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Customer Relationship Management (CRM)

CRM stands for Customer Relationship Management.
What is CRM?
CRM stands for Customer Relationship Management. It is a strategy used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. Good customer relationships are at the heart of business success. There are many technological components to CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a strategic process that will help you better understand your customers’ needs and how you can meet those needs and enhance your bottom line at the same time. This strategy depends on bringing together lots of pieces of information about customers and market trends so you can sell and market your products and services more effectively.
What is the goal of CRM?
The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. With an effective CRM strategy, a business can increase revenues by:
  • providing services and products that are exactly what your customers want
  • offering better customer service
  • cross selling products more effectively
  • helping sales staff close deals faster
  • retaining existing customers and discovering new ones
That sounds rosy. How does it happen?
It doesn't happen by simply buying software and installing it. For CRM to be truly effective, an organization must first understand who its customers are and what their value is over a lifetime. The company must then determine what the needs of its customers are and how best to meet those needs. For example, many financial institutions keep track of customers' life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time to fit their needs.
Next, the organization must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used. One company, for instance, may interact with customers in a myriad of different ways including mail campaigns, Web sites, brick-and-mortar stores, call centers, mobile sales force staff and marketing and advertising efforts. CRM systems link up each of these points. This collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed. For example, if someone has a mortgage, a business loan, an IRA and a large commercial checking account with one bank, it behooves the bank to treat this person well each time it has any contact with him or her.
Are there any indications of the need for a CRM project?
You need CRM when it is clear you don’t have an accurate view of who your customers are and what their needs or desires are or will be at any given stage in their lives. If you are losing customers to a competitor, that’s a clear indication that you should improve your understanding of your customers.
What are the keys to successful CRM implentation?
  • Develop your customer-focused strategy first before considering what kind of technology you need.
  • Break your CRM project down into manageable pieces by setting up pilot programs and short-term milestones. Start with a pilot project that incorporates all the necessary departments but is small enough and flexible enough to allow tinkering along the way.
  • Make sure your CRM plans include a scalable architecture framework. Think carefully about what is best for your enterprise: a solution that ties together “best of breed” software from several vendors via Web Services or an integrated package of software from one vendor.
  • Don't underestimate how much data you might collect (there will be LOTS) and make sure that if you need to expand systems you'll be able to.
  • Be thoughtful about what data is collected and stored. The impulse will be to grab and then store EVERY piece of data you can, but there is often no reason to store data. Storing useless data wastes time and money.
What causes CRM projects to fail?
Many things. From the beginning, lack of a communication between everyone in the customer relationship chain can lead to an incomplete picture of the customer. Poor communication can lead to technology being implemented without proper support or buy-in from users. For example, if the sales force isn't completely sold on the system's benefits, they may not input the kind of demographic data that is essential to the program's success. One Fortune 500 company is on its fourth try at a CRM implementation, because it did not do a good job at getting buy-in from its sale force beforehand and then training sales staff once the software was available.
What industries are leading the way in CRM implementations?
As in most leading-edge technology implementations, the financial services and telecommunications industries set the pace in CRM. Other industries are on the CRM bandwagon include consumer goods makers and retailers and high tech firms.
Which industry is behind the curve?
Heavy manufacturing. As a rule, the further an industry is away from the end customer, the less important CRM is.
Other stories by Thomas Wailgum © 2008 CXO Media Inc.
Source from: cio.com
Total hits:  33  -  Last modified:  27/09/2011 10:46:28 AM
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