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 about the privacy and safety of their personal information. Therefore, businesses need to ensure the storage and analysis of their customer data have 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 that a company can create a growing base of returning customers.
Increasingly, the term CRM is being used to refer to the technology systems companies can engage to manage their external interactions with customers at all points during the customer lifecycle, from discovery to education, purchase and post-purchase. With an estimated global market value of over $40 billion in 2018, CRM technology is widely cited as the fastest-growing enterprise-software category, which largely encompasses the broader software-as-a-service (SaaS) market. IT research and advisory firm Gartner predicted in a 2017 report that CRM will be the largest revenue driver of enterprise software spending by 2021. Five of the largest players in the CRM market today include cloud computing giant Salesforce, trading on the New York Stock Exchange under the ticker CRM, as well as seasoned technology corporations Microsoft, SAP, Oracle and Adobe Systems.
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.
CRM 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. Such systems boast heightened accessibility to customer information and eliminate the sometimes-complicated installation process involved with other CRM products or software. A May 2017 Gartner report estimates that by 2019, over 85% of new packaged customer service software will be delivered on a cloud-based model — a sharp increase from about only 10% in 2008.
The convenience of this type of system, however, has a trade-off. If a company goes out of business or faces an 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. Also, cloud-based CRM programs typically cost more than in-house programs.
CRM Human Management and Artificial Intelligence
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 must weed out any duplicate and incomplete records that may give employees inaccurate information about customers.
Despite this human need, industry analysts are increasingly discussing the impact that artificial intelligence applications may have on CRM management and the CRM market in the near future. A Salesforce-sponsored white paper, released in 2017, estimates that AI associated with CRM activities will boost global revenue from the beginning of 2017 to the end of 2021 by $1.1 trillion. Released by International Data Corporation, the white paper states that AI could strengthen CRM activities by speeding up sales cycles, optimizing pricing and distribution logistics, lowering costs of support calls, increasing resolution rates and preventing loss through fraud detection.
Tangible AI applications for CRM, however, are in the early stages of adoption, although Salesforce, SAP and Oracle, among other large CRM providers, have reported that they've begun to integrate AI components into their existing CRM systems.