What is CRM – Customer Relationship Management?

The definition of CRM

CRM stands for Customer Relationship Management.

In general, 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.

The purpose of CRM

CRM software systems are a part of the big picture – the whole Customer Relationship Management process, and are designed to compile information on customers across different channels or points of contact between the customer and the company and, normally, make some critical procedures easier to perform. The following functions make the set of what CRM software system usually is supposed to do:

  • accumulation of the customer DB itself – centralized or decentralized but the data must have integrity for data mining processes
  • process implementation – registration, selling, marketing and others
  • statistics and visualization – every company wants to see these
  • customer specific decision making – how one or the other should be treated, what should be offered in each case. It depends on the history of each customer

Why would our company need a CRM software at all?

First, let’s see to which category your organization belongs to. We can glance at the differences from “Customer Centric versus Customer Driven” perspective. Both sound great but they make huge difference when it comes to Customer Relationship Management processes and approaches.

Customer centric organizations

Customer centric organizations are externally focused.  They know what their clients need, they understand their clients’ challenges, and they seek to provide value.

In this case, A CRM system can be a great tool to automate your daily routine. Gathering data about your customers, registering purchases, issuing invoices, making sure the customer pay their bills, and so on. For customer-centric organizations it is also possible to use several distinct tools for performing each process separately, however, most likely you will struggle with data migration between those tools and all of that will take your precious time.

For example, you are gathering all the customer data in some spreadsheet but when you have to issue an invoice, you use some 3rd party tool, which is great but you need to copy the information from the spreadsheet into the tool to set receiver details, and you have to add invoice positions manually by looking at your (yet another) register where you gather information about services you have provided to the customer. More or less, it will be a manual work.

If these processes are implemented in a CRM software, then you have a single system which can automate the invoice creation based on up-to-date customer information and the service history. Even more – you can always extend the CRM by adding new crucial features to it, like creating a dedicated member zone for your customers, where they can update their legal information and see the order history.

Customer driven organizations

Customer driven organizations are typically those in which a small number of clients represent a disproportionately large percentage of overall revenue.  When the client makes demands, the serving organization mobilizes – often without first thinking it through.  When large clients are unhappy, the customer driven company sounds the alarm and creates activity.

And if your company wants to be more successful and implement customer-driven approach, then in this thise case CRM software plays even more significant role.

Why? Simple – it is easy for the system to remember details and history of each customer and make the right decision, based on some general rules. For a human being it is relatively harder to accumulate all the information in the head, to process it and then make the decision, based on historical facts.

One of good example would be scenario based email marketing campaigns. For you, as a human being, it would be barely possible to prepare personalized emails for different cases based on what customer has done or hasn’t done before. A custom built CRM system, however, can easily take a look at what has happened before with each customer and decide which email should be sent and when exactly it should be sent.

You can also make the system recognize your customer when they make calls to your support center, and by doing that the system can quickly display the relevant information about the customer on the screen, even before you pick up the phone. This way you already know what you are dealing with and how this customer prefers to be served.

Aftermath

In either case, a CRM software can give a great positive impact on automating your processes by giving your organization an opportunity to:

  • provide better service
  • make less mistakes
  • grow, by serving more customers
  • become more popular and modern

KOTIQ has a decent expertise and experience in building CRM systems and relevant tools for CRM systems, therefore if you find out it wouldb useful to start using one in your case, do not hesitate to contact us for help!

See our projects of this area: