Customer relationship management (CRM) is a term that
refers to practices, strategies and technologies that companies use to manage
and analyze customer interactions and data throughout the customer lifecycle,
with the goal of improving business relationships with customers, assisting in
customer retention and driving sales growth. CRM systems are designed to
compile information on customers across different channels -- or points of
contact between the customer and the company -- which could include the
company's website, telephone, live chat, direct mail, marketing materials and
social media. CRM systems can also give customer-facing staff detailed
information on customers' personal information, purchase history, buying preferences
and concerns
CRM software
CRM software consolidates customer information and
documents into a single CRM database so business users can more easily access
and manage it. The other main functions of this software include recording
various customer interactions (over email, phone calls, social media or other
channels, depending on system capabilities), automating various workflow processes such as
tasks, calendars and alerts, and giving managers the ability to track
performance and productivity based on information logged within the system.
Common features of CRM software include:
- Marketing
automation: CRM
tools with marketing automation capabilities can automate
repetitive tasks to enhance marketing efforts to customers at different
points in the lifecycle. For example, as sales prospects come into the
system, the system might automatically send them marketing materials,
typically via email or social media, with the goal of turning a sales lead
into a full-fledged customer.
- Sales
force automation: Also
known as sales force management, sales force
automation is
meant to prevent duplicate efforts between a salesperson and a customer. A
CRM system can help achieve this by automatically tracking all contact and
follow-ups between both sides.
- Contact
center automation: Designed to reduce tedious aspects of a contact
center agent's job, contact center automation might include
pre-recorded audio that assists in customer problem-solving and
information dissemination. Various software tools that integrate with the
agent's desktop tools can handle customer requests in order to cut down
the time of calls and simplify customer service processes.
- Geolocation
technology, or location-based services: Some CRM systems include technology that can
create geographic marketing campaigns based on customers' physical
locations, sometimes integrating with popular location-based GPS apps.
Geolocation technology can also be used as a networking or contact
management tool in order to find sales prospects based on location.
The CRM technology market
The four main vendors of CRM systems are Salesforce.com, Microsoft, SAP and Oracle. Other providers are popular among
small- to mid-market businesses, but these four tend to be the choice of large
corporations.
On-premises CRM puts the onus of administration,
control, security and maintenance of the database and information on the
company itself. With this approach the company purchases licenses up front
instead of buying yearly subscriptions. The software resides on the company's
own servers and the user assumes the cost of any upgrades and usually requires
a prolonged installation process to fully integrate a company's data. Companies
with complex CRM needs might benefit more from an on-premises deployment.
With cloud-based CRM -- also known as SaaS (software-as-a-service) or on-demand CRM -- data is
stored on an external, remote network that employees can access anytime,
anywhere there is an Internet connection, sometimes with a
third-party service provider overseeing installation and maintenance. The
cloud's quick, relatively easy deployment capabilities appeals to companies
with limited technological expertise or resources.
Companies might consider cloud-based CRM as a more
cost-effective option. Vendors such as Salesforce.com charge by the user on a
subscription basis and give the option of monthly or yearly payments.
Data security is a primary concern for companies using
a cloud-based system since the company doesn't physically control the storage
and maintenance of its data. If the cloud provider goes out of business or is
acquired by another company, a company's data can be compromised or lost.
Compatibility issues can also arise when data is initially migrated from a
company's previous system to the cloud. Finally, cost may be a concern, since
paying subscription fees for software can be more costly than on-premises-based
models.
Open source CRM programs make source code available to the public, allowing
companies to make alterations with no cost to the company employing it. Open
source CRM systems also allow the addition and customization of data links to
social media channels, assisting companies looking to improve social CRM practices. Vendors such as SugarCRM
are popular choices in the open source market.
Adoption of any of these CRM deployment methods
depends on a company's business needs, resources and goals, since each has
different costs associated with it.
Trends
Traditionally, data intake practices for CRM systems
have been the responsibility of sales and marketing departments as well as
contact center agents. Sales and marketing teams procure leads and update the
system with information throughout the customer lifecycle and contact centers
gather data and revise customer history records through service call and
technical support interactions.
The advent of social media and the proliferation of
mobile devices has caused CRM providers to upgrade their offerings to include
new features that cater to customers who use these technologies.
Social CRM refers to businesses engaging customers
directly through social media platforms such as Facebook, Twitter and LinkedIn. Social media presents an open forum for customers to
share experiences with a brand, whether they're airing grievances or promoting
products.
To add value to customer interactions on social media,
businesses use various tools that monitor social conversations, from specific
mentions of a brand to the frequency of keywords used, to determine their
target audience and which platforms they use. Other tools are designed to
analyze social media feedback and address customer queries and issues.
Companies are interested in capturing sentiments such as a customer's likelihood
of recommending their products and the customer's overall satisfaction in order
to develop marketing and service strategies. Companies try to integrate social
CRM data with other customer data obtained from sales or marketing departments
in order to get a single view of the customer.
Another way in which social CRM is adding value for
companies and customers is customer communities, where customers post reviews
of products and can engage with other customers to troubleshoot issues or
research products in real time. Customer communities can provide low-level
customer service for certain kinds of problems and reduce the number of contact
center calls. Customer communities can also benefit companies by providing new
product ideas or feedback without requiring companies to enlist feedback
groups.
Mobile CRM -- or the CRM applications built for
smartphones and tablets -- is becoming a must-have for sales representatives
and marketing professionals who want to access customer information and perform
tasks when they are not physically in their offices. Mobile CRM apps take
advantage of features that are unique to mobile devices, such as GPS and
voice-recognition capabilities, in order to better serve customers by giving
employees access to this information on the go.
CRM challenges
For all of the advancements in CRM technology,
without the proper management, a CRM system can become little more than a
glorified database where customer information is stored. Data sets need to be
connected, distributed and organized so that users can easily access the
information they need.
Companies also struggle to achieve a "single view
of the customer," where many different data sets can be seamlessly
accessed and organized in a single dashboard or interface to create one view of
a customer’s account and relevant information. Challenges arise when customer
data is siloed in several separate systems or when data is complicated by
duplicate or outdated information that slows down and hampers the business
process. These problems can lead to a decline in customer experience due to long wait times during phone
calls, improper handling of technical support cases and other issues.
Studies show that customers, particularly Millennials, are increasingly dissatisfied with
the contact center experience. They demand multiple avenues of communication
with a company and expect a seamless interaction across many different
channels, the most popular of which tend to be Web chat, mobile apps and social
media. The main challenge of a CRM system is delivering a cross-channel
customer experience that is consistent and reliable.
Social media, for example, has been touted as a more
efficient channel by which customers can reach companies and get problems
resolved or queries answered, rather than enduring the traditional method of
waiting in a phone queue or awaiting an email response. In some cases,
particularly in high-touch customer service scenarios , social platforms can
fall short for customer service.
Companies also continue to struggle to identify real
sales prospects with their data. New lead-generation technologies that combine
CRM data with third-party data from companies like Dunn & Bradstreet and
social streams have also been emerging to provide sales and marketing teams
with better sales prospects. These methods work best, however, when companies
spend time cleaning up their existing data to eliminate duplicate and
incomplete records before they supplement CRM data with external sources of
information.
