Lecture 19

Customer Relationship Management

Customer relationship management (CRM) is a model for managing a company’s interactions with
current and future customers. It involves using technology to organize, automate, and synchronize
sales, marketing, customer service, and technical support. The Nature of Web, with its two way
communication features and traceable connection technology, allows firms to gather much more
information about customer behavior and preferences than they can gather using micromarketing1
approaches. Companies can measurer a large number of things that are happening as customers
and potential customers gather information and make purchasing decision.

Technology enabled relationship management

The idea of technology enabled relationship management has become possible when promoting
and selling via the Web. Technology enabled relationship management occurs when a firm obtains
detailed information about a customer’s behavior, preferences, needs, and buying pattern, and uses
that information to set prices, negotiate terms, tailor promotions, add product features, and
otherwise customize its entire relationship with that customer.

Technology enables relationship management is often called Customer Relationship Management

(CRM), technology enabled customer relationship management, or electronic customer
relationship management (eCRM). For years, businesses have viewed information as a part of the
value chain’s supporting activities, but they have not considered how information itself might be
a source of value. In the marketspace, firms can use information to create new value for customers.
Many electronic commerce Web sites today offer customers the convenience of an online order
history, recommendations based on previous purchases, and show current information about
products in which the customer might be interested.

Electronic Customer Relationship Management

The eCRM or electronic customer relationship management concept is derived from e-commerce.
It also uses net environment i.e., intranet, extranet and internet. Electronic CRM concerns all forms
of managing relationships with customers making use of information technology (IT). eCRM is
enterprises using IT to integrate internal organization resources and external marketing strategies
to understand and fulfill their customer’s needs. Comparing with traditional CRM, the integrated
information for eCRM intraorganizational collaboration can be more efficient to communicate
with customers.

1
It is a marketing strategy in which advertising efforts are focused on a small group of highly-targeted consumers.
Micromarketing requires a company to narrowly define a particular audience by a particular characteristic, and tailor
campaigns for that particular segment.
Types of CRM

Following are some types of CRM.

Sales force automation

Sales force automation (SFA) uses software to streamline the sales process. The core of SFA is a
contact management system for tracking and recording every stage in the sales process for each
prospective client, from initial contact to final disposition. Many SFA applications also include
insights into opportunities, territories, sales forecasts and work flow automation

Customer service and support

CRMs can be used to create, assign and manage requests made by customers, such as call center
software which help direct customers to agents. CRM software can also be used to identify and
reward loyal customers over a period of time

Appointments

Appointment CRMs automatically provide suitable appointment times to customers via e-mail or
the web, which are then synchronized with the representative or agent's calendar

Small business

For small businesses a CRM may simply consist of a contact manager system which integrates
emails, documents, jobs, faxes, and scheduling for individual accounts.] CRMs available for
specific markets for professional markets (legal, finance) are frequently touted for their event
management and relationship tracking opposed to financial return on investment (ROI)

Social media

Some CRMs coordinate with social media sites like Twitter, LinkedIn, Facebook and Google Plus
to track and communicate with customers who share opinions and experiences about their
company, products and services

Non-profit and membership-based

Systems for non-profit and membership-based organizations help track constituents, fund-raising,
demographics, membership levels, membership directories, volunteering and communications
with individuals.

Difference between CRM and eCRM

Major differences between CRM and eCRM are:

Customer contacts

 CRM – Contact with customer made through the retail store, phone, and fax.
 eCRM – All of the traditional methods are used in addition to Internet, email, wireless, and
PDA technologies.

System interface

 CRM – Implements the use of ERP systems, emphasis is on the back-end.

 eCRM – Geared more toward front end, which interacts with the back-end through use of
ERP systems, data warehouses, and data marts.

System overhead (client computers)

 CRM – The client must download various applications to view the web-enabled
applications. They would have to be rewritten for different platform.
 eCRM – Does not have these requirements because the client uses the browser.

Customization and personalization of information

 CRM – Views differ based on the audience, and personalized views are not available.
Individual personalization requires program changes.
 eCRM – Personalized individual views based on purchase history and preferences.
Individual has ability to customize view.

System focus

 CRM – System (created for internal use) designed based on job function and products. Web
applications designed for a single department or business unit.
 eCRM – System (created for external use) designed based on customer needs. Web
application designed for enterprise-wide use.

System maintenance and modification

 CRM – More time involved in implementation and maintenance is more expensive because
the system exists at different locations and on various servers.
 eCRM – Reduction in time and cost. Implementation and maintenance can take place at
one location and on one server.