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Tech
FAQ
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FAQ |
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What
is CRM?
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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. After
all, 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 process that will help bring together
lots of pieces of information about customers,
sales, marketing effectiveness, responsiveness
and market trends.
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What
is the goal of CRM?
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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. If it works as hoped, a
business can:
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provide
better customer service
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make
call centers more efficient
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cross
sell products more effectively
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help
sales staff close deals faster
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simplify
marketing and sales processes
-
discover
new customers
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increase
customer revenues
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How
does CRM function in helping a business?
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It
doesn't happen by simply buying software and
installing it. For CRM to be truly effective, an
organization must first decide what kind of
customer information it is looking for and it
must decide what it intends to do with that
information. 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. Solid 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.
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How
long will it take to get CRM in place?
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A
bit longer than many software salespeople will
lead you to think. Some vendors even claim their
CRM "solutions" can be installed and
working in less than a week. Packages like those
are not very helpful in the long run because
they don't provide the cross-divisional and
holistic customer view needed. The time it takes
to put together a well-conceived CRM project
depends on the complexity of the project and its
components.
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What
are some examples of the types of data CRM
projects should be collecting?
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What
are the keys to successful CRM implentation?
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Break
your CRM project down into manageable pieces by
setting up pilot programs and short-term
milestones. Starting with a pilot project that
incorporates all the necessary departments and
groups that gets projects rolling quickly but is
small enough and flexible enough to allow
tinkering along the way.
Make sure your CRM plans include a scalable
architecture framework. 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.
Recognize the individuality of customers and
respond appropriately. A CRM system should, for
example, have built-in pricing flexibility.
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Which
division should run the CRM project?
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The
biggest returns come from aligning business, CRM
and IT strategies across all departments and not
just leaving it for one group to run.
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What
causes CRM projects to fail?
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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, primarily because its sale force
resisted all the previous efforts to share
customer data.
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What
industries are leading the way in CRM
implementations?
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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.
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Why
is Customer Relationship Management Important?
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In
the past many companies were not focused on
improving their relationships with customers.
But with the introduction of the internet and
new CRM technology even tiny companies can
compete in terms of price, quality and product
features. The only remaining area where a
significant competitive advantage can be
achieved is through providing the best customer
support, care and targeted marketing, in short
CRM. For this reason Customer Relationship
Management is the hottest field of business
development in the US at present. The companies
which implement it most effectively will win,
and those who do not implement it, or do it
badly will fail.
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How
CRM provides competitive advantage
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When
an enterprise has superior knowledge of it’s
customers, and uses the knowledge to full
effect, it gains a competitive advantage over
the competitors. CRM software such as Goldmine
provides the tools to capture, manage and use
vast quantities of information about individual
customer needs. All departments, from sales to
accounting, support and service can record
customer activity and feedback into a single
database. They can schedule actions and follow
ups, categorize customer needs and sales
opportunities. The knowledge base constantly
grows and is updated, and enables the enterprise
to target it’s efforts and message to obtain
the highest return on the resources available.
The result of this approach is that customer
satisfaction and loyalty increases.
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How
to implement CRM ?
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Customer
Strategy
The starting point of a new Customer
Relationship Management implementation is to
develop a customer strategy. The strategy should
define the sort of customers the enterprise
wants, how they will be found, how customer
service will be provided, and will be done with
customers who fall outside of the target
profile.
Focusing
on the Customer
The focus of the enterprise needs to be shifted
to focus on the customer. This requires
investment in staff training and motivation.
Employees throughout he organization must be
trained and enabled to solve customer problems,
and be able to understand and work with new
information technology systems. The
organizations culture must focus on building
customer relationships, in which the
expectations of the customer are exceeded.
Most
CRM implementations involve the use of call
centers to improve customer service. Many center
experience high staff turnover due to low wages,
bad management and poor motivation. However, it
takes 6-9 months for a call center team member
to become fully proficient in dealing with
customers and using CRM tools. This ‘time to
competency’ (as Andersen Consulting refer to
it) is an important factor in determining how
successful a CRM approach will be.
It
has been shown by BA (and others) that there is
a direct link between the level of customer
satisfaction and employee satisfaction. The
front line customer facing team members must be
empowered to solve problems, and motivated to
believe in the products and services which they
are providing.
More
about CRM systems
All channels that interact with customer must
have access to the CRM system, and be fully
trained in it’s’ use. However, getting to
this single combined view of the customer may
present a challenge because of the legacy
systems in today’s organizations. However,
with the appropriate systems strategy and
implementation program in place there is an
opportunity to have a single and fully
integrated view of the customer across the
sales, marketing, customer service, finance, and
support and maintenance functions. The Internet
and electronic commerce should also be seen as a
channel, and integrated into the CRM solution.
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What
is CRM - some definition
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The
best definitions published here at CRMGuru.com
by various contributors.
1.
Customer Relationship Management (CRM) is a
business strategy to select and manage customers
to optimize long-term value. CRM requires a
customer-centric business philosophy and culture
to support effective marketing, sales, and
service processes. CRM applications can enable
effective Customer Relationship Management,
provided that an enterprise has the right
leadership, strategy, and culture.
2.
Customer relationship management is the
implementation of customer-centric business
strategies; which drives redesigning of
functional activities; which demands
re-engineering of work processes; which is
supported, not driven, by CRM technology. I use
this definition because it reinforces the
understanding that CRM is a "chain
reaction" triggered by new strategic
initiatives rather than something you can
initiate at the work process, or worse yet,
technology level.
3.
Customer relationship management is the superset
of business models, process methodologies and
interactive technologies for achieving and
sustaining high levels of retention and
referrals within identified categories of
valuable and growable customers.
4.
CRM extends the concept of selling from a
discrete act performed by a salesperson to a
continual process involving every person in the
company. It is the art/science of gathering and
using information about your customers to build
customer loyalty and increase customer value.
With the current state of information
technology, and high customer service
expectations, it's practically impossible to
consider these process issues without addressing
technology, but it's important to remember that
customer relationships—human
relationships—are the ultimate driving force.
5.
CRM is about developing and implementing
business strategies and supporting technologies
that close the gaps between an organisation's
current and potential performance in customer
acquisition, growth, and retention.
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What
does it do for an organisation?
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CRM
improves Return on Assets. The asset in this
case is the customer and potential customer
base.
Customer
Relationship Management should be exactly that:
the process of actively deepening the knowledge
(not data) you have of your customers over time,
and then using that knowledge gained to
customise your business and strategies to meet
that customers individual needs.
It
is important to stress this point simply because
a large percentage of the market's perception is
that CRM is simply a technological solution that
does sales force automation or call center. CRM
is about an entire change of mindset to become
customer orientated; it is not simply a piece of
technology that will solve all your needs.
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