Customer relationship management

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Customer relationship management (CRM) is a system for managing a companys
interactions with current and future customers. It often involves using technology to organize,
automate and synchronize sales, marketing, customer service, and technical support.
[1]

Contents
1 Types
o 1.1 Marketing and Customer Service
o 1.2 CRM in customer contact centers
o 1.3 Appointments
o 1.4 CRM in B2B (Business-to-Business) market
1.4.1 Characteristics of CRM
1.4.2 Importance of CRM to the B2B sector
1.4.3 Implementing CRM to the company
1.4.4 CRM software
1.4.5 Differences between CRM for B2B (Business 2 Business) and
B2C (Business 2 Customers)
1.4.6 SaaS CRM Software
o 1.5 Small business
o 1.6 Social media
o 1.7 Non-profit and membership-based
o 1.8 Customer-centric relationship management (CCRM)
1.8.1 Features of CCRM
2 Adoption issues
3 CRM Paradox
4 Market leaders
5 Trends
6 See also
7 External sources
8 Notes
Types
Marketing and Customer Service
Customer relationship management systems track and measure marketing campaigns over
multiple networks. These systems can track customer analysis by customer clicks and sales.
Places where CRM is used include call centers, social media, direct mail, data storage files,
banks, and customer data queries.
CRM in customer contact centers
CRM systems are customer relationship management platforms. The goal of the system is to
track, record, store in databases, and then data mine the information in a way that increases
customer relations (predominantly increased ARPU, and decreased churn). The CRM
codifies the interactions between you and your customers so that you can maximize sales and
profit using analytics and KPIs to give the users as much information on where to focus their
marketing and customer service to maximize revenue and decrease idle and unproductive
contact with your customers. The contact channels (now aiming to be omni-channel from
multi-channel) use such operational methods as contact centers. The CRM software is
installed in the contact centers, and help direct customers to the right agent or self-
empowered knowledge.
[2]
CRM software can also be used to identify and reward loyal
customers over a period of time.
Appointments
CRM software program can automatically synchronize suitable appointment dates, times, and
methods for customer contact. Once appointments are saved in a systems calendar, recalls the
information so that it can be easily retrieved. It pulls up information on appointments and
sends a represented message for action.
[citation needed]

CRM in B2B (Business-to-Business) market
The modern environment requires one business to interact with another via the web.
According to a Sweeney Group definition, CRM is all the tools, technologies and
procedures to manage, improve, or facilitate sales, support and related interactions with
customers, prospects, and business partners throughout the enterprise.
[3]
It assumes that
CRM is involved in every B2B transaction.
[4]

Despite the general notion that CRM systems were created for the customer-centric
businesses, they can also be applied to B2B environments to streamline and improve
customer management conditions. B2C and B2B CRM systems are not created equally and
different CRM software applies to B2B and Business-to-Customer (B2C) conditions. B2B
relationships usually have longer maturity times than B2C relationships. For the best level of
CRM operation in a B2B environment, the software must be personalized and delivered at
individual levels.
[5]

Characteristics of CRM
Well-designed CRM includes the following characteristics:
1. Relationship management is a customer-oriented feature with service response based
on customer input, one-to-one solutions to customers requirements, direct online
communications with customer and customer service centers that help customers
solve their questions.
2. Sales force automation. This function can implement sales promotion analysis,
automate tracking of a clients account history for repeated sales or future sales, and
also oordinate sales, marketing, call centers, and retail outlets in order to realize the
salesforce automation.
3. Use of technology. This feature is about following the technology trend and skills of
value delivering using technology to make up-to-the-second customer data
available. It applies data warehouse technology in order to aggregate transaction
information, to merge the information with CRM solutions, and to provide KPI (key
performance indicators).
4. Opportunity management. This feature helps the company to manage unpredictable
growth and demand and implement a good forecasting model to integrate sales history
with sales projections.
[4]

Importance of CRM to the B2B sector
Many of the characteristics in the B2B market suggest that CRM is a factor which influences
the business. CRM has special characteristics in the B2B market.
Consider Critical mass (software engineering). Due to customer relationship, a network can
be established and extended. Extension causes the network not to increase benefits linearly,
but in an exponential way. As new members can contact by any existing member the benefit
of a network of 200 people is much more effective than one with 100. Hence, these networks
can be used to increase the amount of available information for each company. This may lead
to more information about a customer which can be used to make the way of handling the
customer easier in the future. The history of previous sales from this customer may be a great
relief. Moreover it is possible to establish technical cooperation a bigger network is more
likely to provide special services.
These services include, among others systems integration, hosting, financial services such as
payment processing, receivables management, credit analysis and logistics services.
Services of this kind encourage companies to join the B2B network by using CRM.
Furthermore, B2B hubs have another advantage as they can substitute external personal if
members of the network liaise. This may not only avoid extra costs for arrangement of a new
contract but is also likely to accelerate the speed of this arrangement as they are in the same
network and already possess information about their negotiating partner. Ultimately, special
knowledge is required for B2B markets. As B2B customers are generally more rational
customers than B2Cs, a person or a team with special knowledge to each customer or
industry may enhance the sales in this area.
Implementing CRM to the company
The following are general guidelines on implementing a CRM system.
1. Make a strategic decision on what problems you want your CRM system to address,
what improvements or changes it should bring in the business processes of the
organization.
2. Choose an appropriate project manager. Typically IT will be engaged, however a
manager with a customer service/sales and marketing business focus should be
involved, as the impact of the project will be mainly on the business side.
3. Ensure executive sponsorship and top management support.
4. Empower team members with the required authority to complete the tasks.
5. Select the correct implementation partner. They must have both vertical and
horizontal business knowledge, as well as technical expertise.
6. Define KPI's that will measure the project's success
7. Use a phased approach. Work towards long-term enterprise-scale implementation
through a series of smaller, phased implementations
[6]

