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Customer Relationship Management Systems


									           Customer relationship management (CRM)
Customer relationship management (CRM) is a term applied to processes implemented by a
company to handle its contact with its customers. CRM software is used to support these
processes, storing information on current and prospective customers. Information in the system
can be accessed and entered by employees in different departments, such as sales, marketing,
customer service, training, professional development, performance management, human resource
development, and compensation. Details on any customer contacts can also be stored in the system.
The rationale behind this approach is to improve services provided directly to customers and to
use the information in the system for targeted marketing and sales purposes.
While the term is generally used to refer to a software-based approach to handling customer
relationships, most CRM software vendors stress that a successful CRM strategy requires a
holistic approach. CRM initiatives often fail because implementation was limited to software
installation without providing the appropriate motivations for employees to learn, provide input,
and take full advantage of the information systems

It is a process or methodology used to learn more about customers' needs and behaviors in
order to develop stronger relationships with them. There are many technological
components to CRM, but thinking about CRM in primarily technological terms is a
mistake. The more useful way to think about CRM is as a process that will help bring
together lots of pieces of information about customers, sales, marketing effectiveness,
responsiveness and market trends.

CRM helps businesses use technology and human resources to gain insight into the
behavior of customers and the value of those customers.

Customer Relationship Management (CRM) is an information industry term for methodologies,
software, and usually Internet capabilities that help an enterprise manage customer relationships
in an organized and efficient manner. In many cases, an enterprise builds a database about its
customers. This database describes relationships in sufficient detail so that management,
salespeople, and customer service reps can access information; match customer needs with
product plans and offerings; remind customers of service requirements; know what other
products a customer had purchased; etc.
From the outside, customers interacting with a company perceive the business as a single entity,
despite often interacting with a variety of employees in different roles and departments. CRM is
a combination of policies, processes, and strategies implemented by a company that unify its
customer interaction and provides a mechanism for tracking customer information.
CRM includes many aspects which relate directly to one another:
 Front office operations — Direct interaction with customers, e.g. face to face meetings,
   phone calls, e-mail, online services etc.
 Back office operations — Operations that ultimately affect the activities of the front office
   (e.g., billing, maintenance, planning, marketing, advertising, finance, manufacturing, etc.)
 Business relationships — Interaction with other companies and partners, such as
  suppliers/vendors and retail outlets/distributors, industry networks (lobbying groups, trade
  associations). This external network supports front and back office activities.
 Analysis — Key CRM data can be analyzed in order to plan target-marketing campaigns,
  conceive business strategies, and judge the success of CRM activities (e.g., market share,
  number and types of customers, revenue, profitability, etc.).
CRM consists of:
 Helping an enterprise to enable its marketing departments to identify and target their best
  customers, manage marketing campaigns and generate quality leads for the sales team.
 Assisting the organization to improve telesales, account, and sales management by
  optimizing information shared by multiple employees, and streamlining existing processes
  (for example, taking orders using mobile devices)
 Allowing the formation of individualized relationships with customers, with the aim of
  improving customer satisfaction and maximizing profits; identifying the most profitable
  customers and providing them the highest level of service.
 Providing employees with the information and processes necessary to know their customers,
  understand and identify customer needs and effectively build relationships between the
  company, its customer base, and distribution partners.

Many organizations turn to CRM software to help them manage their customer relationships.
CRM technology is offered on-premise, on-demand or through Software as a Service (SaaS)
CRM, depending on the vendor. Recently, mobile CRM and the open source CRM software
model have also become more popular.

Types/Variations of CRM

There are several different approaches to CRM, with different software packages focusing on
different aspects. In general, Campaign Management and Sales Force Automation form the core
of the system (with SFA being the most popular[citation needed]).

