Thursday, November 29, 2007

Customer Relationship Management For A Higher Level Of Customer Service

For businesses large and small, their profitability and success depends upon customer retention, customer relationship enhancements and customer acquisition. This is often known as Customer Relationship Management or CRM. CRM is the managing of all business and interactions with customers. The main purpose of Customer Relationship Management is to allow businesses to better manage their customers through the introduction of reliable systems, processes and procedures for interacting with those customers. A good CRM program helps the business acquire customers and service the customers. Good CRM also helps retain good customers, and identify which customers can be given a higher level of service.

CRM is a complex mix of business processes, enterprise strategies and information technologies, which are used to study customers' needs and behaviors to help businesses develop more substantial relationships with them in order to get greater results.

In the late 90's, customer relationship management mainly consisted of just an index file, an answering machine and a telephone. Today, an advanced CRM system has evolved into an Excel spreadsheet and more. CRM systems normally consist of email and/or snail mail, marketing campaigns, contact manager programs, sales tracking program, and multi-media contact center or voice mail system.

A successful CRM strategy doesn't just mean simply installing and integrating a software package; it also involves a wider approach including modifying business processes based on the needs of customer, training of employees, adopting relevant IT systems and software, and IT services that allows firms to track their CRM strategies.

Good CRM software can help run an entire business by allowing companies to maintain all customer records in one centralized location that is accessible to the whole organization. Front line offices have systems that are set up to collect data from the customers for processing at the data warehouse where data is stored, orders are filled and tracked, and sales data analyzed.

One of the most common causes for customer relationship management system failure is poor data quality, which can be easily avoided. CRM systems are as useful as the information it provides. The old saying "garbage in, garbage out" can be applied to CRM data quality. To ensure good CRM data quality, be sure to input the data accurately; check data entries twice to minimize the possibility of duplication; if there is an error in the provided information or if the information is not complete, then re-establish contact with the customer to recheck the data. Customers generally do not get annoyed at this; instead it makes them more appreciative of the extra customer service.

For a more comprehensive look at CRM visit Susan also enjoys writing at

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Customer Relationship Management

The precise definition is Customer Relationship Management, in reality it means changing the focus of your business to become customer centric. Funny thing about that statement is most organizations believe they are already customer centric. Yet a great percentage of businesses both large and small haven’t committed to building long term relationships with their customers.

After being in the CRM industry for ten years, here is my definition: CRM is about engineering your company, it business processes, departments, workflows, customer service, and marketing, products and business intelligence for the benefit of increasing customer loyalty, and longevity. A properly implemented system can offer a ROI of up to over 900% or more in a two to three year period.

Let me say that CRM is not a box of software, some computers and a telephone. It is not a task you hand to your IT/MIS department and say lets do this!. CRM requires a knowledgeable consultant to help design, implement, customize, the CRM tools, and help train your staff on how to use the system.

An immediate analogy is the CRM consultant is much like the architect of home. It is spending time with the clients, learning the lifestyle of the customer, how the home will function, what amenities, décor and the esthetics, and of course budget of their clients. It is only then the architect will develop a blueprint, and maybe a model of the house.

You can try to build your house without a sound blueprint, and you may even end up with something that sort of looks like a house, but oops what happened to the second bathroom? What happened to the garage? Well you get the idea. It certainly wouldn’t be considered a good house.

I got my start in CRM at an early age. I worked for a finance company that made small loans to mostly blue collar families in Indiana. Our particular office made 6-8 loans each and every day. Most of our customers could easily qualify for such small amounts (usually $1000 to $3,000) with their local bank or credit union. The interest rates we charged were as high as 36%. Yet our office grew, and was extremely profitable because our customers came back time after time. Why you ask; because, we knew our customers on a very personal level. We knew their families, what they did for a living, we offered loans with custom payment schedules, and we were there when our customers needed us. We had relationships with our customers.

As I went into business on my own, I wanted to use computer technology that would not only help grow my business with new clients, but also generate referrals, and allow us to up sell, cross sell, and earn repeat business. It would take a lot of time and investment, trial and error until I figured out a winning combination. At the time in 1989 you just couldn’t go out and purchase a CRM package. The idea didn’t even exist then. I began with a copy of a database called Corner Stone written for MS DOS.

