Definition of CRM:

Customer Relationship Management (CRM) is a comprehensive strategy and process

of acquiring, retaining and partnering with selective customers to create superior value and
strong relationship with customers.
A commonly cited definition of CRM is that of CRM (UK) Ltd (2002), as follows:
Customer Relationship Management is the establishment, development, maintenance and
optimization of long-term mutually valuable relationships between consumers and organizations
CRM is neither a product, nor service but a business strategy to learn
m o r e a b o u t customer behavior and requirements in order to create long term relation with
them. CRM involves use of technology in attracting new and profitable customers while
retaining the existing ones.

The purpose of CRM

The focus [of CRM] is on creating value for the customer and the company over the longer
term. When customers value the customer service that they receive from suppliers, they are less
likely to look to alternative suppliers for their needs. CRM enables organizations to gain
competitive advantage over competitors that supply similar products or services.
Needs / Objectives of CRM:
1. Enable the company to identify, attract and acquire new customers:
CRM allows the company to focus its limited marketing resources on the most promising target
markets with the highest value. This is usually done by using the information generated by CRM
application which:a) Automatically generates customer and market profiles
b) Identify and target market with high revenues
c) Generates, leads, tracks marketing campaigns across a variety of media
d) Selects appropriate contact media, plans promotions and incentives
e) Manages the proposal process through negotiations to close.
2. Obtains a better understanding of the customers- their wants and needs
C RM applications, often us ed in combination with, e-commerce
applications
and call centers, allow companies to gather and access information about cus tomers
bu ying behavior, w ants in terms of products or s ervices provided b y the
company.
3. Defines the appropriate product and service offering and match it to the unique needs of
the customer:

CRM provides customization and personalization capabilities that gives customers

the power to view the enterprise in a way that they can relate to, thereby making it easier
for them
to do
business
with
it.
4. Manages and optimizes companys sales cycle:
CRM solutions also include tools, which provide the ability to communicate important
information from supply chain modules to the customer interface in real time. These tools can
help in determining feasibility, profitability and delivery dates, while understanding
the constraints of the entire supply production and logistics chain across multiple
channels and enterprises.
5. Increases retention of existing customers through improved sales, service and
support:
CRM applications document all post close service and support related interaction with
customers, record customer requests and collect feedback from variety of communication
channels and use the information to anticipate the demand for s ervice and
technical assistance and maximize customer satisfaction and retention. The goal is to ensure
greater customer loyalty.
6. Identifies Cross selling and up selling opportunities:
CRM can help in identifying opportunities for cross selling and up selling of higher value added
services to the existing customers, based on their past purchasing behavior.