Customer relationship management (CRM) is a multifaceted process, mediated by a set of information technologies, that focuses on creating two-way exchanges with customers so that firms have an intimate knowledge of their needs, wants, and buying patterns. In this way, CRM helps companies understand, as well as anticipate, the needs of current and potential customers. Functions that support this business purpose include sales, marketing, customer service, training, professional development, performance management, human resource development, and compensation. Many CRM initiatives have failed because implementation was limited to software installation without alignment to a customer-centric strategy.

Overview

There are many aspects of CRM which were mistakenly thought to be capable of being implemented in isolation from each other. 

From the outside of the organization, a customer experiences the business as one entity operating over extended periods of time. Thus piecemeal CRM implementation can come across to the customer as unsynchronized where employees and web sites and services are acting independently of one another, yet together represent a common entity.

CRM is the philosophy, policy and coordinating strategy connecting different players within an organization so as to coordinate their efforts in creating an overall valuable series of experiences, products and services for the customer.

When dealing with your customers, does your company's right hand know what its left hand is doing? Have you ever lost a sale to an existing customer because accounting tried to collect a late payment while your deal was in final negotiations?

How is the customer experience for your customers with your company? And what about the cost of losing or acquiring customers?

Studies have found that it costs up to 10 times more to acquire new customers than to retain old ones. Still more studies have shown that most customer defections to competitors are because of service issues, not products or pricing. An effective CRM strategy is a significant step in responding to these issues.

3 Key Elements of CRM

What is CRM? CRM or Customer Relationship Management is a corporate strategy composed of applications, technology and products that fulfill three essential requirements:

• To give your enterprise a 360° view of each customer for consistent and unified contact with that customer whenever anyone anywhere in the enterprise deals with that customer. This knowledge increases the opportunities for sales and the effectiveness of customer service.
• To enable your customers to have a consistent view of your enterprise, regardless of the way the customer contacts you. This improves customer satisfaction and customer retention.
• To enable front office staff to perform sales, service and marketing tasks more efficiently as a team, increasing expertise and reducing costs.

CRM describes a strategy used to manage and report customer/prospect/partner/contact interactions with enterprise contacts including inside and outside sales, marketing, billing, shipping and customer service and support.

Advantages of CRM

CRM is an enterprise-wide corporate strategy for presenting a single face, sometimes called a unified marketing message, to the customer. It responds to issues relating to sharing customer data and providing a seamless contact and fulfillment experience for the customer.

CRM front-end applications usually integrate with backend systems such as accounting and manufacturing for a true enterprise-wide cost reduction solution.

Also, when customers and prospects contact an enterprise via the Internet, email, or chat, CRM solutions facilitate efficient handling of, effective responses to and convenient, searchable storage of these inquiries.