Customer Relationship Management (CRM) is a business strategy that leverages four core assets - people, processes, technologies, and knowledge - to improve profitability and foster good customer relationships across an enterprise.
A sound CRM strategy not only begins with these four assets, but also consistently evaluates them to ensure their continued effectiveness over time. For example, organizations must hire the right number of qualified people, who are regularly trained and motivated to perform their jobs well. Processes must be periodically evaluated to make sure they are efficient and effective. Organizations employing CRM solutions must occasionally monitor their technology to ensure that it is capturing, tracking, and analyzing relevant customer and company information across sales, marketing, and customer service departments. Additionally, the right customer and company knowledge must be captured from multiple channels, periodically updated, and shared with all of the relevant stakeholders.
An essential component to any CRM strategy is the technology. At their core, CRM systems are designed to help capture, track, and manage essential demographic, behavioral, and psychographic customer data. An employee can enter customer data into the CRM system, or a customer can enter it through an integrated self-service system, such as an automated interactive voice response (IVR) system, Web page, kiosk, or mobile app. Once the information is captured, it can be tracked and managed to help companies increase revenue, lower costs, improve productivity, and bolster customer relationships.
The Future of CRM
CRM technologies have evolved considerably during the past two decades. While early CRM software focused mostly on contact management, moving forward, CRM solutions will incorporate more omnichannel, analytics, social media, mobile, and cloud technologies.
Not only have CRM technologies evolved, but CRM strategies have matured as well. Early CRM solutions often had an inside-out approach, focusing first on internal company goals (e.g., increasing sales, cutting costs, improving efficiencies). Unfortunately, this approach often neglected customers’ needs. A call center manager, for example, might have been asked to lower average call handle times to cut costs. However, this strategy encourages call center agents to rush customers off the phone, whether or not callers are completely satisfied with the interaction. Naturally, this approach doesn’t bode well for customer satisfaction scores.
Because of failings like this, progressive companies are taking an outside-in approach to CRM - focusing on the customer first. It doesn’t mean they’ve given up on improving internal metrics; they simply don’t want to do it at the customers’ expense.