At the time it was state of the art, and a huge investment. Other associates of mine asked why not use a rolodex? What am I going to do with that data anyway? It was if just building a database of my customers was an foreign concept to them. I mean computers were just beginning to show up in offices to run Visi Calc (a spreadsheet application), and WordStar (a word processor).

I grew my mortgage brokerage and eventually “ACT!” came into the market. We installed it and used it with varying successes. We then moved on to a product called GoldMine, which was a much more robust system. It was then that I decided that I wanted to get into the CRM business and become GoldMine consultant.

That decision has led me down a path of spending a great deal of time learning what CRM is and what it is not. I have had the opportunity to work with some of smartest sales and marketing experts in the world and within a short period of time become one of GoldMine’s most successful resellers in the western states.

I left the world of GoldMine in 2001, for another business venture, but kept up with the changes in the industry. When Microsoft entered the business with their CRM tools I was impressed. Microsoft CRM in my opinion offers that toolset that allows a CRM consultant to offer a easy to use, extensible, application to help our clients realize a successful CRM project.

Bruce Naylor has been a CRM and IT specialist since 1985. Bruce and his wife Cindee founded Sales Automation Group in 1997 as a GoldMine VAR. They quickly grew the business to platinum level status. Bruce sold the company in 2001. In 2006 Again, Bruce and Cindee opened a new IT firm called The company currently works to provide Microsoft small business solutions, as well as GFI network, and fax based products.

Bruce Naylor has been a CRM consultant since 1997. You can contact him at (260)-724-2748

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Customer Relationship Management

What is CRM?

Customer Relationship Management (CRM) combines business strategy and technology to identify, acquire and retain profitable customer relationships. CRM creates a comprehensive picture of a customer across all channels by analyzing information collected during every transaction and interaction (such as purchases, support calls, returns, and other activities). This multi-dimensional analysis reveals a wealth of customer information. Some customers are more valuable than others, so organizations must maximize their marketing, product and service investments based on a customer's true value to the company. Better Management presents extensive resources on Customer Relationship Management topics to help you develop strategies for optimizing your customer relationships.

Goals of CRM

1) Grow customer revenue and profitability over time.
2) Increase customer satisfaction and loyalty by providing better customer service.
3) Optimize management of customer life cycles.
4) Improves the efficiency of your sales and technical staff.
5) It allows easy access to customer service records, contact information, assigned assets and sales development.

Customer Relationship Lifecycle

There are three major areas that focus on customer satisfaction,

1) Sales.
2) Marketing.
3) Service.

The professional sales force predicts and proposes the real-time analysis of information and distributes this information to the company and business partners.Marketing concentrates on personalizing customer preferences and offering them satisfying experiences.Service is associated with the companies' call centers and coordinates interaction between web, e-mail, and other communication Medias.

Customer Management Tools

1) E-mail, telephone, and postal mail.
2) The Internet should be one of your primary tools for sales research. News articles, financial statements, and the company web site are often excellent indicators of what kind of business your customer is really doing.
3) Promotional materials like a mouse pad or t-shirt with your company name will serve as a subtle of your relationship.

How much does CRM cost?

A recent (2001) survey of more than 1,600 business and IT professionals, conducted by The Data Warehousing Institute found that close to 50% had CRM project budgets of less than $500,000. That would appear to indicate that CRM doesn't have to be a budget-buster. However, the same survey showed a handful of respondents with CRM project budgets of over $10 million. License fees for a typical web-based CRM solution range from 60-$80/month per user. However, the major costs associated with CRM are not the license fees, but the time an organization spends keeping the CRM system current. With many CRM solutions, the value of the time invested keeping the system current is 10X the CRM license fees. Low user acceptance is often challenging as it is difficult to get teams to give up existing processes. This is particularly true when the alternative requires an additional 30-60 minutes of data entry each day.

What causes CRM projects to fail?

The lack of a communication between everyone in the customer relationship chain can lead to an incomplete picture of the customer. Poor communication can lead to technology being implemented without proper support or buy-in from users. For example, if the sales force isn't completely sold on the system's benefits, they may not input the kind of demographic data that is essential to the program's success. One Fortune 500 company is on its fourth try at a CRM implementation, primarily because its sale force resisted all the previous efforts to share customer data.

Current Developments and news of CRM

*Quantum Corp., a storage provider, announced it has received two distinguished awards for achieving excellence across all key aspects of the customer experience through its service and support programs.

