Report

on
Customer Relationship Management (CRM)

Prepared by
Name: Abdullah Mohammed Arif
ID: 2019-2-91-006
Couse: MIS 501 – Management Information System
Section: 02
Customer Relationship Management (CRM)
Customer Relationship Management (CRM) is the core business strategy that integrates
internal processes and functions, and external networks, to create and deliver value to
targeted customers at a profit. It is grounded on high-quality customer-related data and
enabled by information technology. (Buttle 2008, p15)
The fundamental reason for an organization wants to have a relationship with the customer is
economic. The main objectives of CRM are identified, acquire, satisfy and retain profitable
customers. Companies can do better when they achieved the objectives of CRM. Improve
customer retention rates or decrease customer defection rates will affect the increase in the
size of the customer base.

Definition of CRM
The expression of Customer Relationship Management (CRM) was being started to use since
the early 1990s. According to Customer Relationship Management: Concepts and
Technologies (Buttle 2008), there are many attempts to define the domain of CRM:
Customer Relationship Management is an integrated approach to identifying, acquiring and
retaining customers. By enabling organizations to manage and coordinate customer
interactions across multiple channels, departments, lines of business and geographies, CRM
helps organizations maximize the value of every customer interaction and drive superior
corporate performance. It is an integrated information system that is used to plan, schedule
and control pre-sales and post-sales activities in an organization. CRM embraces all aspects
of dealing with prospects and customers, including the call center, sales-force, marketing,
technical support, and field service. The primary goal of CRM is to improve long-term
growth and profitability through a better understanding of customer behavior. CRM aims to
provide more effective feedback and improved integration to better gauge the return on
investment (ROI) in these areas.

Types of CRM
There are 4 types of CRM implemented overall in the business. There are Strategic CRM,
operational CRM, Analytical CRM, and Collaborative CRM.
Strategic CRM is used to develop a business with a customer-centric culture. This culture is
dedicated to winning and keeping customers by creating and delivering better value than
competitors. Customer centricity is competing with 3 other business logic, which is the
product, production, and sales. Product-oriented businesses believe that the product with the
best quality, performance, design or features will be chosen by the customer. Production-
oriented businesses believe that customers more likely to choose a low-cost product. Sales-
oriented businesses believe that customers will be persuaded to buy their product if they do
enough for advertising, selling and public relation. A customer or market-oriented businesses
share a set of belief putting the customer at first. Many managers say that customer-centric
must be right. However, sometime other orientations may stronger.
Operational CRM uses to automate and improves customer-facing and customer-supporting
business processes. CRM applications can make the marketing, selling, and service process to
be automated and integrated. There are 3 types of automation, which are Marketing
 automation, sales-force
automation, and service
automation. Marketing
automation allows the marketer to
use customer data to develop,
execute and evaluate targeted
communication and offers. Sales-
force automation is used to
managing selling activities,
product configuration in sales-
force automation allows a
customer to design their product
by themselves, one of the
examples is the web-based laptop
setting configuration and orders features offer by the DELL. Service automation is used to
automate the serving service of the company, it was used widely by most of the company. For
example, when customers call the customer support center of the companies, they will first
ask us to use voice or keyboard to enter the option customer want, then lead us to the related
service provider.
Analytical CRM is concerned with capturing, storing, extracting, integrating, processing,
interpreting, distributing, using and reporting customer-related data to enhance both customer
and company value. Analytical CRM normally can use to answer the marketing question of
the businesses such as who is our most profitable customer? Which is the customer having
the possibility of turnover to the competitor? Which customer has a high possibility to accept
our offer? Analytical can help them to know which customer should give which level of
services, and this could increase the possibility of the customer to accept the offer.
Collaborative CRM is the term used to describe the strategic and tactical alignment of
normally separate enterprises in the supply chain for the more profitable identification,
attraction, retention, and development of customers. (Buttle 2008, p11)

