What is CRM?

Customer Relationship Management, or CRM, is an information technology industry term for methodologies, strategies, software, and other web-based capabilities that help an enterprise organize and manage customer relationships. For example, "if a marketing department runs an outbound campaign, all of the information about the customers and the program should be retained for the sales staff to follow up on, the customer service representatives to answer any queries, and technical support to provide any field support. The idea is to have the same information available to all in the company so that every product or service need of the customer is met. CRM implies that everyone in the enterprise is focused on the customer."

Brief History of CRM

With the advent of e-commerce comes the e-customer. According to Vantive, a customer relationship management solutions provider that was acquired in 2000 by enterprise resource planning (ERP) software company PeopleSoft, the e-customer expects constant access to a company through e-mail, call centers, faxes and Web sites. Customers demand immediate response with a personalized touch. Meeting their needs puts new demands on the enterprise. Since traditional ERP applications did not include a customer management aspect, CRM was the logical next step.

Trends behind CRM

1. As global competition has increased and products have become harder to differentiate, "companies have begun moving from a product-centric view of the world to a customer-centric one," says Boston University professor Thomas H. Davenport.
2. Technology has ripened to the point where it's possible to put customer information from all over the enterprise into a single system. "Until recently, we didn't have the ability to manage the complex information about customers, because information was stored in 20 different systems," says Davenport. But as network and Internet technology has matured, CRM software has found its place in the world.

Benefits of CRM

When used in association with data warehousing, data mining, call centers and other intelligence-based applications, CRM "allows companies to gather and access information about customers' buying histories, preferences, complaints, and other data so they can better anticipate what customers will want. The goal is to instill greater customer loyalty, and to gain a better understanding of their customer's wants and needs."

• Faster response to customer inquiries
• Increased efficiency through automation
• Deeper understanding of customers
• Increased marketing and selling opportunities
• Identifying the most profitable customers
• Receiving customer feedback that leads to new and improved products or services
• Obtaining information that can be shared with business partners