What is CRM?

Definition: What is CRM or Customer Relationship Management? CRM is the acronym for the term "customer relationship management". CRM is the common terminology used to describe the managing of prospects all the way through the entire sales process. CRM is often an entire data system that can either be manipulated manually, such as an index card system or a computer automated system. There is specially designed software for customer relationship management (CRM) that can be either installed directly into a computer or through a web based system that is accessible only online. CRM systems are useful in that they enable the management of the entire prospect/customer details such as the names, addresses, phone numbers, call records and purchase history and more. Other uses include planning of appointments, schedule of call back times and other sales related activities. Automated CRM, depending on the system, can be for only one user, or for several users to have access to customer accounts. Examples: When contact is made with a new prospect, good management of the lead details are best utilized when the information is promptly entered into the CRM system.

The CRM System and Its Importance

When a business decides that it can no longer handle its client volume with the software and capabilities that it has, it then has to move on to a CRM system that will help it to better cope. This can be difficult, however, because there are so many different CRM systems. They all work on the same premise, but the small things that they do or do not do can be significant when deciding which one to choose. Companies with employees that bill hourly will need to have this feature in their CRM system. Other companies that collect specific types of information will need to have fields that can capture this data. There are many different issues when it comes to the right CRM system, and those that are aware of this can find many ways to utilize the CRM system of their choice so that they will get the highest maximum benefit for the lowest amount of money. Not all businesses see the CRM system as being that important, but many of them realize the significance that it actually has for companies and for clients. Usually, people think about how a CRM system can help the business, but they do not really understand how much it can help the clients of that business, as well. When a customer calls a business with a question, a concern, or anything else that might have happened that must be discussed or corrected, knowing that customers information makes the process much easier. Without a CRM system that information would not be readily available, and therefore would slow down any remedy that the customer would and should receive. Having a good CRM system and understanding the importance of that can protect both the company and the customers from problems

Advantages of CRM (Customer Relationship Management)

Customer relationship management (CRM) is definitely an extensively-executed technique for building a companys relationships along with clients, consumers and purchase leads. It requires making use of modern technology to arrange, speed up, and also connect business enterprise processes principally product sales events, but additionally those for promoting, customer support, along with technical support. The entire objectives are usually to seek out, captivate, and earn new customers, cultivate and maintain those the organization currently has, lure

previous customers straight into the fold, and minimize the expenses of marketing along with customer support. Customer relationship management explains a new company wide enterprise techniques which include customer-interface business units along with other sections. The softwarising regarding customer relationship management pertaining to enterprises is viewed as a significant development in being capable of grabbing crucial customer details and better management customer associations. CRM guarantees quicker customer support at lesser expenses, superior customer happiness, more effective customer preservation and eventually customer devotion and much more sales. Nevertheless a lot of companies continue to reckon that CRM is simply just software programs, or perhaps a technological innovation and the total advantages of CRM are not really becoming completely recognized from business. CRM is actually considerably more than just a fabulous data-mining method. Listed below have been proven to be the five leading advantages of choosing a fabulous Customer Relationship Management System: 1. Expense Minimization A substantial part of Customer Relationship Management is the fact that it is actually building the customer an accomplice as part of your business, not only an area of interest. Because customers are performing their very own purchase entry, and are generally energized to obtain the details they require to arrived at a purchase option, significantly less purchase entry and also customer service employee is required. 2. Enhance Customer Satisfaction CRM at the same time assists product sales groups to own greatest degree of service to customers because they are able to competently recognize and satisfy their particular customers demands. Without having a CRM system customer details could be displaced or even recorded improperly, whenever you carry out a CRM system a sales staff can easily obtain information on every one of the companys customer within the a single location and will presume and satisfy their very own specifications. 3. Provide customer Information and Facts without Difficulty A CRM system enables whole groups of individuals to talk about business and customer information effortlessly which could conserve time. Acquiring customer track record at hand and being able to provide this particular for a whole product sales staff immediately could make the product sales course of action significantly less complicated. Another advantage could be that the information could be more protected since it will be in the particular location and wont have to be distributed throughout numerous hard drives, published out or delivered electronically onto memory sticks. 4. Recognize the Majority of Productive and Unprofitable Customers

Promoting and marketing to customers who are actually unprofitable might be time consuming as well. A Customer Relationship Management system can easily assist product sales groups in order to determine those clients which are generally not getting any kind of revenue directly into the business and rather permit these individuals to concentrate their time frame on the extra profitable customers. This particular procedure will guide to help enhance customer preservation because product sales teams will be able to develop powerful connections with the suitable customers. 5. Improve sales by advertising and cross marketing different products Each and every time a representative of staff notes details regarding their customers in a CRM system they are assisting to develop an image of the routines that the companys customers possess. A Customer Relationship Management system could monitor anything from the period of day that a customer creates a call and a purchase, to the acquisitions they put together, motivation strategies theyre part of as well as additional details chosen up in the discussion such as in the event that theyre planning on vacation or if they have their love ones. A sales team can make use of this particular information to cross sell and up sell other items or solutions to their customers as they will certainly possess an apparent concept of the customers lifestyles as well as buying methods. The information on a CRM system will additionally permit a staff to look at their own customers buying trends historically and look for motives in their actions which may suggest a person can easily get in touch with them at the most right moments.