Application Clusters in CRM

CRM clusters consist of how a customer is related to sales, marketing and fulfillment,
customer service and support, retention, and loyalty program and contact and account
management.
Contact & Account Management: Contact management is the process of recording
contacts’ details and tracking their interactions with a business. Such systems have gradually
evolved into an aspect of customer relationship management (CRM) systems, which allow
businesses to improve sales and service levels leveraging a
wider range of data. As the categories of sales
management and contact management software
have grown closer in recent years, enterprises
started to appreciate the benefits of unified
processes and systems capable of capturing a
wider range of business data.
Sales Management: Sales management is the process of hiring, training and motivating sales
staff, coordinating operations across the sales department and implementing a cohesive sales
strategy that drives business revenues. Sales are the lifeblood of any organization and
managing the sales process is one of the most important functions of any business. A sales
management CRM system can drive team effectiveness by minimizing admin tasks and
centralizing customer information. The system allows the sales manager to assign tasks to the
right rep and prioritize good leads, as well as improving forecasting and analytics.
Marketing & Fulfilment: CRM systems help marketing professionals accomplish direct
marketing campaigns by automating such tasks as qualifying leads for targeted marketing and
scheduling and tracking direct marketing mailings. Then it helps marketing professionals
capture and manage prospect and customer response data in the CRM database and analyze
the customer and business value of a company’s direct marketing campaigns. CRM also
assists in the fulfillment of prospect and customer responses and requests by quickly
scheduling sales contacts and providing appropriate information on products and services to
them, while capturing relevant information for the CRM database.
Customer Service & Support: A CRM has benefits for multiple business sectors as well as
a significant role in lead management and sales, which makes it valuable to marketing teams
and sales staff. Both can use the CRM data to keep track of clients and potential clients,
learning when and how to deliver messages to each. However, CRM support for customer
service has a primary role because customer service blends marketing, sales, support, and
retention efforts. For businesses in which customer support services are vital, a CRM can
push and pull data from multiple areas of the business to streamline communication within an
organization and make client interactions more effective.
A CRM can also lead to more data, better quality data, and increased access to data by
relevant team members. Customer service managers monitoring and reviewing metrics from a
CRM can use those figures to implement data-driven solutions that improve the performance
of customer service departments. Finally, dedicated use of a CRM throughout a business can
help achieve cost savings and increase profits; benefits that impact everyone involved—
representatives, managers, and executives.
Retention & Loyalty Programs: Customer retention is the capacity a company has to keep
customers engaged with its product or service. CRM acts as a business strategy in customer
relationship management that seeks
to increase customer loyalty and
reduce customer churn. Customer
retention techniques include
creating a loyalty or VIP program,
personalizing the customer
experience, re-engaging at-risk
customers and placing a high value
on customer service. Customer
retention is important because it
provides organizations insight into
their performance. And, like many
other things, it’s rooted in data.
Three Phases of CRM
Customer Life Cycle: There are three phases to the customer life cycle. The three phases
include customer acquisition, enhance and retain. The first phases are customer acquisition
which means prospects become customers when they place an order.  The second stage is
enhanced customer management, which increases the value of existing customers. The last
stage of a customer life cycle is retained, when inevitably in time a company may resell it’s
products to the customer. The company then needs to establish a win-back process and needs
to decide which lost customers are of most value and try to win back their business. A CRM
system integrates all three phases of
the customer life cycle into three
major processes. These processes
are a solicitation, lead-tracking,
and relationship management.
The diagram above depicts the
four phases and the three major
processes.  It shows the flow of
phrases and what each phrase
means. 
CRM Functional Solution:
Organizations are investing
heavily in marketing in order to
supercharge their business’s operational efficiency and to grow revenue. Supporting the
magical influence of marketing, CRM offers a functionality called Digital Marketing. Digital
Marketing is a handy tool that helps you take your marketing efforts to the next level while
saving the resources in the long run and also assists in nurturing leads through proficient
digital marketing campaigns. These campaigns drastically enhance Customer Engagement in
a cost-effective manner, helping you grow. Featuring Email Marketing, newsletter based
campaigns, and non-email-based campaigns such as SMS campaigns and conference call
campaigns, etc. marketing automation solution of CRM enables business owners to adopt
fully optimized technology that can lessen the burden on the staff and increase profits.
CRM Integrated Solution: Customer relationship management (CRM) is more important
than ever for growing businesses, as establishing a strong foundation with customers is
essential. As technology continues to advance, so do the ways in which communication
occurs between businesses and clients, making it all the more important to keep track of
interactions. A well-connected CRM system is vital for expanding business in order to drive
sales, boost performance, and streamline processes. Organization vendors need is a way to
connect their client relationship management applications with existing applications and
services. Through various CRM software can connect and automate sharing of customer and
opportunity data with third-party marketing or ERP applications, whether they be on-
premises or in the cloud. Customer information from various applications is made available
on one platform for all departments of an organization, easily.
Benefits & Challenges of CRM
The aim of CRM is to sustain the relationship that exists between the organization and the
customers. It assists in the collection, organization and management of customer information.
CRM is used to process prospective customers and also win back the trust of those who have
had unhappy experiences with your business. A CRM system is suitable for all companies,
regardless of whether you are a small, medium, or large enterprise.
The benefits associated with the use of CRM applications are numerous and can be attributed
to its functionality. Although there are some challenges with using CRM, the growth of many
organizations can be attributed to the proper usage of such a system. A few such benefits are
the following:
Connection with customers: The primary benefit of using CRM helps organizations to
understand their customers better and connect with them more efficiently. Organizations must
understand their customers well in order to create products that meet and even exceed their
expectations. CRM application also increases sales when there is a proper connection.
Therefore, CRM users must be trained on how to retain and support the customers so that
there will be synergy between both entities.
New discoveries made from business data: Companies often have a large volume of
customer data. When the CRM application is efficiently used, this data can be captured and
used for analysis which might, in turn, contribute to the growth of an organization. For
example, with the aid of the CRM application, the sales department will be able to estimate
how to manage cash flow and increase lead conversion. Businesses can monitor their Key
Performance Indicators (KPIs) and use these insights to take necessary corrective steps.
Increased organization: It is easy to be disorganized when dealing with large volumes of
data from thousands of customers. With the aid of CRM, customer information will be well
arranged and properly organized. This information can also be easily retrievable, all while
keeping the data safe and secured.
The catalyst for business expansion: For the growth of any business, its long term goals
need to be taken into consideration. If adequate data is not well-kept from the onset, scaling
the business becomes a problem. That is why it is important to use a CRM system at the start
of any business for smooth and easy scalability.
The challenges associated with a CRM solution include the need to invest a significant
amount of money in the process. As the CRM solutions do not come cheap, businesses must
make the required investments and be prepared to wait and let the benefits actualize instead
of being impatient and demanding instant solutions. The point here is that CRM
implementations are usually long-drawn affairs, which means that the commitment from the
businesses must be deep and meaningful. Further, there is the slip between the cup and the lip
as far as CRM implementations are concerned. These relate to the lack of coordination
between the businesses and the vendors that usually result in the requirements being not met
because the vendors did not understand the requirements properly and the businesses were
pressurizing the vendors for faster implementations and quicker results. Apart from these
challenges, the users need to be trained properly and this is an aspect that does not receive the
attention it deserves. This is because of the fact that unless the users are trained in using the
CRM software, there are likely to be mismatches between the user expectations and the
reality of the implementation.