Operational CRM

Operational CRM provides support to "front office" business processes, e.g. to sales, marketing
and service staff. Interactions with customers are generally stored in customers' contact
histories, and staff can retrieve customer information as necessary.
Operational CRM means supporting the so-called "front office" business processes, which
include customer contact (sales, marketing and service). Tasks resulting from these processes
are forwarded to employees responsible for them, as well as the information necessary for
carrying out the tasks and interfaces to back-end applications are being provided and activities
with customers are being documented for further reference.
The contact history provides staff members with immediate access to important information on
the customer (products owned, prior support calls etc.), eliminating the need to individually
obtain this information directly from the customer. Consequently, many call centers use some
form of CRM software.
Operational CRM processes customer data for a variety of purposes:
 'Managing Campaigns'
 Enterprise Marketing Automation
   Sales Force Automation

Sales Force Automation automates sales force-related activities such as:
 Tracking leads
 Scheduling sales calls or mailings
 Tracking responses
 Generating reports

Analytical CRM

Analytical CRM analyzes customer data for a variety of purposes:
 Designing and executing targeted marketing campaigns
 Designing and executing campaigns, e.g. customer acquisition, cross-selling, up-selling
 Analysing customer behavior in order to make decisions relating to products and services
   (e.g. pricing, product development)
 Management decisions (e.g. financial forecasting and customer profitability analysis)
In analytical CRM, data gathered within operational CRM are analyzed to segment customers
or to identify cross- and up-selling potential. Data collection and analysis is viewed as a
continuing and iterative process. Ideally, business decisions are refined over time, based on
feedback from earlier analysis and decisions. Business Intelligence offers some more
functionality as separate application software.
Analytical CRM generally makes heavy use of data mining.

Sales Intelligence CRM

Sales Intelligence CRM is similar to Analytical CRM, but is intended as a more direct sales
tool. Features include alerts sent to sales staff regarding:
 Cross-selling/Up-selling/Switch-selling opportunities
 Customer drift
 Sales performance
 Customer trends
 Customer margins

Campaign Management

Campaign management combines elements of Operational and Analytical CRM. Campaign
management functions include:
 Target groups formed from the client base according to selected criteria
 Sending campaign-related material (e.g. on special offers) to selected recipients using
  various channels (e.g. e-mail, telephone, post)

   Tracking, storing, and analyzing campaign statistics, including tracking responses and
    analyzing trends

Collaborative CRM

Collaborative CRM covers aspects of a company's dealings with customers that are handled by
various departments within a company, such as sales, technical support and marketing. Staff
members within the departments can share information collected when interacting with
customers. For example, feedback received by customer support agents can provide other staff
members with information on the services and features requested by customers. Collaborative
CRM's ultimate goal is to use information collected by all departments to improve the quality of
services provided by the company.
Collaborative CRM facilitates interactions with customers through all channels (personal, letter,
fax, phone, web, e-mail) and supports co-ordination of employee teams and channels. It is a
solution that brings people, processes and data together so companies can better serve and retain
their customers. The data/activities can be structured, unstructured, conversational, and/or
transactional in nature.
Collaborative CRM provides the following benefits:
 Enables efficient productive customer interactions across all communications channels.
 Enables web collaboration to reduce customer service costs.
 Integrates call centers enabling multi-channel personal customer interaction.
 Integrates view of the customer while interaction at the transaction level.

Geographic CRM

Geographic CRM (GCRM) combines geographic information system and traditional CRM.
Geographic data can be analysed to provide a snapshot of potential customers in a region or to
plan routes for customer visits.


Several commercial CRM software packages are available, and they vary in their approach to
CRM. However, as mentioned above, CRM is not just a technology but rather a comprehensive,
customer-centric approach to an organization's philosophy of dealing with its customers. This
includes policies and processes, front-of-house customer service, employee training, marketing,
systems and information management. Hence, it is important that any CRM implementation
considerations stretch beyond technology toward the broader organizational requirements.
The objectives of a CRM strategy must consider a company’s specific situation and its
customers' needs and expectations. Information gained through CRM initiatives can support the
development of marketing strategy by developing the organization's knowledge in areas such as
identifying customer segments, improving customer retention, improving product offerings (by
better understanding customer needs), and by identifying the organization's most profitable
CRM strategies can vary in size, complexity, and scope. Some companies consider a CRM
strategy only to focus on the management of a team of salespeople. However, other CRM
strategies can cover customer interaction across the entire organization. Many commercial
CRM software packages that are available provide features that serve the sales, marketing,
event management, project management, and finance industries.


