Definition: Customer Relationship Management (CRM), can be understood as the business strategy that involves obtaining, arranging and managing customer information and using the same across different ‘touch points’ of the customers, so as to improve customer service, which leads to the increase in customer loyalty and retention and boosts sales.
The term ‘customer touch point’ refers to an event when the customer comes in contact with the product or service, i.e. from real experience to personal communication to spontaneous observation.
The main objective of CRM is to build a strong and long-term relationship with the customers, as customers are regarded as the ‘king’ of the business.
Advantages of CRM
- Customized market offerings
- Better pricing
- Increased ability to target profitable customers
- Improvement in customer service efficiency
- Distinguished marketing campaigns
- Links customers and all channels through an integrated system
CRM facilitates the business entities to offer outstanding customer service by effectively utilising the account information of the individual. It helps the entities in customizing their products, services, programs, and media, on the basis of the information of the customers they have.
Types of CRM Application
- Analytical CRM: Analytical CRM aims at analysing, assessing and projecting customer behaviour, needs, preferences and trends, from the data obtained through various sources and report it to the management so that the marketers can make rational decisions. The analytics may help in identifying small problems related to the products or services offered by the company that requires a permanent solution.
- Operative CRM: It tends to maintain an actual interpersonal relationship with the customers, carried out by front office executives and the fundamental business automation processes such as marketing, sales and services. It keeps a record of all the details of the customer and is shared with the users (workers) whenever required.
- Collaborative CRM: The main purpose of collaborative CRM is information sharing between all the departments and divisions of the enterprise and the companies involved in the supply chain, so as to raise the bar of quality of services rendered to the customers.
In a nutshell, CRM assists the business in understanding the customer needs and expectations, attracting new customers, retaining the existing ones, winning new clients and contracts, customising the offering as per customer requirements, manage customer service request, organize customer interaction and reducing customer management costs.
CRM is used by both Business-to-Business (B2B) and Business-to-Customer (B2C), to record and maintain communications, such as Web, social media, email, mobile apps, telephone and so forth.