Benefits of a CRM system

A properly implemented CRM system can bring significant benefits to organizations. But when I talk about a system, I mean the 3 P's, the complete consortium of people (employees, culture), procedures (way of doing business) and programs (supporting applications), not just an application running on a computer. CRM is more than just the next wave of computer-aided marketing, it's a way of doing business. If this does not make sense to you, please (re)read the section on the Customer Relationship Management definition. Let's take a look at the advantages that a CRM or Customer Relationship Management system can bring. 1. Shared or distributed data As companies realize that customer relationships are happening on many levels (not just through customer service or a web presence), they start to understand the need for sharing all available data throughout the organization. A CRM system is an enabler for making informeddecisions and follow-up, on all the different levels. 2. Cost reduction A strong point in Customer Relationship Management is that it is making the customer a partner in your business, not just a subject. As customers are doing their own order entry, and are empowered to find the info they need to come to a buy decision, less order entry and customer support staff is needed. 3. Better Customer Service All data concerning interactions with customers is centralized. The customer service department can greatly benefit from this, because they have all the information they need

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at their fingertips. No need to guess, no need to ask the customer for the n-th time. And through the use of push-technology, customer service reps can lead the customer towards the information they need. And, most of the time, the customer can do this on their own, as the CRM system (remember, the 3 P's) is more and more able to anticipate the need of the customer. The customer experience is greatly enhanced. Increased Customer Satisfaction The customer feels that he is more "part of the team" instead of just a subject for sales and marketing (the proverbial number), customer service is better, his needs are anticipated. There is no doubt that customer satisfaction will go up. If the products sold exceed the customers expectation, of course, no CRM system can help you with shoddy products. In my opinion, the term statisfaction is a contaminated. Many companies think that if customers are satisfied that this is a good predictor for repeat business. However, this is not the case. Onlydelighted customers have a great level of loyalty. Better Customer Retention If a CRM system can help to enchant customers, this will increase customer loyalty, and they will keep coming back to buy again and again, hence customer retention. Loyal customers Need I say more? Q.E.D. More repeat business The repeat business is coming from the delighted customers, who are turned from doubting clients into loyal advocates. More new business If you are delivering the ultimate customer experience, this will seed the word-of-mouth buzz, which will spawn more new business. More Profit! More business at lower cost equals more profit.

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Customer Relationship Management

6 Steps From Customer Service
One of the ongoing challenges successful businesses face is in optimizing customer satisfaction and developing Customer Relationship Management. So many companies "jump on the bandwagon" of improving customer service in order to impact customer retention levels. Yet, since 1994, customer satisfaction has dropped in nearly every sector of the economy according to the American Customer Satisfaction Index compiled by the University of Michigan. So why is this? Raising customer satisfaction levels requires a comprehensive systems approach. This article will cover: The importance of a clear customer experience strategy Selecting the correct people Developing, motivating and managing your people Establishing effective service delivery processes Building in continuous improvement Ensuring managers are the key change-agents

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1. Setting A Clear Customer Experience Strategy

Often organisations confuse defining a customer experience strategy with creating a "slogan". How many companies create a slogan without any supporting initiatives, thereby disillusioning employees and creating a "flavour of the month?"

To establish a good strategy certain key practices are required: Understand the overall organisational vision and mission Define the organisation's customer service direction, slogan and values Ensure customer service is defined as a key responsibility for the business/department Share the customer experience strategy via a comprehensive communications program Ensure that this strategy does not conflict with other business strategies. As consultants, it is amazing how often we hear organisations say, "Improving Customer Service is a priority, and we are also introducing stringent cost-cutting measures." This can present a tough dichotomy.

2. Selecting The Correct People

It's really hard to teach an elephant to dance! When recruiting employees to provide customer service, the process often tends to concentrate more on functional expertise, technical competence and knowledge rather than interpersonal skills. However, lack of the right attitude can drastically impact client satisfaction levels. Research has in fact shown that attitude is the most important requirement: skills and functional expertise can be taught. Therefore in selecting the right people: Define the critical job requirements Develop scenario-based interviews/assessment centres to screen and select candidates Involve multiple team members in the hiring process Ensure evaluation is based on objective, not the subjective "Be Like Me" criteria In part two of this article, we will look at the remaining four key principles of making the transition from a customer service culture to customer relationship management.

