Return on Investmen
This report is an attempt to explain the concept of CRM, its emergence, need , the benefits and the challenges faced by CRM. As Technology plays the most important part in implementation of CRM as it consumes 82% of the CRM budgeting. This report will be more focused on the various technological aspects of CRM and their impact on the business functionality. Limitations of the report CRM, as an emerging discipline, is in great need of theoretical assistance.
Guiding theories and models are in short supply in the report due to the fact that it is a new area for research and because of its relatively recent interchange with IT and information systems, which have been rapidly developing. The role and importance of CRM varies from industry to industry but this report covers the business as a whole and not industry specific. Background With the hyper growth in the production the markets were saturating and competition was getting fierce, businesses had to look for a different avenue to retain their customers and markets.
The market has changed to a buyer’s place from an earlier seller’s market making customer the main focus across businesses, in order to overcome these challenges businesses had to
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(Source: Galbreath, J. (1998) ‘Relationship management environments’, CreditWorld, November-December, pp. 14- CRM is defined as an all-embracing approach, which seamlessly integrates sales, customer service, marketing, field support and other functions that touch customers. When using this approach, by integrating people, process and technologies and leveraging the Internet, the relationships with all your customers including e-customers, distribution channel members, internal customers and suppliers are maximized.
Basically, CRM is a notion regarding how an organization can keep their most profitable customers and at the same time reduce the costs; increase the values of interaction to consequently maximize the profits. ‘CRM is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way. CRM involves the use of technology to gather information on customer wants and needs – information that is then used to tailor products for groups, or even individuals.
It is a great idea made possible by powerful technologies For example, an enterprise might build a database about its customers that described relationships in sufficient detail so that management, salespeople, people providing a 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 (Source: http://searchcrm. techtarget. com/sDefinition/0,,sid11_gci213567,00.
html) but as per Susan North, Director, Global Marketing Solutions, Fair Isaac Corp, CRM is not about just technology infact it has organizational implications and processes. It’s about how the business perceives and communicate with its customer. Technology is part of the solution, not the solution itself. (source: Target Marketing. Philadelphia: Nov 2003. Vol. 26, Iss. 11; pg. 53 Why is CRM Necessary? Sam Walton, the founder of Wal-Mart stores, once said: “In business there is only one boss – the customer.
And he can fire everybody in the company, from the chairman to down, simply by spending his money elsewhere. ” (Source: http://wehner. tamu. edu/mktg/faculty/gresham/Dr. G_ws/3 Today, whole of the business world follows the statement. A fundamental business shift is taking place-companies’ strong focus on products is shifting to an equally strong focus on customers and the business-customer relationship. Why the intense focus on customer relationship management, or CRM?
The simple (yet highly compelling reasons are short and long term profitability and sustainability, managing customer relationships effectively and efficiently, boosting customer satisfaction and retention rates to win and retain the most loyal and profitable customers. (Reichheld, 1996a, b; Jackson, 1994; Levine, 1993). (Source:Business Process Management Journal, Emerald Group, 2003 Volume: 9 Number: 5 Page: 672 — 688 Source: http://www. ucisa. ac. uk
Main objective of CRM is to identify, qualify, acquire, develop and retain increasingly loyal and profitable customers by delivering the right product or service, to the right customer, through the right channel, at the right time and the right cost. CRM integrates sales, marketing, service, enterprise resource planning and supply-chain management functions through business process automation, technology solutions, and information resources to maximize each customer contact. Organizations can be more successful if they concentrate on obtaining and maintaining a share of each customer rather than a share of the entire market.
CRM facilitates relationships among enterprises, their customers, business partners, suppliers, and employees (Galbreath, 1998). (Source: Galbreath, J. (1998) ‘Relationship management environments’, CreditWorld, November-December, pp. 14-21 There are many success stories in the business world based on the use and benefit of CRM. Ritz-Carlton, an upscale chain of hotels, records guest preferences during their stay and uses them to tailor the services that customers receive on their next visit at any other Ritz-Carlton in the world.
Requests for items such as hypoallergenic pillows and additional towels are recorded for future use so that personalized goods and services can be added for repeat customers. Mining customer data allowed Bank One to significantly reduce turnover among its most profitable small business customers by assigning dedicated account managers (Conlon, 1999). The service industry, however, is not the only industry to harness people, process, and technology to manage resilient customer relationships. Dell Computer Corporation exemplifies CRM success by combining IT with front and back office operations.
Every PC that Dell manufactures is already sold. From the Internet, Dell customers are able to configure their own system, from thousands of hardware and software combinations, with an easy-to-use ordering system that provides delivery dates as well as progress updates. Several companies are turning to CRM systems and strategies to gain a better and deeper understanding of their most profitable customers, their wants and needs, so they can better anticipate what customers wants. The goal is to instill greater customer loyalty. CRM plays an important role at every stage of the Customer Life Cycle.