CRM software

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Selecting a CRM program means finding the software that best fits the companys needs.
CRM software comes with many features and tools, and despite the fact that many CRM
products offer similar feature sets, there are some unique tools in each one, for example
Microsoft Dynamics CRM. Programs can be divided into categories by several criteria:
Features refer to how well the software integrates with other applications (ex.
Outlook, Gmail, iCall etc.) and how accessible information is. It covers everything
from calendar alerts and to-do lists to mobile access and synchronization capabilities.
Contact information ranking outlines the programs ability to store specific
information for each contact. The business world is fast-paced, so managers need to
be able to access customers information quickly.
Sales and marketing tools are designed to help and maintain current clients and gain
new ones. Most importantly this tool helps find campaigns with positive ROI and
campaigns that are not yet performed.
Ease of use is about the program's design. A well built CRM program will be easy to
navigate quickly and will make the most important items clear and easy to find.
Help and support indicates what support the CRM software manufacturer provides
for their product.
[7]

Differences between CRM for B2B (Business 2 Business) and B2C (Business 2
Customers)
B2B and B2C marketing operates differently, that is why they cannot use the same software.
All the differences are focused on the approach of these two types of businesses:
B2B companies have smaller contact databases than B2C
The amount of sales in B2B is relatively small
In B2B there is less figure propositions, but in some cases they cost a lot more than
B2C items
Relationships in B2B environment are built over a longer time
B2B operations require special CRM solutions that are not the same as for the B2C industry:
B2B industries require specialized CRM solutions, which are different from B2C
companies requirements. This is the main reason for ineffective adoption of
applications, despite both B2B and B2C industries having the same aim: to
understand its own customers better
There must be different CRM solutions for industries within the B2B market, because
of the special needs of each one. Also there is a demand of designing solutions using
special color schemes.
B2B CRM must be easily integrated with other companies IT-solutions. Such
integration enables the creation of forecasts about customer behavior based on their
buying history, bills, business success, etc.
An application for a B2B company must have a function to connect all the contacts,
processes and deals among the customers segment and then prepare a paper
Automation of sales process is an important requirement for B2B solutions. It should
effectively manage the deal and progress it through all the phases towards signing
A crucial point is personalization. It helps the B2B company to save strong and long-
lasting relationships with the customer. To communicate with them more effectively,
there should be integration with the email solutions
So, all the B2B applications must be both personalized and be able to establish
communication channels for support of customers
SaaS CRM Software
Often referred to as "on-demand" software, SaaS based software is delivered via the Internet
and does not require installation on your computer. Instead, you'll generally access the
software via your web browser. Businesses using the software do not purchase the software,
and typically pay a subscription fee to the software vendor.
[8]

Small business
For small businesses a CRM system may simply consist of a contact manager system which
integrates emails, documents, jobs, faxes, and scheduling for individual accounts.
[citation needed]

CRM systems available for specific markets (legal, finance) frequently focus on event
management and relationship tracking as opposed to financial return on investment (ROI).
Social media
CRM often makes use of social media to build up customer relationships. Some CRM
systems integrate social media sites like Twitter, LinkedIn and Facebook to track and
communicate with customers sharing their opinions and experiences with a company,
products and services.
[9]
Enterprise Feedback Management software platforms such as
Confirmit, Medallia, and Satmetrix combine internal survey data with trends identified
through social media to allow businesses to make more accurate decisions on which products
to supply.
[10]

Non-profit and membership-based
Systems for non-profit and also membership-based organizations help track constituents,
fund-raising, Sponsors demographics, membership levels, membership directories,
volunteering and communication with individuals.
[citation needed]

Customer-centric relationship management (CCRM)
CCRM is a style of customer relationship management that focuses on customer preferences
instead of customer leverage. This is a nascent sub-discipline of traditional customer
relationship management; to take advantage of changes in communications technology.
Customer centric organizations help customers make better decisions and it also helps drive
profitability. CCRM adds value by engaging customers in individual, interactive
relationships.
[11]

