MBA Perspective : Customer Relationship Management (CRM)

Customer relationship management (CRM) is a hot topic in the business world today. Thanks to rapidly advancing (and widely available) technological innovations, competitive advantage based on new products and services is often here today, gone tomorrow. Everybody can implement that new trick you found.

Carl De Lucia’s MBA Perspective : CRM

So what’s happening is companies are focusing on “owning” the customer/client. What this means is a renewed focus on building and nurturing strong, long-lasting relationships with customers. How is this done? By knowing as much as you can about the existing client base. Who are they? How do you contact them? Are they costly to sell to? What do they usually buy? How much do they usually spend with your firm?

Now, if I’ run a local bakery, it’s easy to take care of the customer so they feel “special” because I know them, I see them on a regular basis, I know their usual orders. But if I’m running a big corporation, I don’t know who my regular customers are with so many markets, so many products, so many points of interaction. There’s a sales department, service department, marketing department, and they have a difficult time efficiently sharing information with eachother. That’s where CRM comes in.

The objective of CRM systems is to capture and integrate customer data from throughout the organization, consolidate it, analyze it, and distribute the results to various customer “touch points”. A touch point (or contact point) is a method if interation with the consumer. It can be over the phone, email, customer service desk, Facebook, your website, or in a retail store. A good CRM system provides data and tools that address questions like: “What’s the value of this customer to us over their lifetime?” and “who are our most loyal customers?”. A big idea behind CRM is: it’s a lot more expensive to get new customers than to keep the ones you already have. Of course, this is true and statistics back it up time and time again.

When you look at CRM software solutions, it’s important to realize that there are a ton of options ranging from niche products like customizing your website for particular consumers, to sophisticated reporting tools. A few of the more important capabilities you’ll want to look for are as follows.

Sales Force Automation – This helps the sales staff increase their productivity by focusing sales efforts on the most profitable clients.

Marketing – Provides capabilities for capturing prospect and customer data that can provide product and service information for qualifying leads for targeted marketing and for scheduling mailings or email.

Customer Service – Provide information and tools to increase the efficiency of call centers and help desks. This technology usually has the capability to assign and manage customer service requests.

A form of CRM software that particularly interests me is social CRM. These tools let businesses connect customer conversations from social networking sites to CRM processes. Salesforce.com and Oracle CRM are a few of the big companies that are jumping on this software. This reinforces the theory that social media is here for good (in one form or another) and ignoring it is a foolish mistake.

Reach Carl DeLucia at carldelucia22@gmail.com – Follow him on Twitter @cdelucia

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