Discuss the meaning and importance of customer relationship management

What is CRM and why is it important to my business?

discuss the meaning and importance of customer relationship management

Customer relationship management (CRM) is important in running a Using data mining tools in spreadsheet programs, which analyse data to identify down into manageable pieces by setting up pilot programs and short-term milestones. In a world where competition is becoming ever fiercer, businesses need to implement customer relationship management, or CRM, strategies. Customer-relationship management (CRM) is an approach to manage a company's interaction One important aspect of the CRM approach is the systems of CRM that compile data from a The concept of customer-relationship management started in the early s, when customer "What Is Contact Center CRM?".

Outsourced solutions Application service providers can provide web-based CRM solutions for your business. This approach is ideal if you need to implement a solution quickly and your company does not have the in-house skills necessary to tackle the job from scratch. It is also a good solution if you are already geared towards online e-commerce. Off-the-shelf solutions Several software companies offer CRM applications that integrate with existing packages.

Cut-down versions of such software may be suitable for smaller businesses. This approach is generally the cheapest option as you are investing in standard software components.

What is CRM?

The downside is that the software may not always do precisely what you want and you may have to trade off functionality for convenience and price.

The key to success is to be flexible without compromising too much. Custom software For the ultimate in tailored CRM solutions, consultants and software engineers will customise or create a CRM system and integrate it with your existing software. However, this can be expensive and time consuming. If you choose this option, make sure you carefully specify exactly what you want. This will usually be the most expensive option and costs will vary depending on what your software designer quotes.

Managed solutions A half-way house between custom and outsourced solutions, this involves renting a customised suite of CRM applications as a tailored package.

This can be cost effective but it may mean that you have to compromise in terms of functionality. How to implement CRM The implementation of a customer relationship management CRM solution is best treated as a six-stage process, moving from collecting information about your customers and processing it to using that information to improve your marketing and the customer experience. Stage 1 - Collecting information The priority should be to capture the information you need to identify your customers and categorise their behaviour.

Those businesses with a website and online customer service have an advantage as customers can enter and maintain their own details when they buy. Stage 2 - Storing information The most effective way to store and manage your customer information is in a relational database - a centralised customer database that will allow you to run all your systems from the same source, ensuring that everyone uses up-to-date information.

Stage 3 - Accessing information With information collected and stored centrally, the next stage is to make this information available to staff in the most useful format. Stage 4 - Analysing customer behaviour Using data mining tools in spreadsheet programs, which analyse data to identify patterns or relationships, you can begin to profile customers and develop sales strategies.

discuss the meaning and importance of customer relationship management

Stage 5 - Marketing more effectively Many businesses find that a small percentage of their customers generate a high percentage of their profits. Using CRM to gain a better understanding of your customers' needs, desires and self-perception, you can reward and target your most valuable customers.

Customer relationship management

Stage 6 - Enhancing the customer experience Just as a small group of customers are the most profitable, a small number of complaining customers often take up a disproportionate amount of staff time. If their problems can be identified and resolved quickly, your staff will have more time for other customers.

discuss the meaning and importance of customer relationship management

Potential drawbacks of CRM There are several reasons why implementing a customer relationship management CRM solution might not have the desired results. There could be a lack of commitment from people within the company to the implementation of a CRM solution.

Adapting to a customer-focused approach may require a cultural change. The developed bonding together with the people is considered as an effective way of driving business to come up with a new level of success.

discuss the meaning and importance of customer relationship management

In addition to this, CRM Customer Relationship Management links in both the personal and emotional aspects that make the relationship as a foundation of trust and loyalty of the customers. This becomes a strategy that many businesses considered as one of their top priority in everyday business operation. Why it is Important? Through building a good relation with them is a need that a business owner should always keep in mind.

Customer-relationship management

So for further view of why Customer Relationship Management is important here are the following ideas: CRM is consisted with historical views and analysis of the current and potential customers for everyday business transactions to be done. It helps in reducing hassles for customers as this help a business owner to effectively increase relationship and become credible for customers.

Improve customization of marketing: Meaning of customization of marketing is that, the firm or organization adapt and change its services or products based on presenting a different and unique product or services for each customer. With the purpose of ensuring that customer needs and requirements are met Customization is used by the organization. Companies can put investment in information from customers and then customize their products or services to maintain customer interests.

discuss the meaning and importance of customer relationship management

Multichannel integration shows the point of co creation of customer value in CRM. On the other hand, a company's skill to perform multichannel integration successfully, is heavily dependent on the organization's ability getting together customer information from all channels and incorporate it with other related information. CRM will let companies to interact with customers more frequently, by personalized message and communication way which can be produced rapidly and matched on a timely basis, and finally they can better understand their customers and therefore look forward to their needs.

Firms can make and improve products and services through the information from tracking e. The firm heavily invests in screening potential cardholders. They implement CRM by marketing the right products to the right customers.

Customer relationship management

The firm implemented personal greetings, collaborative filtering, and more for the customer. Consumer behaviourBiology and consumer behaviourand Buying decision Customer or consumer profiles are the essence of the data that is collected alongside core data name, address, company and processed through customer analytics methods, essentially a type of profiling.

A customer is abstracted to information that sums up consumption habits so far and projects them into the future so that they can be grouped for marketing and advertising purposes. One research study analyzed relationships between consumers in China, Germany, Spain, and the United States, with over brands in 11 industries including airlines, cars and media.

This information is valuable as it provides demographic, behavioral, and value-based customer segmentation. These types of relationships can be both positive and negative. Some customers view themselves as friends of the brands, while others as enemies, and some are mixed with a love-hate relationship with the brand. Some relationships are distant, intimate or anything in between. Companies can collect this information by using surveysinterviews, and more, with current customers.

For example, Frito-Lay conducted many ethnographic interviews with customers to try and understand the relationships they wanted with the companies and the brands. They found that most customers were adults who used the product to feel more playful.