Overview of Customer Relationship Management (CRM)

As Thomas Watson, Sr. once famously said, “Nothing happens until a sale is made.” CRM tools help companies understand- and anticipate- the needs of current and potential customers, increase sales and manage the sales force efforts.

CRM tools can address one or more of the following: operations, analytical, sales intelligence, campaign or collaborative customer interaction. While operational CRM is one of the more popular toolsets, your company’s choice of software tools will depend on the CRM tools implemented to meet your goals.

Key Benefits of Customer Relationship Management Solutions:

• Improve customer retention and loyalty
• Reduce inbound inquiries while improving customer satisfaction
• Identify and leverage high-value customers
• Improve operational efficiency
• Drive incremental revenue
• Gather real-time customer feedback for ongoing improvement
• Operational CRM

Operational CRM provides support to "front office" business processes, including sales, marketing and service. Each interaction with a customer is generally added to a customer's contact history, and staff can retrieve information on customers from the database when necessary.

One of the main benefits of this contact history is that customers can interact with different people or different contact channels in a company over time without having to describe the history of their interaction each time.
Consequently, many call centers use some kind of CRM software to support their call center agents.

Operational CRM processes customer data for a variety of purposes:

• Sales Force Automation
• Campaign Management and Marketing Automation
• Campaign management software is marketing-oriented CRM software that combines elements of Operational and Analytical CRM and allows campaigns to be run on an existing client base. Campaign Management is used when you need to create personalized offers when it is prohibitively expensive to personally contact each client. Campaign management software functions include:
• Choosing campaign recipients from the client base according to selected criteria
• Development of a campaign offer
• Assigning specific campaign offers to selected recipients
• Automatically sending offers to the selected clients via selected channels (either directly, via channels such as e-mail, or indirectly, by creating lists for use in channels such as direct mail)
• Gathering, storing, and analyzing campaign results (including tracking responses and analyzing propensities)

Sales Force Automation (SFA)

Sales Force Automation is a type of Operational CRM that is designed to automate sales-force-related activities, such as lead tracking, proposal writing, and sales reporting. These tools perform such tasks as:

• Creating leads
• Maintaining lead lists
• Assigning list segments to salespeople
• Contacting list via phone or e-mail
• Tracking responses
• Generating reports
• Tracking quotas
• Updating inventory status
• Order fulfillment

Analytical CRM

The Analytical CRM framework enables companies to improve the way they approach customers and to store, analyze and apply the knowledge it posses about its customers.

From marketing campaigns to customer behavior analysis, Analytical CRM can be used to analyze a variety of target areas, including:

• Design and execution of targeted marketing campaigns to optimize marketing effectiveness
• Design and execution of specific customer campaigns, including: customer acquisition, cross-selling, up-selling, retention
• Analysis of customer behavior to aid product and service decision making (e.g. pricing, new product development, etc.)
• Management decisions, e.g. financial forecasting and customer profitability analysis
• Prediction of the probability of customer defection (churn analysis)

Sales Intelligence CRM:

The data-driven Sales Intelligence CRM offers a similar toolset to Analytical CRM, but it is intended as a more direct sales tool. The Sales Intelligence concepts and methods are fact-based and transactional to support improved decision making by sales people.

Although it has been primarily used in manufacturing, distribution and wholesale, Sales Intelligence CRM can positively affect companies in most business sectors. With narrowly specialized features, such as delivery of alerts to sales people, Sales Intelligence CRM is based on the following:

Cross-sell/Up-sell/Switch-sell opportunities
Customer Drift
Sales performance
Customer trends
Customer margins

Collaborative CRM:

Customer Interaction System, also referred to as Collaborative Customer Relationship Management, coordinates the multi-channel service and support given to the customer by providing the infrastructure with responsive and effective support to customer issues, questions and complaints.

Collaborative CRM aims to collaborate among various departments within a business, such as sales, technical support and marketing, so that each may share the useful information that they collect from interactions with customers. Ultimately, the sharing of such information improves customer service. For example, feedback from a technical support center could be useful to share with marketing personnel about specific services and features requested by customers.