3. Developing, Motivating And Managing Your People

Even though you have hired the right people, there is still a need to orient them into the organisation's customer relationship culture and define key communication skills. In Call Centers and Technical Support departments, there is a tendency to rely on technical/functional skills and neglect interpersonal skills development. This can result in providing acceptable material service, the more tangible aspect, yet unacceptable personal service, the competitive differentiator. Therefore to build a customer relationship culture, it is important to: Provide training in key areas required to deliver exceptional personal service Reinforce these skills using ongoing coaching and feedback Measure current performance levels Reward performance using a combination of monetary awards and non-monetary recognition

4. Establishing Effective Service Delivery Processes

Effective processes and procedures provide the foundation for smoothing or inhibiting the material service element of the customer interaction. Efficient service delivery systems appear transparent to the customer. Poor systems create those 'speed bumps' that necessitate personal intervention in order to satisfy the customer requirements. The critical elements in ensuring a positive material customer experience are: Mapping the service delivery processes Evaluating critical success points in the process Defining service standards and objectives for these essential points Establishing service delivery procedures to optimise material service Creating service level agreements to smooth internal service delivery

5. Building In Continuous Improvement

No matter how effective the service delivery processes, or well-trained the service deliverers, things go wrong. Products have faults. Customers get frustrated. Things slip through the cracks. The organisations that are built around managing the customer experience are able to resolve these issues effectively. This process known as "recovery" is an important differentiator in building customer loyalty. In order to recover effectively, it is necessary to: Actively seek customer feedback and complaints: you cannot improve if you don't know what went wrong in the first place. Train staff how to handle customer complaints effectively using the correct mix of empathising, apologising and resolution. Make sure that the real problem is solved, not just the symptoms. Focus on proactive (prevention) as well as reactive (cure) problem solving.

6. Ensuring Managers Are The Key Change-Agents

As consultants, we observe that senior management often has the vision, intention and commitment to introduce a comprehensive customer relationship management system. The "make or break" element is in involving middle management in the change process, and empowering them to be the key change-agents. To do this, it is important to: Engage the management team early and often in the process Involve management members in articulating the customer experience strategy Teach managers coaching skills so that they are able to articulate and reinforce the key personal service skills Use managers as facilitators when rolling out interpersonal skills training Reward managers on establishing, monitoring and updating service delivery processes Ensure managers are able to act as an example to their teams.

Que-3 Theor\ of the Gaps Model Perceived service quality can be defined as, according to the model, the difference between consumers expectation and perceptions which eventually depends on the size and the direction of the four gaps concerning the delivery of service quality on the company side Customer Gap = f (Gap 1, Gap 2, Gap 3, Gap 4) The magnitude and the direction of each gap will affect the service quality. For instance, Gap 3 will be favourable if the delivery of a service exceeds the standards of service required by the organization, and it will be unfavourable when the specifications of the service delivered are not me pic

The key points for each gap can be summarized as follows:

x Customer gap: The difference between customer expectations and perceptions the service quality gap. x Gap 1: The difference between what customers expected and what management perceived about the expectation of customers. x Gap 2: The difference between managements perceptions of customer expectations and the translation of those perceptions into service quality specifications and designs. x Gap 3: The difference between specifications or standards of service quality and the actual service delivered to customers. x Gap 4: The difference between the service delivered to customers and the promise of the firm to customers about its service quality Applications of the Gaps Model First of all the model clearly determines the two different types of gaps in service marketing, namely the customer gap and the provider gaps. The latter is considered as internal gaps within a service firm. This model really views the services as a structured, integrated model which connects external customers to internal services between the different functions in a service organization. Important applications of the model are as follows: pic 1. The gaps model of service quality gives insights and propositions regarding customers perceptions of service quality. 2. Customers always use 10 dimensions to form the expectation and perceptions of service quality (Fig. 2). 3. The model helps predict, generate and identify key factors that cause the gap to be unfavourable to the service firm in meeting customer expectation

The Customer Service Gap Model

Todays consumer has become increasingly demanding. They not only want high quality products but they also expect high quality customer service. Even manufactured products such as cars, mobile phones and computers cannot gain a strategic competitive advantage through the physical products alone. From a consumers point of view, customer service is considered very much part of the product. Delivering superior value to the customer is an ongoing concern of Product Managers. This not only includes the actual physical product but customer service as well. Products that do not offer good quality customer service that meets the expectations of consumers are difficult to sustain in a competitive market. SERVQUAL (service quality gap model) is a gap method in service quality measurement, a tool that can be used by Product Manager across all industries. The aim of this model is to:

Identify the gaps between customer expectation and the actual services provided at different stages of service delivery Close the gap and improve the customer service

