Question

1) Define what a CRM system is and explain its main characteristics and components. From your point of view, what are the added values and benefits that a CRM system provides to a given firm?

Please write in details as much as possible

Answer 1

CRM (Customer Relationship Management)

Customer Relationship Management refers to the approach that focusses on managing or analyzing the relationships and interactions of the company’s past, current, and future customers. Adopting the best CRM technique helps the organization to improve business relationships and profitability by streamlining the processes and staying connected to customers. CRM system is a tool that helps companies to deal with sales, marketing, and service management by acting as a system of record for the contacts and accounts of the customers throughout their lifecycle.

Characteristics of CRM:

• Easy integration and use: CRM helps to access the data with ease and hence a lot of work is not needed to be put upfront while working on it. A CRM developed with an intuitive interface and good user support helps the employees to easily get adapted to the new system.
• Followup reminders: CRM systems give a reminder to followup with the follow-ups, pending deals that need to be made to the customer n order to generate sales or just to make the customer feel valued.
• Employee tracking: When dealing with a large sales force, it is not easy for the manager to identify which sales executive is dealing with which set of customers. Hence the CRM system helps to track their sales executives whether they are really going after the customers or they are just wasting time in the company. The reporting is also made easier when the sales force is always on the field and does not have time to come to the office to participate in the weekly meeting.
• Social media integration: With most of the customers available on social media, it is easier to integrate them along with the company to facilitate communication. Some businesses like BookMyShow, Make My Trip uses social media platforms to provide customer service.

The main components of a CRM system are:

• People Management: Employees playing a crucial role in the organization needs to be managed effectively in order to develop and implement strategies for the organization’s growth and development.
• Customer Service: Customer details are collected along with their purchase pattern which is then shared with the relevant departments. This component helps in taking the appropriate steps in developing awareness and understanding based on customer needs or complaints.
• Salesforce Automation: Salesforce plays an important role in generating revenue for the company. Hence it is important for the company to manage them effectively by analyzing the sales forecasts and determining performances by the workforce.
• Lead Management: The lead management helps to track the potential leads based on which campaigns and other promotional strategies can be implemented. Such activities maximize the sales leads which are then converted into sales.
• Marketing: The CRM helps in assisting the marketing department to identify whether the strategies they have developed exhibit positive or negative results. It includes Document Management, Call Management, Mass Emails, etc.
• Workflow Automation: The CRM helps in automating or streamlining the different processes that are related to customer management in order to improve the overall efficiency.
• Analytics: Analytics involves analyzing and presenting the data that are collected which are then worked on to make important decisions. Analytics involves graphical representations like the bar graph, pie chart, etc., through which the existing data are compared with the previous data or with the data of the competitors.
• Reporting: Accurate and precise reports are generated with the help of the CRM which are then used to forecast and to identify the exact position of the company in the market.

In this fast-moving environment, the need for technology plays a crucial role in each and every aspect of the business. Customers need to be managed with the utmost care to avoid losing them with competitors or substitute products. Hence in order to satisfy them and to make them stay local to the company, CRM is much needed. It helps the organizations to manage a wide range of customers with ease and it also integrates with the other departments of the organization to fasten the marketing process. For example, a particular marketing campaign may need additional cost to proceed. With the help of the CRM, the paper works with respect to the approval of the additional cost is made easier by involving the finance department through the CRM system. Customers tend to make purchase decisions in the same company only if they are satisfied with the attributes of the product and the service. If the customer service fails, even the company that offers the best product may lose its customers to the competitors. With the help of CRM, regular contact is maintained with the customers. This not only helps in cross-selling but also improves the word of mouth by recommending them to the others.