“The purpose of business is to create a customer” - Peter Drucker
Management of Customer Relations Customer Relationship Management; CRM) is invariably one of the most important and popular concepts that can be found in both literature and business practice. Despite this, it is often perceived incorrectly - mainly through the prism of a CRM-class IT system. However, the strategic aspect of the CRM philosophy is ignored. It is worth emphasizing these differences at the beginning of this article:
- The CRM strategy is a business philosophy that puts the customer in the center, taking into account his individual needs and behavior, and consequently leads to an increase in his satisfaction and brings the company such benefits as acquiring new, (long-term) retention of existing and returning lost customers with simultaneous optimization leading to lowering customer service costs and increasing profitability.
- The CRM system - as an IT technology - should be understood as a tool supporting and enabling the implementation of the business strategy of customer relationship management for departments in contact with the customer using multiple communication channels, to create customer value and value for the customer.
"The way you collect, manage and use information will determine whether you will be the winner or the loser" - Bill Gates
Therefore, the implementation of the CRM system will enable a more effective implementation of the CRM strategy, primarily by collecting, organizing, and managing information about the customer. The main benefits and changes resulting from the implementation of the CRM system are presented below:
- Strengthening the relationship with the client. This is the main benefit of implementing a CRM system. Incorrect practice in the operation of many companies is the lack of interest in the customer after the sale or an attempt to reach him on a general, not personalized level. And the more data we have, the collection of which is supported by the system, the more we know about the customer, the easier it is to take care of their needs. Retaining a client is cheaper than acquiring a new one, which is usually difficult and expensive. The implementation of the CRM system will enable control over the customer's life cycle - increasing customer satisfaction and loyalty through personalized activities in the area of Marketing, Sales, and Service. Besides, it will help to respond to needs in real-time, and thanks to the multi-channel communication, the client can choose the way of contact that best suits him, so that the company can take care of building relationships with him.
- Increasing the effectiveness of sales and after-sales (service) activities. The CRM system enables more efficient operations at the operational level by providing system users with the necessary tools and one data source. Moreover, by automating some of the business processes, it is possible to increase their efficiency and shorten the time of working with the system.
- Comprehensive data analysis. Keep in mind that the data itself is not a value if it is stripped of analytics. It is thanks to the possibility of forecasting and reporting that it is easier to make and implement strategic decisions, as well as verify the current functioning and, if necessary, implement appropriate actions.
- Increasing the effectiveness and optimization of marketing activities. By using the collected information on the needs and behavior of customers, it is possible to more accurately identify sales markets and reach the customer with a personalized offer. Today's customers expect an individual offer instead of a lot of unnecessary advertising materials (nobody likes spam). Thanks to CRM systems, it is possible to conduct such activities more effectively, presenting clients with personalized promotions.
- Better external and internal communication and cooperation. Thanks to one source of information about the client, communication will be improved both inside the company (everyone uses the same database, the same data) and external. Sharing information will be easier, both within one team, e.g. traders from the same area, and different teams, e.g. sales team with the complaint department. Additionally, losing an employee will no longer result in data loss. Thanks to external communication, for example using the Contact Center or the portal, you can stay in touch with the client at every stage of his life cycle.
However, remember - none of the above benefits will be achieved just by implementing a CRM system. It is important to prepare the organization in advance for the implementation of the strategy and philosophy of customer relationship management. Along with the system, there must be business, organizational and procedural change - but this is a topic for another article.
Senior SAP CRM Consultant / Business Expert SI-Consulting