What is Customer Relationship Management ?

Customer Relationship Management refers to the methodologies and tools that help businesses manage customer relationships in an organized way.
Customer relationship management is a broadly recognized, widely-implemented strategy for managing a companys interactions with customers, clients and sales
prospects. It involves using technology to organize, automate, and synchronize business processesprincipally sales activities, but also those for marketing, customer
service, and technical support.

Purpose
The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. With
an effective CRM strategy, a business can increase revenues by:

providing services and products that are exactly what your customers want

offering better customer service

cross selling products more effectively

helping sales staff close deals faster

retaining existing customers and discovering new ones

make call centers more efficient

simplify marketing and sales processes.

Today the major business focus is towards endowing value addition to the sales cycle, and customer retention rather than constructing a new customer base which is
costlier and also an uncertain chase from business perspective. The basic philosophy behind CRM is that a company's relationship with the customer would be the
biggest asset in the long run.

Before implementing any Customer Relationship Management solution in the organization there are many Question's which need a comprehensive explanation from the
users' point of view

What is the added value preposition of the CRM to the organization?

What would be the environment under which the implementation would be done?

How would the synergies be reflecting in the processes of the company?

These are mere stencils of the holistic scenario prevalent right now, and are to a great extent a factor which harms the opportunities of long term survival for any CRM
vendor.

CUSTOMER RELATIONSHIP MANAGEMENT...A STEP BY STEP

APPROACH

by Adrian Payne
Published: 01 July 2002
CRM is a management approach that seeks to create, develop and enhance relationships with carefully targeted
customers. It should be viewed as a strategic set of activities that commences with a detailed review of an
organisation's strategy and concludes with an improvement in shareholder value. The notion that competitive
advantage stems from the creation of value for the customer and for the company is key to the success of CRM.
This demands that responsibility for value delivery is shared across functions and hierarchies. Because CRM is a
cross-functional activity a systematic approach is essential
1: The Strategy Development Process - Where are we and what do we want to achieve?
Who are the customers that we want and how should we segment them?
Most companies today recognise that their future depends on the strength of their business relationships, and
most crucially, their relationships with customers. Before turning immediately to a technology solution, managers
need to first consider CRM in the context of overall business strategy. CRM must actively reflect and reinforce the
wider goals of the business if it is to be successful. The strategy development process therefore demands a dual
focus on the organisation's business strategy and its customer strategy
2: The Value Creation Process - How should we create and deliver value for our customers?
How should we maximise the lifetime value of the customers we want?
The value creation process is concerned with transforming the outputs of the strategy development process into
programmes that both extract and deliver value. The value creation process consists of three key elements:
determining what value the company can provide to its customers; determining the value of the organisation
receives from its customers; and, by successfully managing this value exchange, maximising the life-time value
of desirable customer segments.
First Direct bank is a good example of an organisation that provides superior customer service and receives
strong revenue and profits from its key customer segments. It improves customer lifetime value through
successful cross-selling and up-selling and creating advocacy and recommendations amongst its very satisfied
customers.
3: The Multi-Channel Integration Process - What are the best ways for us to get to customers and for
customers to get to us? What does the perfect customer experience', deliverable at an affordable
cost, look like?
A great number of interactions occur between the customer and the organisation across different channels. The
multi-channel integration process should therefore start with the identification of the most appropriate channel
options for specific segments. These options fall into six main channel categories, ranging from the physical to
the virtual, as shown in the strategic framework. Some will be employed in combination to maximise commercial
exposure and return, for example, voice over IP' (voice over Internet protocol) integrates both telephony and the
Internet
4: The Information Management Process - How should we organise information on customers? How can
we replicate' the mind of the customer?
The information management process is concerned with the collection and collation of customer information from
all customer contact points; and the utilisation of this information to construct complete and current customer
profiles which can be used to enhance the quality of the customer experience. As companies grow and interact
with an increasing number of customers through an increasing diversity of channels, the need for a systematic
approach to organising and employing information becomes ever greater. The key material elements of the

information management process are the data repository and analytical tools; IT systems; and front office and
back office applications.
5: The Performance Assessment Process - How can we create increased profits and shareholder value?
How should we set standards,develop metrics, measure our results and improve our performance?
The performance assessment process ensures that the organisation''s strategic aims in terms of CRM are being
delivered to an appropriate and acceptable standard, and that a basis for future improvement is established.
Shareholder results provide a 'macro' view of the overall relationships that drive performance, while performance
monitoring gives a more detailed 'micro' view of metrics and key performance indicators.
To achieve the ultimate objective of CRM the delivery of shareholder results through an increase in
shareholder value the organisation must understand the four key drivers of shareholder results: building
employee value; building customer value; building shareholder value; and reducing costs.