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 What
is CRM?
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Executive
Summary
Customer
Relationship Management (CRM) is an important concept currently
being discussed in major enterprises around the world. CRM is
about automating and enhancing customer-centric business processes.
The staggering growth of this marketplace, the diversity of
the players, and the extent of merger and acquisition activity
warrant attention. Analysts predict that CRM will become the
largest application area of all time, and therefore must not
be ignored. IDC predict a market growth from $4 billion in 2000
to $11 billion by 2003. CRM is not a product. It is not even
a suite of products. CRM is a business philosophy that touches
upon many independent parts of the organization. CRM is a concept
that requires a new customer-centric business model, which must
be supported by a set of applications integrating the front
and back office processes. These coordinated applications ensure
a more satisfactory customer experience, which has a direct
link to a more profitable organization.
There is no doubt that a corporation’s installed base is one
of its greatest assets and therefore must be carefully managed.
Cultivating and nourishing customers is now recognized as being
essential for further success with both current customers and
new prospects alike. Statistics show that a new sale is five
times more costly than a sale to an existing customer. Investing
in existing customers to provide increased satisfaction has
a direct impact on customer loyalty and therefore on the bottom
line.
CRM addresses the Sales, Marketing, and Service activities of
the organization. These customer touch-points must be managed
to provide an enhanced customer relationship. As e-commerce
becomes a major business channel, coordination with CRM is an
imperative. The e-commerce strategy of an enterprise must be
in synch with the CRM business model to ensure a consistent
customer experience. Otherwise, independent treatment of these
two initiatives will cause redundant effort and will yield uncoordinated
results, causing frustrated and dissatisfied customers.
CRM is a win-win situation for both the customer and the enterprise.
The end-user receives increased value while management gains
constant up-to-date knowledge regarding the enterprise’s operation
relative to its customers. Company should have an integrated
customer repository with analytic capabilities that ensure a
superior customer experience as well as real time business pulsing
for management. |
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The
CRM Trend
Customer
Relationship Management (CRM) is the buzzword of today that
is promising greater return-on investment (ROI) for tomorrow.
The mandate to actively pursue, enhance, and manage the relationship
with customers is seen as the mechanism for achieving the competitive
edge required for greater profitability. Acquiring, developing,
and retaining customer relations must become a top priority
in corporations worldwide. In many situations, the quality of
the customer relationship is the only significant competitive
advantage.
Maintaining customer loyalty is becoming more difficult while
remaining as critical as ever. Cultivating and nourishing customers
is now recognized as being essential to further success with
both current customers and new prospects alike. The saying that
the competition is only a mouse click away has proven to have
serious consequences as new virtual enterprises are taking significant
business away from the leaders of yesterday. All customer interactions
must be managed through a common integrated set of processes
built on a sophisticated underlying technology enabling a consistent
customer view. Too often, the customer sees a fractured view
of the enterprise resulting from independent interaction points
such as phone, fax, email, and the web. This disjointed functioning
not only causes customer dissatisfaction, but also reflects
on the enterprise's ability to leverage existing customer-base
knowledge. Independent unmanaged customer touchpoints prevent
the enterprise from reaping the full benefit of its customers
due to an incomplete customer-base view.
Note that the term customer is used in the broadest sense to
include the community members that interact with the enterprise.
The customer includes the direct consumer, partner, or reseller
- all those who require information and services as part of
the product offering. |
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| 1.1
Definition |
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CRM
is about automating and enhancing the customer-centric business
processes of
Sales, Marketing, and Service. Customer Relationship Management
not only deals with
automating these processes, but also focuses on ensuring that
the front-office applications
improve customer satisfaction, resulting in added customer loyalty
that directly affects the
organization’s bottom line.
It is important to emphasize that managing the front office
alone independent of the backoffice
is insufficient. It is the integration of customer-centric applications
with the internal
back-end systems that provides the customer experience that
will in turn give the desired
ROI for the entire enterprise operation.
CRM is, therefore, actually a concept that requires a new customer-centric
business model
that must be supported by a set of applications integrating
the front and back office
processes. These coordinated applications ensure a more satisfactory
customer
experience, which is believed to have a direct link to a more
profitable organization. |
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