*For the second year in a row, Quantum has won a NorthFace ScoreBoardSM Award for exemplary customer service from Omega Management Group Corp.

*Quantum also has been honored as the winner of a Service & Support Professionals Association (SSPA) 2006 STAR Award for Best Practices.

*COMET Group Selects Kaidara to Enhance Customer Service and Support.


Customer relationship management today is about tracking and analyzing explicit information on current customers as well as sales prospects. CRM software needs to be deployed in a rigorous, disciplined, coordinated manner to achieve any promised potential.

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Customer Management Relationship

The catch phrase of the 1990s, Customer relationship management, was an instant darling of large and medium business houses, which in theory promised to develop and manage a happy and cordial relationship with customers. Now a decade and more into customer relationship management, organizations are slowly realizing that the unwieldy process is no longer easy to handle easily, as they initially thought, and forging a relationship forever is not gaining ground.

The reasons for the slow progress of this magnificent management tool are not very difficult to understand, although it has taken years to dawn on the organizations. However, fundamentally, the theory of CRM, customer relationship management, is still the wonderful formula for insuring your customer base. Let us see the two biggest stumbling blocks on the road to successful customer management relationship.

Two of the Biggest Stumbling Blocks to CRM
1. The success of customer relationship management depends on whether each interaction of customers with the organization was satisfying enough.
2. The cumbersome process is cost ineffective and unfriendly to maintain and track product and user data accurately

However, software managed databases are coming close to inject efficiency with advanced features to track have changed the face of CRM vastly. Nevertheless, the recent advent of internet technology has proven to take CRM to an altogether different plane wherein customer can instantaneously interact with automated answer banks and/or a customer support executive.

So, What Is the Basic Structure of Automated CRM?
To make things simple, let’s take the three core structural elements of an automated CRM. These three can be enumerated as: 1) Operational structure, to automate the fundamental business processes like marketing, sales, and service; 2) Implementing analytical technology to support customer behavior analysis and finally, 3) Cooperative approach to ensuring customer contact through media such as web, phone, SMS etc.

Software based CRM brings in certain cutting edge advantages.
1. Round the clock and 365 days information delivery on products/services, usage, problem solving over the web.
2. Automated scheduling of sales and service calls
3. Automatic guidance to typical problems
4. Interactive web tools allow customer define quality and/or problems
5. Easy tracking of repeat customers facilitate quicker identification

Still There Is Shadow beneath the Lamp
As business world is moving towards ironing out lacunae, there still remains lot of things to attend to. Not all the customers who emailed to customer departments are satisfied. The general complaint is the quality of service remained the same despite interactive websites. Whosoever is answering the emails still has the traditional supportive back office works to do. Another point that could be sighted here is the bane of automated email reply.

The bottom line, however is, come what may, CRM is here to stay.

NamSing Then is a regular article contributor on many topics. Be sure to visit his other websites CRM Solution, Free Sample Business Letter and One Stop Information

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Friday, November 23, 2007

Customer Relationship Management System

Customer Relationship Management Systems is a tactical and strategic tool. If used correctly, this tool can forecast trends and help a company with the top and bottom lines. Today, many businesses do not look the same as they may have many years ago. They have definitely left their core competency to move onto something more profitable. The internet and information technology have made that possible.

General Motors and eBay are two companies who have reduced focus from their original purpose to reflect financing. They have both learned that keeping the customer in debt through interest bearing finance for longer periods of time is more beneficial to the business. Another example is from the best seller Good to Great. This book lists Kimberly Clark as a successful company that thrived in a dying industry. This company moved from being a supplier of coated paper to consumer goods like Huggies and Kleenex.

How did these companies transform to this kind of success? I believe it was from a keen insight into customer relationship management. Even at its primitive form, before current software availability, the astute business leaders recognized the trend in the market place. It wasn’t hard for the visionaries at places like GM, eBay and Kimberly-Clark to see the potential for huge profits. Like many explorers and adventurers, each of the CEOs and other leaders received harsh criticism and ne’er do wells from peers and medial alike. Many engrained in tradition expressed disappointment. The leaders were left with dreams, plans, execution and the true possibilities displayed in sales history, demographics, profiles, and shifts in buying trends.

This CRM uses sales force automation to expedite sales and assist the sales force, customer service and support to align sales with suppliers, and marketing management and analysis to find the market. These interact to align the business with customers’ needs and meeting them more promptly at the point of sale.

With evolving technology and high tech consumers, we can expect many more companies to leave their original core competencies to ones that earn them more money with fewer costs. Much business is growing on-line. Without the proper risk of visionaries, and data used properly from CRM a company may die in its antiquity.

About the Author: Jeffrey W. Bennett is the Founder and director of LayMentor Ministries. This ministry is dedicated to training church and other volunteer leaders to be more effective. Jeff speaks and writes on similar concepts taught in most MBA courses and makes it easy to adapt to all leadership levels. The volunteer drives our churches and communities and the impact can be amazing. For PowerPoint presentations of this article, visit He is also the author of the Missionary/Adventure novel Under the Lontar Palm available on line at or in major and online bookstores.

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Tuesday, November 20, 2007

About Customer Relationship Management

Customer relationship management (CRM) encompasses the capabilities, methodologies, and technologies that support an enterprise in managing customer relationships. The general purpose of CRM is to enable organizations to better manage their customers through the introduction of reliable systems, processes and procedures.

Customer relationship management is a corporate level strategy which focuses on creating and maintaining lasting relationships with its customers.

CRM, in its broadest sense, means managing all interactions and business with customers. This includes, but is not limited to, improving customer service. A good CRM program will allow a business to acquire customers, service the customer, increase the value of the customer to the company, retain good customers, and determine which customers can be retained or given a higher level of service. A good CRM program can improve customer service by facilitating communication in several ways:

Provide product information, product use information, and technical assistance on web sites that are accessible 24 hours a day, 7 days a week.

Identify how each individual customer defines quality, and then design a service strategy for each customer based on these individual requirements and expectations.

Provide a fast mechanism for managing and scheduling follow-up sales calls to assess post-purchase cognitive dissonance, repurchase probabilities, repurchase times, and repurchase frequencies.

Provide a mechanism to track all points of contact between a customer and the company, and do it in an integrated way so that all sources and types of contact are included, and all users of the system see the same view of the customer (reduces confusion).

Help to identify potential problems quickly, before they occur.

Provide a user-friendly mechanism for registering customer complaints (complaints that are not registered with the company cannot be resolved, and are a major source of customer dissatisfaction).

Provide a fast mechanism for handling problems and complaints (complaints that are resolved quickly can increase customer satisfaction).

Provide a fast mechanism for correcting service deficiencies (correct the problem before other customers experience the same dissatisfaction).

Use internet cookies to track customer interests and personalize product offerings accordingly.

Use the Internet to engage in collaborative customization or real-time customization.

Provide a fast mechanism for managing and scheduling maintenance, repair, and on-going support (improve efficiency and effectiveness).

The CRM can be integrated into other cross-functional systems and thereby provide accounting and production information to customers when they want it.

Ismael D. Tabije is the Publisher-Editor of, a unique niche-topic article directory that features exclusively business and management topics. For a large dose of customer relationship management tips, ideas and strategies, see .

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What Is Customer Relationship Management?

Customer relationship management, or CRM, refers to reliable systems, processes, and procedures that allow companies to better manage customer relationships. It is a corporate level strategy that focuses on creating and maintaining effective communication with its customers. Ideally, a sound CRM strategy should develop an end-to-end process that encompasses sales, customer service, and marketing.

A successful customer relationship plan can manage all business-related operations and interactions with customers simultaneously. It often includes special software programs, called CRM programs, which aid companies in tracking and organizing their customer base.

Customer relationship management is just that: learning ways to manage the happiness of your customers by giving them what they want, increasing the effectiveness and profitability of your product or service by adapting them to customer preferences, and creating communication channels between sales reps, sales managers, and the customers they serve.

What are some ideas for successfully implementing a customer relationship management strategy?

There are numerous ways to successfully implement an effective CRM program. Here are some ideas that will start you thinking about the ways you can create a richer and more truly customer based culture. You can improve, adapt and reform your customer relationship plan by such methods as:

• Providing product information and support via a hotline or a website. This would allow customers to better use and understand specific products or services, and get any technical answers they need;

• Creating custom applications that offer point-and-click customization, real-time analytics, ease of use, tracking of all contact points between customer and company, and fast online and offline access to data;

• Implementing a mechanism to quickly schedule and manage follow-up sales calls and create clear, well-built information pipelines and channels of communication;

• Creating a simple, easy and intuitive user interface that is friendly to computer experts and neophytes alike. Thus, even those reps who feel uncomfortable using a computer could easily go online and check out statistics and other information;

• Devising a quick system for correcting service problems before they affect other customers, answering customer questions or complaints, and handling any other problems that might arise.

How does customer relationship management actually improve a company's relationship with its clients?

CRM improves relationships between customers and companies because it allows a company to meet the needs of the customer by keeping track of their interests and improving products and services accordingly.

For example, if a company implements a customer relationship management technology program for a specific product, they can track how much the customer uses the product and how much they repurchase it, allowing the company to grow and adapt the product to the customer's needs.

Used correctly, a solid CRM program can increase customer loyalty, decrease the customer turnover rate, decrease marketing costs, and increase revenue and profits. Essentially, it greatly improves the way your company and sales reps or other professionals do business with customers.

What technical functions should a customer relationship management program have?

A CRM program should have the ability to interface with users through mobile phones, internet, and other similar communications channels. It should also take into account workflow and have the ability to assign sales requests, sales opportunities, and other such assignments to groups or an individual. More importantly, it should be scalable and easily expandable over a very large or small scale.

This means that as long as the customer relationship management system is properly programmed, everyone from the smallest business to the largest corporation should be able to implement an effective CRM strategy.

Implementing an effective and efficient customer relationship management system is the best way to increase consumer confidence in your product or service and stay in touch with your customers, thereby increasing the effectiveness of your product or service.

Diane Newsom writes for a leading producer of CRM software and customer relationship management information.

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What is CRM, Customer Relationship Management?

CRM stands for Customer Relationship Management (CRM).

It’s hard to find a definitive definition of what CRM means. So I’ll outline the broad meaning and then give some examples.

You may have heard of the terms CRM and Customer Relationship Management in regards to software. Well CRM is not just a piece of software. It’s more than that.

The CRM Customer Relationship Management software is a vital component, yet the whole business needs to understand CRM Customer Relationship Management in all departments and functions of the business and behave appropriately to make CRM Customer Relationship Management work.

An effective CRM Customer Relationship Management will include methodologies, strategies, software, and web-based capabilities that help an enterprise organize and manage customer relationships.

Why use CRM Customer Relationship Management?

CRM Customer Relationship Management is used to help businesses (a.) understand their customer, and (b.) understand their customers’ wants and needs and (c.) help the business serve them more efficiently and effectively

In turn this will help the business to improve customer satisfaction, increase staff productivity, slash operational costs and maximize the effectiveness of each customer interaction.

Let’s talk about these three different areas.

CRM Customer Relationship Management to understand the customer

In a CRM Customer Relationship Management application and approach a user will collect as much information about a customer that they can. They’ll collect names, addresses, contact numbers, age, sex, number of children etc. A CRM Customer Relationship Management process does this to, amongst other things; help ‘classify’ their customers.

A benefit of a CRM Customer Relationship Management system is that a user can help analyse which types of customers are best for their business.

Then once they know what customer ‘types’ are best they can then market to them in a ‘personal’ way – using the information gained about them.

CRM Customer Relationship Management to understand the customers wants and needs

As information is collected about the customers’ personal life, information is also collected about their buying habits and stored in CRM Customer Relationship Management software.

Humans are creatures of habit. By analysing the information collected about the customer and their buying habits the CRM Customer Relationship Management can be used to help the business identify what the customers would most likely want or need to buy.

For example, if your CRM Customer Relationship Management information lets you know that your best customers typically like buying ‘red apples’ in November for an average sale price of $15. You can prepare a marketing approach that is sent out to them prior to November that will steer them towards buying $30 worth of apples.

The customer sees it as useful because it’s something they like to do at that time of year, and you’re offering them a reminder and perhaps an incentive to buy more. The business benefits by structuring the offer to increase the sales value and therefore increasing the profit return.

CRM Customer Relationship Management is useful to also target new customers

Information gathered in the CRM Customer Relationship Management will help the business to target more of the preferred customers. An analysis using CRM Customer Relationship Management software could tell the business, for example, that single males between 30 to 35 years of age that earn between $50,000 and $60,000 are the best type of customer for the business.

Knowing that information from the CRM Customer Relationship Management, the business can then hire a list from a direct mail list broker of all the single men that fit the description and target their marketing towards them.

The CRM Customer Relationship Management activity of improving the relationship with the customer is to help keep the customer more loyal to the company and thus improve the profitability of the business.

CRM Customer Relationship Management to help efficiency and effectiveness of business

A good CRM Customer Relationship Management application will help the business to become more efficient and effective.

The business can become more efficient because if a customer contacts the business, within seconds the customer service representative can produce the customers file. This will tell the employee all about the customer and their interaction with the business.

So a CRM Customer Relationship Management saves time for the business and is able to help the employees deliver high levels of personalised service.

A CRM Customer Relationship Management software program and approach can help the business become more effective. An example would be marketing.

Knowing all the information about the customers, the marketing strategies can be targeted towards the customers in a personal way. Thus marketing to a defined target market with a past history the potential of improved results is far greater than marketing to a ‘cold’ list.

This article should only be viewed a very broad overview of what CRM Customer Relationship Management is.

On this website you’ll find more detail and resources to help you understand and use CRM Customer Relationship Management for your business.

Casey A Gollan, The Business Growth Specialist for CRM Software Center - CRM Software Center- All the general information and resources for everything CRM - Customer Relationship Management. Visit for more articles and info on CRM.

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Tuesday, November 13, 2007

What Exactly is Customer Relationship Management?

The defintion of Customer Relationship Management (CRM) that I favor is "CRM is the business strategy that aims to understand, anticipate, manage and personalize the needs of an organization's current and potential customers"

From this we can learn that CRM is more than just a piece of software; CRM is a business strategy, one that puts the customer at the heart of the business.

“That’s nothing new” I hear you say, and you would be right. Good business people have always understood the relationship between happy customers that come back again and again and creating long term, sustainable profitability.

You just have to think of the local shop owner who knew everyone of his customer’s names, birthdays and particular ailments to prove that point. What is new is that there now exists the technology to enable this customer-centricity on a much larger scale.

It is said that a successful CRM implementation will allow your Customer Service, Sales and Marketing people (and anyone else in your organization) to have a holistic view of each and everyone of your customers. In theory this will enable them to make quick, informed decisions, create cross selling and up selling opportunities, measure marketing effectiveness and deliver personalized Customer Care.

Sound’s great doesn’t it!

The History of CRM

Following on from Enterprise Resource Planning or ERP (the business strategy that promised to automate the “back-office”), the term CRM was first coined in the mid-1990s. CRM in those days referred to the software used to help businesses manage their customer relationships. From sales force automation software (SFA) that focused on customer contact management to integrated knowledge management solutions, these were the early foundations of CRM.

The last couple of years have seen the term broaden to encompass a more strategic approach and the investment of billions of dollars worldwide into CRM solutions and services has followed.

First Things First

Successful CRM always starts with a business strategy, which drives change in the organization and work processes, enabled by technology. The reverse rarely works.

The key here is to create a truly Customer-Centric philosophy that touches every point and more importantly every person in the company. From CSR to CEO everyone must live and breathe customer focus for all of this to work.

At the same time you should look at your which processes could be re-engineered to make them more effective for your customers. Until you have done this, put away your chequebook!

The Right Technology

It is estimated that the global market for CRM services and solutions is currently worth $148 billion. That means a lot of choice when selecting your technology - from web-based solutions aimed at small businesses with less than 10 employees to solutions suitable for multi-national enterprises with millions of customers.

The Future

CRM has already made a big impact in the world of Customer Service and will continue to do so. As more and more companies become customer-centric those that fail to do so will lose competitive advantage. As technology increases to develop at a startling rate the key emphasis will be how we can fully utilise it within our business.

However let's not lose sight of the fact that Customer Relationship Management is about people first and and technology second. That’s where the real value of CRM lies, harnessing the potential of people to create a greater customer experience, using the technology of CRM as the enabler.

CRM may or may not prove to be the answer to providing excellent customer care, but the philosophy of putting customers at the heart of our business is definitely a step in the right direction.

Ian Miller is Editor of The Customer Service Manager - An online resource for Customer Service Managers and professionals. On the CSM website you can read about the latest customer service trends, make use of useful management tools and sign up for a free customer service newsletter. Visit for more details.

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CRM - Customer Relationship "Management" Is a Myth

Now that Peter F. Drucker has passed on, I feel almost duty bound to share some of his insights with you, little observations, pointers and gems that simply aren’t in his books or popularly known.

I had the pleasure of studying with the management sage for two and a half years. Much of the MBA I did at the Drucker School of Management, named in his honor, in fact, was in classes with Drucker, himself.

And I had the pleasure of serving as his informal chauffeur on Saturdays, when many of our classes met.

So, we talked.

He was fond of admonishing us to “invest in the customer” and specifically, to “invest in the customer relationship,” because it is one way to get clients to select and to prefer us, a very valuable habit.

But to my knowledge Drucker never called the process customer relationship MANAGEMENT.

In fact, on many occasions he said relationships are fundamentally UN-manageable.

His fondest example was one’s family. He said, “You can’t apply management principles to your family; they won’t work.”

When I told him about the arrival of my first daughter, he reminded me of this notion and then asked: “Is she ruling the roost?”

“Yes,” I replied, “She has us all at her beck and call.”

“That’s the way it should be,” he beamed.

If you’re managing a person, you probably have something different than a real relationship, like an employment contract, or some other sort of business commitment or alliance.

But interpersonal relationships have their own dynamics. Power, for one thing, is shared. We cannot order a customer to come back and buy again, just as we can’t order our relatives to love or respect us.

We can use persuasion, guile, charm, guilt, and incentives, but we can’t MANAGE that outcome as we can manage a salesperson, say by telling him he has to hit his quota this quarter, or hit the highway.

If we aren’t managing customers what are we doing?

We’re NEGOTIATING relationships. There is give and take, concessions are made, and equities are balanced out, if not in the short run, then in the longer term.

All of this is fine, you might be thinking, but what practical difference does it make if we call it CRM or CRN, for negotiation?

Management is a term that signifies superior power and resources.

When we interact with customers we are facing the opposite of being in power. We’re relatively powerless, providing we’re operating in a competitive marketplace.

Customers have choices. They can more readily and inexpensively say “no,” and walk away from a deal.

When we consider customer transactions and the residue of doing many of them, it would be more advantageous to see our counterparts as ongoing negotiation partners, but never as friends, peers, or family.

In non-business interpersonal relationships, the whole is greater than the sum of its parts; in business, there are only parts, no enduring “marriages.”

The sooner we straighten out the otherwise mystifying rhetoric ushered in by CRM, the better off we’ll all be.

Dr. Gary S. Goodman is the best-selling author of 12 books and more than a thousand articles. His seminars and training programs are sponsored internationally and he is a top-rated faculty member at more than 40 universities. Dynamic, experienced, and lots of fun, Gary brings more than two decades of solid management and consulting experience to the table, along with the best academic preparation and credentials in the speaking and training industry. Holder of five degrees, including a Ph.D. from the Annenberg School For Communication at USC, an MBA from the Peter F. Drucker School of Management, and a law degree from Loyola, his clients include several Fortune 1000 companies along with successful family owned and operated firms across America. Much more than a “talking head,” Gary is a top mind that you'll enjoy working with and putting to use. He can be reached at:

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Monday, November 5, 2007

New Trends in Customer Relationship Management

Customer relationship management is also known as CRM and it deals with the way companies and organizations treat their customers and their personal information. This includes how companies handle phone numbers, addresses, email addresses, as well as how they store them, and even analyze them. Few people really think about how a company handles this type of information but it really is important for companies to know who their customers are and where they come from so they know how to better target their market.

There are several different aspects of CRM. These include operational CRM, collaborative CRM, and analytical CRM. Operational CRM simply is the support or the automation of the processes that related to service reps or sales. Collaborative CRM deals with self service and direct communication. Analytical CRM is kind of the way it sounds as it deals with analyzing customer data for many different reasons. Recruiting software is frequently used to handle some of these tasks or to be used in conjunction with these tasks.

Job management is also an important part of customer relationship management because individuals working in an organization or in a company need to be properly trained in CRM so that the information may be taken and processed correctly. It takes some time to learn but when done correctly CRM works very well. In fact, many companies and organizations choose to use the same software for their CRM as their recruiting management software. It’s a wonderful way to integrate the both types of software and jobs altogether.