While there are numerous reports of "failed" implementations of various types of CRM
projects,[4] these are often the result of unrealistic high expectations and exaggerated claims by
CRM vendors.

Many of these "failures" are also related to data quality and availability. Data cleaning is a
major issue. If a company's CRM strategy is to track life-cycle revenues, costs, margins, and
interactions between individual customers, this must be reflected in all business processes. Data
must be extracted from multiple sources (e.g., departmental/divisional databases such as sales,
manufacturing, supply chain, logistics, finance, service etc.), which requires an integrated,
comprehensive system in place with well-defined structures and high data quality. Data from
other systems can be transferred to CRM systems using appropriate interfaces.

A well specified system is of vital importance before starting any implementation, [citation needed]
as it can lead to a significant reduction in the time and cost of implementation, as well as
highlighting any unrealistic expectations.

Privacy and data security

One of the primary functions of CRM software is to collect information about customers. When
gathering data as part of a CRM solution, a company must consider the desire for customer
privacy and data security, as well as and legislative and cultural norms. Some customers prefer
assurances that their data will not be shared with third parties without their prior consent and
that safeguards are in place to prevent illegal access by third parties.

Market structure

The following table lists the top CRM software vendors in 2006-2007 (figures in millions of US
dollars) published in a Gartner study.

                                2007      Share 2006            2006     Share '06-'07      Growth
Vendor           2007 Revenue
                                (%)             Revenue         (%)            (%)
SAP              2,050.8        25.3            1,681.7         26.6           22.0
Oracle           1,319.8        15.3            1,016.8         15.5           29.8   676.5          8.3             451.7           6.9            49.8
Amdocs           421.0          5.2             365.9           5.6            15.1
Microsoft        332.1          4.1             176.1           2.7            88.6

Others             3,289.1      40.6           2,881.6      43.7            14.1
Total              8,089.3      100            6,573.8      100             23.1

The following table lists the top software vendors for CRM projects completed in 2006 using
external consultants and system integrators, according to a 2007 Gartner study.

Vendor                 Percentage of implementations
Siebel (Oracle)        41%
SAP                    8%
Epiphany (Infor)       3%
Oracle                 3%
PeopleSoft (Oracle)    2%         2%
Amdocs                 1%
Chordiant              1%
Microsoft              1%
SAS                    1%
Others                 15%
None                   22%

CRM Software

Sales Force Automation

Contact management
Contact management software stores, tracks and manages contacts, leads of an enterprise.

Lead management
Enterprise Lead management software enables an organization to manage, track and forecast
sales leads. Also helps understand and improve conversion rates.

eCRM or Web based CRM

Self Service CRM
Self service CRM (eCRM) software Enables web based customer interaction, automation of
email, call logs, web site analytics, campaign management.

Survey Management Software
Survey Software automates an enterprise's Electronic Surveys, Polls, Questionnaires and
enables understand customer preferences.
Customer Service
Call Center Software
Help Desk Software
Partner Relationship Management

Contract Management Software
Contract Management Software enables an enterprise to create, track and manage partnerships,
contracts, agreements.
Example: Upside Software, Accruent Software, diCarta, I-Many.

Distribution management Software

Using CRM, a business can:
 Provide better customer service
 Increase customer revenues
 Discover new customers
 Cross sell/Up Sell products more effectively
 Help sales staff close deals faster
 Make call centers more efficient
 Simplify marketing and sales processes

CRM has to two typical implementation methods: on-premise and on-demand/hosted.
Each method has its advantages and disadvantages as described below.

On-premise CRM is appropriate for:
 Companies seeking to implement highly customized customer-management practices
 Companies that need specialized data structures
 Companies with complex or real-time integration requirements
 Companies with available in-house IT resources and support systems
 Companies who can afford the up-front capital investment and fixed costs
 Companies who deal with sensitive data that don't want other parties to see

On-demand/hosted CRM is appropriate for:
 Customers seeking to implement standard processes from a variety of industries and
 Companies that are able to use standard data structures
 Companies with more basic integration requirements
 Companies with limited technical resources and support personnel
 Companies seeking variable pricing and lower up-front costs
 Companies dealing with non-proprietary data


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