This model developed by Parasuraman, Zeithalm and Berry in 1985 identifies five different gaps:

The Customer Gap: The Gap between Customer Expectations and Customer Perceptions
The customer gap is the difference between customer expectations and customer perceptions. Customer expectation is what the customer expects according to available resources and is influenced by cultural background, family lifestyle, personality, demographics, advertising, experience with similar products and information available online. Customer perception is totally subjective and is based on the customers interaction with the product or service. Perception is derived from the customers satisfaction of the specific product or service and the quality of service delivery. The customer gap is the most important gap and in an ideal world the customers expectation would be almost identical to the customers perception. In a customer orientated strategy, delivering a quality service for a specific product should be based on a clear understanding of the target market. Understanding customer needs and knowing customer expectations could be the best way to close the gap.

The Knowledge Gap: The Gap between Consumer Expectation and Management Perception
The knowledge gap is the difference between the customers expectations of the service provided and the companys provision of the service. In this case, managers are not aware or have not correctly interpreted the customers expectation in relation to the companys services or products. If a knowledge gap exists, it may mean companies are trying to meet wrong or non-existing consumer needs. In a customer-orientated business, it is important to have a clear understanding of the consumers need for service. To close the gap between the

consumers expectations for service and managements perception of service delivery will require comprehensive market research.

The Policy Gap: The Gap between Management Perception and Service Quality Specification
According to Kasper et al, this gap reflects managements incorrect translation of the service policy into rules and guidelines for employees. Some companies experience difficulties translating consumer expectation into specific service quality delivery. This can include poor service design, failure to maintain and continually update their provision of good customer service or simply a lack of standardisation. This gap may see consumers seek a similar product with better service elsewhere.

The Delivery Gap: The Gap between Service Quality Specification and Service Delivery
This gap exposes the weakness in employee performance. Organisations with a Delivery Gap may specify the service required to support consumers but have subsequently failed to train their employees, put good processes and guidelines in action. As a result, employees are ill equipped to manage consumers needs. Some of the problems experienced if there is a delivery gap are:

Employees lack of product knowledge and have difficulty managing customer questions and issues Organisations have poor human resource policies Lack of cohesive teams and the inability to deliver

The Communication Gap: The Gap between Service Delivery and External Communications
In some cases, promises made by companies through advertising media and communication raise customer expectations. When over-promising in advertising does not match the actual service delivery, it creates a communication gap. Consumers are disappointed because the promised service does not match the expected service and consequently may seek alternative product sources.

Case Study: Amazon.com

Amazon.com provides books, movies, music and games along with electronics, toys, apparel, sports, tools, groceries and general home and garden items. Amazon is a good example of an online business that tries to close the service gaps in order to thoroughly meet consumer expectations.

Understanding Customer Needs

From the time the consumer starts to shop at Amazons online store, Amazon will attempt to understand their expectations. From when a customer first makes a product selection Amazon creates a consumer profile and attempts to offer alternative goods and services that may delight the consumer. The longer the consumer shops at Amazon, the more the company attempts to identify their preferences and needs.

Customer Defined Standards

When a consumer buys a product from Amazon they selects the mode of delivery and the company tells them the expected number of days it will take to receive their merchandise.

For example: standard shipping is three to five days but shipping in one or two days is also available. The company has set standards for how quickly customers are informed when a product is unavailable (immediately), how quickly customers are notified whether an out of print book can be located (three weeks), how long customers are able to return items (30 days) and whether they pay return shipping costs. These standards exist for many activities at Amazon from delivery to communication to service recovery.

Service Performance
Apart from defining their service delivery, Amazon goes one step further and delivers on its promises. Amazon performs! Orders often arrive ahead of the promised dates; orders are accurate and are in excellent condition because of careful shipping practice. Customers can track packages and review previous orders at any time. Amazon also makes sure that all its partners who sell used and new books and other related items meet Amazons high standards. The company verifies the performance of each purchase by surveying the customer and posting scores that are visible to other customers. Managing promises is handled by clear and careful communication on the website. Every page is very easy to understand and to navigate. For example the page dealing with returns eliminates customer misunderstanding by clearly spelling out what can be returned. The page describes how to repack items and when refunds are given. The customer account page shows all previous purchases and exactly where every ordered item is in the shipping process Amazon strategy has been well received by its customers and the Amazon brand is known worldwide.

Conclusion
Effective product management is a complex undertaking which includes many different strategies, skills and tasks. Product managers plan for creating the best products and operational excellence to maximize customer satisfaction, loyalty and retention. Recognising and closing gaps offers high quality customer service to the consumer and helps them to achieve their goal whilst maximising market position, market share and financial results through customer satisfaction. It also helps managers to identify areas of weakness and make improvements to a companys service delivery.