Customer Relationship Management - CRM

What is 'Customer Relationship Management - CRM'

Customer relationship management (CRM) refers to the principles, practices and guidelines that an organization follows when interacting with its customers. From the organization's point of view, this entire relationship encompasses direct interactions with customers, such as sales and service-related processes, and forecasting and analysis of customer trends and behaviors. Ultimately, CRM serves to enhance the customer's overall experience.

With the growth of the Internet and related technologies, customers are concerned over the privacy and safety of their personal information. Therefore, businesses need to ensure the storage and analysis of their customer data has the highest levels of protection against cyber criminals, identity theft and other breaches of security.

BREAKING DOWN 'Customer Relationship Management - CRM'

Elements of CRM range from a company's website and emails to mass mailings and telephone calls. Social media represents one way companies adapt to trends that benefit their bottom line. The entire point of CRM is to build positive experiences with customers to keep them coming back so a company creates a growing base of returning customers.

Software

Special CRM software aggregates customer information in one place to give businesses easy access to data, such as contact data, purchase history and any previous contact with customer service representatives. This data helps employees interact with clients, anticipate customer needs, recognize customer updates and track performance goals when it comes to sales. CRM software's main purpose is to make interactions more efficient and productive. Automated procedures within a CRM module include sending a sales team marketing materials based on a customer's selection of a product or service. Programs also assess a customer's needs to reduce the time it takes to fulfill a request.

Cloud Solutions

Cloud-based systems provide real-time data to sales agents at the office and in the field as long as a computer, smartphone, laptop or tablet connects to the Internet. The convenience of this type of system has a trade-off. If the company goes out of business or faces acquisition, access to customer information may become compromised. A business might have compatibility issues when and if it migrates to a different vendor for this kind of software. Typically, cloud-based CRM programs cost more than in-house programs.

Management

All of the computer software in the world to help with CRM means nothing without proper management and decision-making from humans. Plus, the best programs organize data in a way that humans can interpret readily and use to their advantage. For successful CRM, companies must learn to discern useful information and superfluous data, and weed out any duplicate and incomplete records that may give employees inaccurate information about customers.

RELATED TERMS
  1. Customer

    An individual or business that purchases the goods or services ...
  2. Relationship Manager

    A professional who works to improve a firm's relationships with ...
  3. Negative Verification

    A system of confirming that a bank's records agree with a customer's ...
  4. Account Manager

    An employee who is responsible for the day-to-day management ...
  5. Relationship Banking

    A strategy used by banks to enhance their profitability. They ...
  6. Third-Party Verification - TPV

    When an outside organization reviews a customer's information ...
Related Articles
  1. Stock Analysis

    Salesforce Vs. SAP: Comparing Top CRM Providers (CRM, SAP)

    Learn about the different CRM offerings by Salesforce and SAP. Understand each company's past and what kind of futures the differences indicate.
  2. Professionals

    How Salesforce CRM Works

    Because companies and individuals are able to interact globally to conduct business, technology has had to replace the paper Rolodex.
  3. Stock Analysis

    Salesforce.com Tops Second Quarter Estimates (CRM, IT)

    Salesforce.comĀ (NYSE: CRM) recently reported second quarter earnings that topped analyst estimates on the top and bottom lines. The cloud-based CRM (customer relationship management) provider ...
  4. Stock Analysis

    What Is So Hot About Salesforce? (CRM)

    Learn about Salesforce and the suite of customer relationship management software it offers. Understand what exactly makes Salesforce such a good company.
  5. Stock Analysis

    Surveying the Business Intelligence Space

    Decision makers always want real-time information to make better decisions but often can't get it - can these firms make this problem a thing of the past?
  6. Stock Analysis

    Trade Review: Earnings Play Gone Wrong

    This real market example shows how an option spread strategy allowed one trader to limit losses when the market turned unexpectedly against them. After last Thursday's closing bell, Salesforce.com, ...
  7. Investing

    The Top 10 Hidden Factors Affecting Software Stocks

    Want to invest in software? Here are the most important factors affecting profits, revenues, and stock price of software companies
  8. Investing

    10 Industries Forever Changed By Mobile Apps

    Mobile apps and services have forever changed the way that some industries operate.
  9. Mutual Funds & ETFs

    Top Tools Every Financial Advisor Needs

    Becoming a financial advisor requires more education and hard work than is often assumed, but today's technology can relieve some of the burden.
  10. Personal Finance

    Using Social Media To Reach Customer Service Departments

    Companies are increasingly using social media and this provides customers with another channel to receive customer service.
RELATED FAQS
  1. Is good customer service something to look for in a company in which I am considering ...

    Learn about the importance of customer service when deciding whether to invest in a stock. Good customer service can ensure ... Read Answer >>
  2. How does a customer base dictate goodwill?

    Find out how a customer base dictates the value of the goodwill by providing a ready market for its products and spreading ... Read Answer >>
  3. How can small businesses manufacture demand?

    Create demand for a small business product or service by focusing on the brand and market. Continue to learn offer excellent ... Read Answer >>
  4. What does it mean when they refer to the churn rate of a telecommunications company?

    Learn what companies in the telecommunications industry mean when they refer to a churn rate, and discover tactics companies ... Read Answer >>
  5. Can companies insure their accounts receivable?

    Understand what credit insurance is and how it protects companies against payment problems they may encounter in trying to ... Read Answer >>
  6. What strategies do companies employ to increase market share?

    Learn how companies use innovation, customer retention tactics, smart hiring practices and timely acquisitions to increase ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center