CRM

Software history

The concept of customer relationship management started in the early 1970s, when customer satisfaction was evaluated using annual surveys or by front-line asking. At that time, businesses had to rely on standalone mainframe systems to automate sales, but the extent of technology allowed them to categorize customers in spreadsheets and lists. In 1982, Kate and Robert Kestnbaum introduced the concept of Database marketing, namely applying statistical methods to analyze and gather customer data. By 1986, Pat Sullivan and Mike Muhney released a customer evaluation system called ACT! based on the principle of digital rolodex, which offered a contact management service for the first time.

The trend was followed by numerous developers trying to maximize leads’ potential, including Tom Siebel, who signed the first CRM product Siebel Systems in 1993.Nevertheless, customer relationship management popularized in 1997, due to the work of Siebel, Gartner, and IBM. Between 1997 and 2000, leading CRM products were enriched with enterprise resource planning functions, and shipping and marketing capabilities. Siebel introduced the first mobile CRM app called Siebel Sales Handheld in 1999. The idea of a cloud-hosted and moveable customer bases was soon adopted by other leading providers at the time, including PeopleSoft, Oracle, and SAP.

The first open-source CRM system was developed by SugarCRM in 2004. During this period, CRM was rapidly migrating to cloud, as a result of which it became accessible to sole entrepreneurs and small teams, and underwent a huge wave of price reduction. Around 2009, developers began considering the options to profit from social media’s momentum, and designed tools to help companies become accessible on all users’ favorite networks. Many startups at the time benefited from this trend to provide exclusively social CRM solutions, including Base and Nutshell. The same year, Gartner organized and held the first Customer Relationship Management Summit, and summarized the features systems should offer to be classified as CRM solutions. In 2013 and 2014, most of the popular CRM products were linked to business intelligence systems and communication software to improve corporate communication and end-users’ experience. The leading trend is to replace standardized CRM solutions with industry-specific ones, or to make them customizable enough to meet the needs of every business.

In November 2016, Forrester released a report where it “identified the nine most significant CRM suites from eight prominent vendors,” among them companies such as Infor, Microsoft, and NetSuite.

Types

Strategic

Strategic CRM is focused upon the development of a customer-centric business culture.

Operational

The primary goal of customer relationship management systems is to integrate and automate sales, marketing, and customer support. Therefore, these systems typically have a dashboard that gives an overall view of the three functions on a single customer view, a single page for each customer that a company may have. The dashboard may provide client information, past sales, previous marketing efforts, and more, summarizing all of the relationships between the customer and the firm. Operational CRM is made up of 3 main components: sales force automation, marketing automation, and service automation.

Sales force automation works with all stages in the sales cycle, from initially entering contact information to converting a prospective client into an actual client. It implements sales promotion analysis, automates the tracking of a client’s account history for repeated sales or future sales and coordinates sales, marketing, call centers, and retail outlets. It prevents duplicate efforts between a salesperson and a customer and also automatically tracks all contacts and follow-ups between both parties.

Marketing automation focuses on easing the overall marketing process to make it more effective and efficient. CRM tools with marketing automation capabilities can automate repeated tasks, for example, sending out automated marketing emails at certain times to customers, or posting marketing information on social media. The goal with marketing automation is to turn a sales lead into a full customer. CRM systems today also work on customer engagement through social media.

Service automation is the part of the CRM system that focuses on direct customer service technology. Through service automation, customers are supported through multiple channels such as phone, email, knowledge bases, ticketing portals, FAQs, and more.

Analytical

The role of analytical CRM systems is to analyze customer data collected through multiple sources, and present it so that business managers can make more informed decisions.[citation needed] Analytical CRM systems use techniques such as data mining, correlation, and pattern recognition to analyze the customer data. These analytics help improve customer service by finding small problems which can be solved, perhaps, by marketing to different parts of a consumer audience differently. For example, through the analysis of a customer base’s buying behavior, a company might see that this customer base has not been buying a lot of products recently. After scanning through this data, the company might think to market to this subset of consumers differently, in order to best communicate how this company’s products might benefit this group specifically.

Collaborative

The third primary aim of CRM systems is to incorporate external stakeholders such as suppliers, vendors, and distributors, and share customer information across organizations. For example, feedback can be collected from technical support calls, which could help provide direction for marketing products and services to that particular customer in the future.

Customer data platform

A customer data platform (CDP) is a computer system used by marketing departments that assembles data about individual people from various sources into one database, with which other software systems can interact. As of February 2017 there were about twenty companies selling such systems and revenue for them was around US$300 million.

