Customer Relationship Management (CRM)
Customer relationship management (CRM) is a term that refers to practices, strategies and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with customers, assisting in customer retention and driving sales growth. CRM systems are designed to compile information on customers across different channels -- or points of contact between the customer and the company -- which could include the company's website, telephone, live chat, direct mail, marketing materials and social media. CRM systems can also give customer-facing staff detailed information on customers' personal information, purchase history, buying preferences and concerns.
Common features of CRM software include:
Marketing automation: CRM tools with marketing automation capabilities can automate repetitive tasks to enhance marketing efforts to customers at different points in the lifecycle. For example, as sales prospects come into the system, the system might automatically send them marketing materials, typically via email or social media, with the goal of turning a sales lead into a full-fledged customer.
Sales force automation: Also known as sales force management, sales force automation is meant to prevent duplicate efforts between a salesperson and a customer. A CRM system can help achieve this by automatically tracking all contact and follow-ups between both sides.
Contact center automation: Designed to reduce tedious aspects of a contact center agent's job, contact center automation might include pre-recorded audio that assists in customer problem-solving and information dissemination. Various software tools that integrate with the agent's desktop tools can handle customer requests in order to cut down the time of calls and simplify customer service processes.
Geolocation technology, or location-based services: Some CRM systems include technology that can create geographic marketing campaigns based on customers' physical locations, sometimes integrating with popular location-based GPS apps. Geolocation technology can also be used as a networking or contact management tool in order to find sales prospects based on location.
For all of the advancements in CRM technology, without the proper management, a CRM system can become little more than a glorified database where customer information is stored. Data sets need to be connected, distributed and organized so that users can easily access the information they need.
Companies also struggle to achieve a "single view of the customer," where many different data sets can be seamlessly accessed and organized in a single dashboard or interface to create one view of a customer’s account and relevant information. Challenges arise when customer data is siloed in several separate systems or when data is complicated by duplicate or outdated information that slows down and hampers the business process. These problems can lead to a decline in customer experience due to long wait times during phone calls, improper handling of technical support cases and other issues.
Social media, for example, has been touted as a more efficient channel by which customers can reach companies and get problems resolved or queries answered, rather than enduring the traditional method of waiting in a phone queue or awaiting an email response. In some cases, particularly in high-touch customer service scenarios , social platforms can fall short for customer service.
CRM (customer relationship management) analytics comprises all programming that analyzes data about customers and presents it to help facilitate and streamline better business decisions. CRM analytics can be considered a form of online analytical processing (OLAP) and may employ data mining. As companies have added new and often faster ways to interact with customers, the opportunity and the need to turn data collected about customers into useful information has become increasingly important. As a result, a number of software companies have developed products that perform customer data analysis, and analytics is a component of many CRM systems.
Applications of CRM analytics
- After implementation, CRM analytics offers insights to understand and use the data that is mined. Organizations use CRM analytics in the following ways:
- Customer segmentation groupings: Dividing customers into those most and least likely to repurchase a product; Profitability analysis and customer value: Learning which customers contribute to the highest profits over time. This involves understanding not just how much a customer spends, but how many resources you dedicate to that customer in return;
- Personalization: The ability to market to individual customers based on the data collected about them. This requires obtaining a 360-degree customer view;
- Measuring and tracking escalation: The ability to measure how often problems arise with a product or service to eliminate that issue and quickly achieve customer satisfaction;
- Predictive modeling: Comparing various product development plans in terms of likely future success given the customer knowledge base by measuring engagement levels through customer shares.
Benefits of CRM analytics
CRM analytics can lead to better and more productive customer relationships through the evaluation of the organization's customer service, analyzing the customers and verifying user data. CRM analytics can lead to improvement in supply chain management -- lower inventory and speedier delivery -- and thus lower costs and more competitive pricing. One of the biggest benefits of CRM analytics is the ability to create target marketing campaigns from customer analysis.