Customer Relationship Management
Customer Relationship Management (CRM) is a business approach that includes the practices and strategies a company uses to determine the best ways to manage and maintain business relationships and interactions with customers, clients, partners or prospects. There is an operational side and an analytical side to CRM. The operational side refers to the approach an organization takes to interacting with customers. The analytical side of CRM is the technology-based CRM tools that companies use for the record-keeping and analysis of consumer data. Both CRM models can help a company provide customers with services and products that provide more value for a lower cost than competing companies. The overall goal of CRM is to improve business relationships with customers for increased customer retention and sales.
Operational CRM generally involves finding and attracting a customer or client, with the end goal of providing them with a service or product. The intention of CRM is to maintain these business relationships with customers to keep customer satisfaction rates high and to give them a reason to come back year after year. Operational CRM covers the entire lifecycle of the interactions with the client or customer, from prospect through to repurchase. An effective and well managed CRM strategy is often the root cause for customers staying loyal to a company for years.
One example of a CRM practice is observing and recording interactions between employees and customers through a company’s website, in-person conversations, phone calls, emails and social media. Another strategy is to inform customer service employees of a customer’s information, including their purchasing preferences and any concerns they have expressed. The intention is to properly inform and prepare an employee for any interactions with the customer in hopes that the customer would walk away from the encounter knowing that the company takes a personal interest in them and is fully invested in their satisfaction.
This is also where analytical CRM comes into play. Analyzing such interactions gives the company valuable insight into how the encounter may have improved the business relationship or how the company could change a few of its practices or strategies to more effectively satisfy and retain customers. Through the record-keeping and analysis of the data, the CRM tool augments the decisions and actions sales management staff make and take on behalf of customer relations and marketing. To ensure success, it’s best for companies to combine technological foundations with both information (customer interactions and data) and the routines and preferences of customers. If there is a healthy mix of technology, data, analysis and customer relations, the implementation of CRM is likely to be more successful.
Written for TrainingIndustry.com