CRM originated in early 1970s when the business units had a manifestation that it would be advisable to become ‘customer emphatic’ rather that ‘product emphatic’. Birth of CRM was because of this heedful perceptiveness.
The famous writer and management consultant Peter Drucker wrote; ‘The true business of every company is to make and keep customers’. Traditionally every transaction was on paper and dependent on goodwill which created hindrance in clutching customers. People used to work hard in entertaining customers by presenting new products with astonishing services; they were ready to work overtime for grasping more and more customers for increasing business. This too resulted in customer satisfaction and loyalty up to some extent, but at the end of the day there was no such bonding or relation between the two to carry on with future business smoothly.
Previously business was quite easy as it was mere a one-to-one dealing without any specific process. But with time, due to incoming complexities in communication, it found itself in troubled waters. Emerging of new strategies and technologies in global marketplace and a mammoth degree of competition in business, the approach needed to be changed to proactive rather than reactive. Origination of CRM turned out to be a piece of cake for all suppliers and customers due to its advantages. Customer relationship management came as a process that dealt with relationships with customers surpassing the whole business.
Originally customer relationship management was based on three major principles; shielding the current customers, fostering new customers and enhancing asset value of all the customers. With the advent of CRM which was integrated with high end software and technology, business perspectives were totally changed. A CRM system eventually emerged as consisting of company-full of information which is depicted sophistically to increase business profit and meliorate customer satisfaction and loyalty, on the same hand reduces business cost and investment.
The outgrowth in origin of CRM as a strategic approach is a result of some of the following important perspectives:
- The belief that customers are the real assets and not just the people in the audience.
- The maturation of one-to-one transaction advent.
- Extensive use of software and technologies to maintain useful information and no manual labor.
- The realization of the benefits of utilizing information proactively and not reactively.
- The change of business view to relationship approach rather than transactional approach.
- The approach of concentrating more on customer values rather than concentrating on how the product is delivered to the customer.
- The approach of focusing on customer satisfaction and loyalty rather than focusing self satisfaction and profit.
- The acceptance of the fact that using high end technologies and software the cost can radically be decreased without compromising on quality and service of products.
- The increasing tendency to retain existing customers and trying to get more and more business out of them.
- The realization that the traditional trends of marketing and selling are increasingly fading out in the current economic scenario.
These additive approaches helped a lot in building up consequently the modern CRM. Today we have well defined and sophisticated CRM systems into being which are always in process of improvement.
The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team.
CRM Tools – An independent view
If you work in sales the chances are you will be using or will come across CRM Systems, where you can turn interactions with customers into potential sales with customer relationship management software. CRM software, however, can be fairly complicated to implement, and some businesses don’t need it.
If you’ve ever wondered why it takes so long to fix a problem with over the phone regarding services or products, you’ve experienced poor customer service firsthand. Usually this is because one department doesn’t have key information that another department already has.
So how can you avoid this type of problem and improve customer service in your business? And how can you turn interactions with customers into potential sales? One option is customer relationship management (CRM) software. CRM software, however, can be fairly complicated to implement… Here’s how to decide whether CRM software is right for your business.
What does it do?
A CRM system helps you manage customer relationships, close sales, improve your customer support, and consolidate important information that employees need to do their jobs, all in one place. It does this by recording transactions for each customer and sending alerts to employees for different tasks, such as when to call back the customer or when a contract will expire. You can also use it to filter data according to customer preferences (such as customers who like to buy hats and gloves). This can help you develop sales promotions.
Use it to improve your service
You can filter data with a CRM system to show you patterns from service calls and figure out, say, that a certain product has been responsible for a lot of your company’s time. You might also find data that help you streamline your operation. Let’s say you’re a small electronics store, and you discover that a large number of customers don’t know where the on switch is in a popular device. You can include instructions to be included in the packaging and make that the first question your support people ask when called.
Look at your business needs, not your business size
CRM makes the most sense when you have a high volume of repeat customers, especially if they’re handled by a relatively small staff. An artist who repeatedly sells reproductions of his works to a client list of 10,000, a 12-person travel agency with 500,000 customers, and a small to midsize insurance or manufacturing business are all examples of companies that could benefit from CRM.
On the other hand, if you mainly look for new clients and keep in touch with just a small number of current customers, you can get by with simple contact management software. One key question to ask is whether your company tracks customers for support issues as well as sales leads. If so, CRM software can probably help.
Go with an entry-level CRM application (or even a point-of-sale system) if your needs are modest
Full-scale CRM is not a solution for every business. There is no sense in spending money on extra software and maintenance if you don’t track customer support issues and don’t need to integrate the system with an elaborate, pre-existing computer network.
Consider hosted CRM if you don’t have the IT resources available
Implementing full-scale CRM requires additional computers, software, and (most likely) at least a few IT employees to maintain the system. If that’s too much firepower for your business, try a hosted CRM system instead.
A hosted (or on-demand) CRM solution such as Salesforce.com or SageCRM.com lets the CRM vendor (instead of your company) store all of the data on its servers. Your employees can then use the different modules, such as managing contracts, marketing automation, and document management, from a Web-based interface without IT having to maintain the system. If you go this route, look for a smooth migration policy to an in-house product as your needs grow.