Customer-centricity differs from client-centricity in that the latter refers almost exclusively to
business-to-business models rather than customer-facing firms.
Features of CCRM
Customer-centric relationship management is used in marketing, customer service and sales,
including:
tailored marketing
one-to-one customer service
retaining customers
building brand loyalty
providing information customers actually want
Subscription billing
Rewards
Accenture
[12]
and Emerald Insight
[13]
are now beginning to focus on CCRM as a discipline,
with studies appearing on Mendeley.
[14]

Adoption issues
In 2003, a Gartner report estimated that more than $2 billion had been spent on software that
was not being used. According to CSO Insights, less than 40 percent of 1,275 participating
companies had end-user adoption rates above 90 percent.
[15]
Many corporations only use
CRM systems on a partial or fragmented basis.
[16][citation needed]
In a 2007 survey from the UK,
four-fifths of senior executives reported that their biggest challenge is getting their staff to
use the systems they had installed. 43 percent of respondents said they use less than half the
functionality of their existing system.
[17][citation needed]
. Recently, it is found in a study that
market research regarding consumers preference may increase the adoption of CRM among
the developing countries' consumers.
[18]

CRM Paradox
The CRM Paradox, also referred to as the "Dark side of CRM",
[19]
entails favoritism and
differential treatment of some customers. This may cause perceptions of unfairness among
other customers' buyers. They may opt out of relationships, spread negative information, or
engage in misbehavior that may damage the firm. CRM fundamentally involves treating
customers differently based on the assumption that customers are different and have different
needs. Such perceived inequality may cause dissatisfaction, mistrust and result in unfair
practices. A customer shows trust when he bonds in a relationship with a firm when he knows
that the firm is acting fairly and adding value. However, customers may not trust that firms
will be fair in splitting the value creation pie
[clarify]
in the first place. For example, Amazons
test use of dynamic pricing (different prices for different customers) was a public relations
nightmare for the company
[citation needed]
.
Market leaders
The CRM market grew by 12.5 percent in 2012.
[20]
The following table lists the top vendors
in 20062008 and 2013 (figures in millions of US dollars) published in Gartner studies.
[21][22]

Vendor
2013
Revenu
e
2013
Shar
e (%)
2012
Revenu
e
2012
Shar
e (%)
2008
Revenu
e
2008
Shar
e (%)
2007
Revenu
e
2007
Shar
e (%)
2006
Revenu
e
2006
Shar
e (%)
Salesforce.co
m
3,292 16.1 2,525.6 14.0 965 10.6 676.5 8.3 451.7 6.9
SAP AG 2,622 12.8 2,327.1 12.9 2,055 22.5 2,050.8 25.3 1,681.7 25.6
Oracle 2,097 10.2 2,015.2 11.1 1,475 16.1 1,319.8 16.3 1,016.8 15.5
Microsoft
Dynamics
CRM
1,392 6.8 1,135.3 6.3 581 6.4 332.1 4.1 176.1 2.7
Others 11,076 54.1
10,086.
8
55.7 3,620 39.6 3,289.1 40.6 2,881.6 43.8
Total 20,476 100 18,090 100 9,147 100 7,674 100 6,214 100
Trends
Many CRM vendors offer subscription-based web tools (cloud computing) and software as a
service (SaaS). Some CRM systems are equipped with mobile capabilities, making
information accessible to remote sales staff.
[citation needed]
Salesforce.com was the first company
to provide enterprise applications through a web browser, and has maintained its leadership
position.
[23]
Traditional providers have recently moved into the cloud-based market via
acquisitions of smaller providers: Oracle purchased RightNow in October 2011
[24]
and SAP
acquired SuccessFactors in December 2011.
[25]

The era of the "social customer"
[26]
refers to the use of social media (Twitter, Facebook,
LinkedIn, Google Plus, Pinterest, Instagram, Yelp, customer reviews in Amazon, etc.) by
customers. CR philosophy and strategy has shifted to encompass social networks and user
communities.
Sales forces also play an important role in CRM, as maximizing sales effectiveness and
increasing sales productivity is a driving force behind the adoption of CRM. Empowering
sales managers was listed as one of the top 5 CRM trends in 2013.
[27]

Another related development is vendor relationship management (VRM), which provide tools
and services that allow customers to manage their individual relationship with vendors. VRM
development has grown out of efforts by ProjectVRM at Harvard's Berkman Center for
Internet & Society and Identity Commons' Internet Identity Workshops, as well as by a
growing number of startups and established companies. VRM was the subject of a cover
story in the May 2010 issue of CRM Magazine.
[28]

In 2001, Doug Laney developed the concept and coined the term 'Extended Relationship
Management' (XRM).
[29]
Laney defines XRM as extending CRM disciplines to secondary
allies such as the government, press and industry consortia.
CRM futurist Dennison DeGregor describes a shift from 'push CRM' toward a 'customer
transparency' (CT) model, due to the increased proliferation of channels, devices, and social
media.
[30]

Capterra, Inc. ranked the Top CRM Software Solutions in 2013 based on total number of
customers, total number of users and social presence.