Customer Relationship Management

Customer relationship management (CRM) is an organizational approach to business where the most important asset is the consumer. This organizational method, driven by technology, uses software applications to create an intricate system of data, automation, and evaluation to aid companies by improving productivity and enhancing efficiency.

CRM is a term that describes any software application that manages information on a customer for many different uses. The data being managed by CRM systems is entered as customer contact information; it [Page 101]then becomes available for use by sales representatives and by customer service and marketing departments within a company.

Companies use CRM in order to improve business functionality and remain competitive. CRM software helps companies to understand and know their existing customers, as well as find new ones. The systems use a database to store information ranging from customer addresses and telephone numbers to their purchasing behaviors.

CRM systems range from simple to complex, varying with the amount of features employed by the software. They are able to track and record customer complaints and pinpoint problems with untimely sales. They are also able to determine the lifecycle of particular products and track individual consumer purchases. For example, CRM can measure the success or failure rates of direct-mail marketing techniques. CRM systems are capable of delivering valuable information that would otherwise be stored in the minds of company employees: For example, software can “remember” who buys what, and can offer that information to the entire staff via computer networks.

Depending on the CRM vendor and software, automation can also be implemented in service, sales, and marketing relations across computer networks and telephone systems. The software can automatically analyze data and provide managers with feedback on services and relationships with customers. For instance, CRM systems can send out mass mailings from a database that surveys consumers on purchasing interests. When consumers reveal what they are interested in through the questionnaire, the company can then prepare to meet the demand for a certain product for an upcoming holiday season.

Many CRM applications work to store information on customers in order for companies to be able to treat their clientele on a personal level. For example, a service representative can type a customer's name into a database to retrieve data on any previously filed complaints; while on the phone with the consumer, the representative can use this information to answer questions about the service. The many features of CRM software can help companies to simplify relationships with their customers, and offer an easier means of obtaining the necessary information for contacting them. The information managed by CRM software can also be used to organize, analyze, and predict the best match-up of resources to customers.

The technology still faces a few problems, however. First, the storage of personal information on CRM systems has sparked privacy concerns; in particular, the collection of credit-card numbers and contact information raises trepidation among consumers. A second problem deals with the many versions and vendors of CRM software. Since CRM retailers offer different features within different versions of their software, companies find it difficult to purchase CRM software packages that meet all of their needs. Even though the development of CRM software continues to advance into multifaceted suites, companies still need to work with different vendors to resolve all of their issues.

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