The technology behind CRM is very complex and difficult to understand. There are some basic tools that relate to CRM. These include databases or a data warehouse, customer agent support software, customer interaction systems, automated phone systems, statistical analysis software, and interactive chat software. These building blocks are the basics for the three different types of CRM, however this is not an all inclusive list. But, when you understand the basics of CRM then you will have a better understanding of how it all works. Of course, you can’t just understand all the details by reading this article but you can get a better understanding of all that goes into CRM and why it is so important to companies and organizations.

Caitlina Fuller is a freelance writer. Analytical CRM is kind of the way it sounds as it deals with analyzing customer data for many different reasons. Recruiting software is frequently used to handle some of these tasks or to be used in conjunction with these tasks. In fact, many companies and organizations choose to use the same software for their CRM as their recruiting management software.

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Thursday, November 1, 2007

What is Customer Relationship Management (CRM)?

Customer Relationship Management (CRM) is a phenomenon that is becoming a major discipline within business. CRM can be traced back to the airlines’ attempt to gather information about their customer flying habits in order to stop their high-fare airliners choosing low-fare carriers, however, the concept was invented even further back, when the shop owner knew all his customers by first name and they knew his name. In 1998 The Economist Intelligence Unit (EIU) in conjunction with Andersen Consulting published the result of a CRM survey of different companies around the world. The survey revealed a new heightened focus on CRM as a discipline, where companies increased their customer focus and using a process approach to customer relationship management. This was a market shift from the traditional transaction-based and functionally managed approach where the relationship with customer was divided up and dealt with by different departments. The EIU report also showed that between 1994 and 1997 the spending on customer relationship management software and services grew from $200 million to $1.1 billion in the USA. The EIU report is one of many investigations that indicate a growing interest in CRM and some literature concerning CRM even postulate that companies will have to adapt it to survive.

Several researchers define CRM differently. Couldwell defines CRM as:

“Customer relationship management is a combination of business process and technology that seeks to understand a company’s customer from the perspective of who they are, what they do, and what they like”

and Hobby, defines CRM as:

“A management approach that enables organisations to identify, attract and increase retention of profitable customers by managing relationships with them".

However, I have found the following definition of CRM, to be the most adequately:

"CRM is a business strategy - an attitude to employees and customers - that is supported by certain processes and systems. The goal is to build long-term relationships by understanding individual needs and preferences - and in this way add value to the enterprise and the customer".

This definition places the strategy of adding value to the customer in the focus, whereas the first mentioned definition gives technology and processor first priority. As the chosen definition explains, the systems and processes are vital support elements in creating value for the customer. The second-mentioned definition is found to be somewhat thin and practical useless but it notice an important aspect of CRM, that the organisation has to learn how to listening to customers. In the definition, CRM is defined as a business strategy. This is an important aspect, as CRM is not to be seen as a concept or a project but as a business strategy, which affects all parts of the company.

CRM is about identifying, retaining, and maximising the value of a company’s customers. CRM is a sales- and service business strategy where the organisation wraps itself around the customer, so that whenever there is an interaction, the information exchanged is relevant for that customer. This means knowing all about that customer and what the profitability of that customer is going to be. CRM is an effort to create the whole picture of a given customer, bringing together consistent, comprehensive and credible information on all aspects of the existing relationship, such as profitability information, risk profiles and cross-sell potential.

To keep customers satisfied and make them return, CRM, as a strategy, is not a new phenomenon. Every company wants profitable and loyal customers. The new aspect is that companies start to measure this profitability and loyalty and use this information to segment customers and develop strategies for approaching these customers.

However, before implementing CRM, companies need to have some basic foundations settled. First of all, the basic quality of the products has to be in order, i.e. if the product does not live up to the expectations of the customer, he will not be satisfied, hence loyal for long. The typical strategies prior to CRM are quality control systems such as Total Quality Management (TQM). Secondly, companies also have to know more about their customers before implementing CRM. I.e. they have to evaluate, which customers are most valuable in terms of profitability, loyalty and future expectations. Thirdly, the companies have to have the necessary technology to enable the employees to access information about customers in order to offer customers the best service. Finally, CRM needs full support from the management of the company to stand a chance of success.

Rasmus Nielsen has specialised in CRM for several years and been consulting to various companies in Denmark and Australia on the topic. Rasmus also holds a M.Sc. International Business Economics

Other Articles by Rasmus Nielsen

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