are accessed via a secure Internet connection and displayed in a Web browser. These applications are sold as subscriptions, with customers not needing to invest in the acquisition and maintenance of IT hardware, and subscription fees are a fraction of the cost of purchasing software outright.
Phases of CRM
The three phases in which CRM can help to support the relationship between a business and its customers are, to:
- Acquire: a CRM can help a business in acquiring new customers through excellent contact management, direct marketing, selling and fulfillment.
- Enhance: a web-enabled CRM combined with customer service tools offers customers excellent service from a team of trained and skilled sales and service specialists, which offers customers the convenience of one-stop shopping.
- Retain: CRM software and databases enable a business to identify and reward its loyal customers and further develop its targeted marketing and relationship marketing initiatives.
Despite the benefits, many companies are still not fully leveraging these tools and services to align marketing, sales, and service to best serve the enterprise.
Tools and workflows can be complex to implement, especially for large enterprises. Previously these tools were generally limited to contact management: monitoring and recording interactions and communications. Software solutions then expanded to embrace deal tracking, territories, opportunities, and at the sales pipeline itself. Next came the advent of tools for other client-facing business functions, as described below. These technologies have been, and still are, offered as on-premises software that companies purchase and run on their own IT infrastructure.
Often, implementations are fragmented; isolated initiatives by individual departments to address their own needs. Systems that start disunited usually stay that way: siloed thinking and decision processes frequently lead to separate and incompatible systems, and dysfunctional processes.
Privacy and data security system
One of the primary functions of these tools is to collect information about clients, thus a company must consider the desire for privacy and data security, as well as the legislative and cultural norms. Some clients prefer assurances that their data will not be shared with third parties without their prior consent and that safeguards are in place to prevent illegal access by third parties.
This market grew by 12.5 percent in 2008, from revenue of $8.13 billion in 2007 to $9.15 billion in 2008. The following table lists the top vendors in 2006-2008 (figures in millions of US dollars) published in Gartner studies.
|Vendor||2008 Revenue||2008 Share (%)||2007 Revenue||2007 Share (%)||2006 Revenue||2006 Share (%)|
Notes and references
- ^ a b Gartner, Inc. (6 June 2009) What’s ‘Hot’ in CRM Applications in 2009
- ^ a b c DestinationCRM.com (2002) What Is CRM?
- ^ a b James A. O’Brien & George M. Marakas (2009). “Enterprise Business Systems, p.304.”. Management Information Systems. McGraw-Hill/Irwin..
- ^ James A. O’Brien & George M. Marakas (2009). “Enterprise Business Systems, p.305.”. Management Information Systems. McGraw-Hill/Irwin..
- ^ a b c d e f SAP white paper (2003) CRM Without Compromise
- ^ DestinationCRM.com (2009) CRM Market Grows for Fifth Straight Year
- ^ Gartner, Inc (2008-09-12). “Gartner Says Worldwide Customer Relationship Management Market Grew 23 Percent in 2007”. Press release.
- ^ Gartner, Inc (2009-06-15). “Gartner Says Worldwide CRM Market Grew 12.5 Percent in 2008”. Press release.