Components

The main components of CRM are building and managing customer relationships through marketing, observing relationships as they mature through distinct phases, managing these relationships at each stage and recognizing that the distribution of value of a relationship to the firm is not homogenous. When building and managing customer relationships through marketing, firms might benefit from using a variety of tools to help organizational design, incentive schemes, customer structures, and more to optimize the reach of its marketing campaigns. Through the acknowledgement of the distinct phases of CRM, businesses will be able to benefit from seeing the interaction of multiple relationships as connected transactions. The final factor of CRM highlights the importance of CRM through accounting for the profitability of customer relationships. Through studying the particular spending habits of customers, a firm may be able to dedicate different resources and amounts of attention to different types of consumers.

Relational Intelligence, or awareness of the variety of relationships a customer can have with a firm, is an important component to the main phases of CRM. Companies may be good at capturing demographic data, such as gender, age, income, and education, and connecting them with purchasing information to categorize customers into profitability tiers, but this is only a firm’s mechanical view of customer relationships.This therefore is a sign that firms believe that customers are still resources that can be used for up-sell or cross-sell opportunities, rather than humans looking for interesting and personalized interactions.

CRM systems include:

Data warehouse technology, used to aggregate transaction information, to merge the information with CRM products, and to provide key performance indicators.

Opportunity management which helps the company to manage unpredictable growth and demand, and implement a good forecasting model to integrate sales history with sales projections.

CRM systems that track and measure marketing campaigns over multiple networks, tracking customer analysis by customer clicks and sales.

Some CRM software is available as a software as a service (SaaS), delivered via the internet and accessed via a web browser instead of being installed on a local computer. Businesses using the software do not purchase it, but typically pay a recurring subscription fee to the software vendor.

For small businesses a CRM system may consist of a contact manager system that integrates emails, documents, jobs, faxes, and scheduling for individual accounts. CRM systems available for specific markets (legal, finance) frequently focus on event management and relationship tracking as opposed to financial return on investment (ROI).

CRM systems for eCommerce, focused on marketing automation tasks, like: cart rescue, re-engage users with email, personalization.

Customer-centric relationship management (CCRM) is a nascent sub-discipline that focuses on customer preferences instead of customer leverage. CCRM aims to add value by engaging customers in individual, interactive relationships.

Systems for non-profit and membership-based organizations help track constituents, fundraising, sponsors’ demographics, membership levels, membership directories, volunteering and communication with individuals.

Customer benefits

With CRM systems customers are served better on day to day process and with more reliable information their demand of self service from companies will decrease. If there is less need to interact with the company for different problems, customer satisfaction level increases. These central benefits of CRM will be connected hypothetically to the three kinds of equity that are relationship, value and brand, and in the end to customer equity. Eight benefits were recognized to provide value drivers.

Enhanced ability to target profitable customers.

Integrated assistance across channels

Enhanced sales force efficiency and effectiveness

Improved pricing

Customized products and services

Improved customer service efficiency and effectiveness

Individualized marketing messages also called campaigns

Connect customers and all channels on a single platform.

In 2012, after reviewing the previous studies, someone selected some of those benefits which are more significant in customer’s satisfaction and summarized them into the following cases:

Improve customer services: In general, customers would have some questions, concerns or requests. CRM services provide the ability to a company for producing, allocating and managing requests or something made by customers. For example, call center software, which helps to connect a customer to the manager or person who can best assist them with their existing problem, is one of the CRM abilities that can be implemented to increase efficiency.

Increased personalized service or one-to-one service: Personalizing customer service or one-to-one service provides companies to improve understanding and gaining knowledge of the customers and also to have better knowledge about their customers’ preferences, requirements and demands.

Responsive to customer’s needs: Customers’ situations and needs can be understood by the firms focusing on customer needs and requirements.

Customer segmentation: In CRM, segmentation is used to categorize customers, according to some similarity, such as industry, job or some other characteristics, into similar groups. Although these characteristics, can be one or more attributes. It can be defined as a subdividing the customers based on already known good discriminator.

Improve customization of marketing: Meaning of customization of marketing is that, the firm or organization adapt and change its services or products based on presenting a different and unique product or services for each customer. With the purpose of ensuring that customer needs and requirements are met Customization is used by the organization. Companies can put investment in information from customers and then customize their products or services to maintain customer interests.

Multichannel integration: Multichannel integration shows the point of co creation of customer value in CRM. On the other hand, a company’s skill to perform multichannel integration successfully, is heavily dependent on the organization’s ability getting together customer information from all channels and incorporate it with other related information.

Time saving: CRM will let companies to interact with customers more frequently, by personalized message and communication way which can be produced rapidly and matched on a timely basis, and finally they can better understand their customers and therefore look forward to their needs.

Improve customer knowledge: Firms can make and improve products and services through the information from tracking (e.g. via website tracking) customer behaviour to customer tastes and needs. CRM could contribute to a competitive advantage in improving firm’s ability of customer information collecting to customize products and services according to customer needs.