4.1 Defining Customer Relationship Management

Customer Relationship Management (CRM)

CRM is about managing customer relationships. It should imply a customer-focused approach to business for fostering genuine relationships with these critical stakeholders: customers. Often, online marketing is referred to as e-CRM (electronic customer relationship management). This appears to underline the importance of technology in CRM. The Internet and the web have highlighted the importance of a customer-focused approach to business and marketing. It may seem obvious now, but the heydays of mass media marketing seemed to assume that people could be persuaded to purchase anything, provided there was sufficient advertising to promote a product. While signs declaring “The Customer Is Always Right” may have been stuck to the walls of shops and restaurants, the customer did not have much of a voice outside of that shop or restaurant. Moving forward a few decades to an increasingly connected society and marketplace, the customer’s voice is being heard in blogs, forums, reviews, and other forms of social media. It is easier for consumers to connect, albeit virtually, to share experiences with services and products.

Why Electronic Customer Relationship Management?

Customers are the most important stakeholders in a business’s success. Most companies would not have a revenue stream without customers purchasing goods or services. However, shifting from realizing this important fact to implementing it into day-to-day business decisions and strategy can be difficult. A successful relationship with a customer is based on meeting (and perhaps even exceeding) his or her needs. It is in determining the customer’s problems and providing solutions to those problems. Maintaining good customer relationships is critical to the success of a business. The costs of acquiring a new customer are generally far higher than retaining an existing customer relationship. This is why investing in customer relationship management (CRM) should increase revenue for the business.

The CRM cycle starts with determining potential customer problems and then presenting solutions to those problems. Solutions are implemented, and ongoing service maintains the relationship with the customer.

Seat the two potential travellers in front of their computers, and you no longer have human travel agents to make snap judgments based on appearance or try to sell additional services based on the type of traveller they see. Of course, you also no longer have the overhead costs of a travel agency and agents. However, web technology allows for similar, often superior, judgments and sales opportunities.

• For example, both travellers will likely have started researching their trips using a search engine. Creating landing pages tailored to the types of searches being made can allow the opportunity to tailor the products being presented to each traveller.
• Technology can also allow the online business to interact personally with a web visitor and provide the visitor with information she might not get in a travel agency—unbiased reviews from other customers. Technology can and should be used to treat different customers differently.
• Web technology allows customer-related marketing decisions to be made and tested relatively quickly and adjusted as required.

Electronic customer relationship management (e-CRM) uses technology in several ways to cement CRM into how organizations conduct themselves. Once a business shifts its focus to consumer needs, it will find that all these technologies feed each other. However, the fundamental principle of e-CRM is to remember that technology should be used to enable customer relationships, not replace meaningful relationships.

Purchasing Customer Keywords and the CRM

The data collected online should be used to build meaningful profiles of potential customers, and that information should be used to foster relationships. Web analytics tools gather a wealth of data that can inform customer relationships, from search keywords used to reach a website to navigation paths on a website. It is even possible to capture this information about specific customers when they act, such as purchasing or subscribing to a website. Without the customer knowing, the referral source of their visit and even an indication of their navigation path can be captured, along with their order or registration details, and stored for future use.

CRM software enables businesses to manage all customers and potential leads in a centralized place. No matter whom a customer speaks to within a company, all employees can access the same information recorded over time—a 360-degree view of the customer. This means that any time someone inside the organization looks up the customer, he can see every interaction the organization has had with the customer, what previous queries have been raised, and how these have been solved in the past. CRM software also enables businesses to automate much of the sales cycle, freeing salespeople to spend time on creating personal relationships where it matters—with potential and existing customers.

Technology, of course, has also changed the ways that customers can contact companies.  Customer relationships are no longer driven by telephone call centers but instead by social media and instant messenger (IM). These are all used as customer-service channels, both pre- and post-sale.

“Customer Relationship Management” by eMarketing: The Essential Guide to Online Marketing by Saylor Academy is licensed under a Creative Commons Attribution-NonCommerical-Share Alike 3.0 license unless otherwise noted.