Customer Relationship Management

Introduction

Customer Relationship Management (CRM) is an important part of any companies' sales mix. As part of a sales mix, companies must have a strong sales team; a well planned and executed marketing strategy, and a method to record pertinent information to manage customer relations. A CRM system is an important part in any company. They have a variety of uses from holding basic information such as names and address, to holding other information including relationship history, contract information, and recording customer satisfaction levels.

What is a CRM System?

Defining a CRM system is difficult to do at best. These systems can range from something very simple, to something that is very complex. With this being said however, CRM can best be described as "methodologies, technologies, and e-commerce capabilities used by firms to manage customer relationships." Particularly, "CRM software used by companies' acts as an aid in the interaction between the customer and the company, which enables the company to coordinate all the communication efforts of the company, so that the customer is presented with a unified message and image."

Defining the Customer

When defining the customer in Customer Relationship Management, the first thought is usually that the customer is simply the end user of the products, when in fact; CRM's customers can be suppliers, partners, investors, employees, and other people or entities the firm may deal with. As a firm, it is important to know who your customer's are. In order to do this, the company will need to collect information each time a customer makes a purchase or when they come across relevant information about the customer. With this information, the firm can use this to track purchasing patterns, which will lead to the identification of the few largest buyers. With this knowledge of the consumer, the firms can distinguish where most of their business originates; thereby applying the 80/20 rule to their customers. This rule states that 80% of your business will come from 20% of your customers. Therefore, maintaining customer relationships with major buyers will help the company in the long run.

Investors in the firm will need to know specific information that relates to the performance of the company. Having access to this data is necessary to make informed decisions about investing in the company. By providing these records to the investors over a common data source, such as the company website, means that every investor will get the same information at the same time. This provides another benefit as well. It allows the investors to look at the information they need without taking up valuable employee time. Suppliers and partners can be kept informed through CRM systems by offering them product promotions, press releases and informing them of advertising campaigns.

CRM System Issues

Although CRM systems are very advanced, can offer enormous amounts of information at a click of a button, and are currently being used by the 70 percent of the fortune 100 countries, the systems still need to be improved. Some of the issues that have been identified by managers are: keeping track of service complaints, and customer satisfaction level. Keeping customers happy should be very important to the company. Firms must understand that it is less expensive to retain a customer than to find a new one. Therefore, firms should aim to meet or exceed the customer's expectations when providing them with support. The company wants to ensure that their current customers are satisfied so they become loyal to the company and are repeat purchasers in the future. Furthermore, they want their customers to provide positive word of mouth to future potential customers.

Common Mistakes When Implementing CRM Systems

When implementing CRM systems there are many common mistakes that companies make which include, but are not limited to, attempting to implement the system on too large a scale, lack of a sales process, and not maintaining the database. A firm looking to implement a CRM system may want to roll out something that involves every single aspect of the business. While it is understandable why companies may try to do everything at once in order to get all of the headaches over with in one shot, this approach may not be the best solution for many firms. When a firm decides that using a CRM system is appropriate for their company, they are better off to have a much narrower scope of the system they are trying to implement. Therefore, companies should focus on smaller, but relatable activities within