CRM - yet another of those dreaded IT industry three letter acronyms...
You could say that but CRM - despite being a tech industry buzzword bandied about over the past few years - actually stands for something close to the heart of most businesses: customer relationship management.
Keeping customers happy so they come back - doesn't really sound that new an idea to me…
Well, the concept of keeping your customers happy certainly isn't but the new raft of applications and ways in which they can be delivered is pretty cutting edge. CRM technology can also bring extra benefits as well as keep your clients and customers sweet.
CRM's all about capturing information about your customers when you interact with them, then tailoring your future approach using this information. The technology covers things from logging information around initial customer contact to targeted advertising or, further down the line, things like efficient bill management.
Customer data - such as frequency of contact, kinds of products bought and so on - is used to pick out the most valuable customers helping companies retain them and even acquire new ones. So CRM can boost customer loyalty which leads to reduced costs and increased profitability.
Who in a business would make use of CRM technology?
The information generated by CRM systems can be used by people in sales, customer support and marketing to allow for quicker and appropriate decisions to be made.
Marketing people for example could use information about customers' other interests or buying habits to provide cross selling and upselling opportunities. Using CRM, call centre staff can quickly access contact history to deal with queries as efficiently as possible and provide a better quality of service.
And by making customer feedback easier - through the phone, web, email or SMS, more information can be acquired and customers may feel it's easier to follow up any problems they have.
All of these areas will generate increased revenue from each customer, streamline call centre operations and make for better informed marketing decisions.
Give me an example then…
CRM can be employed on an ecommerce website to track where customers go when they visit, how they access information and what the topic they're interested in or are likely to send in a query about.
By using this information, among other things, companies can improve online FAQ sections, prepare customer service staff better and work out how they can serve their customers better in general.
The technology sounds straightforward enough. How easy is it to implement?
There's a bit more to it than just technology. To really make CRM work, companies also need to focus on their people and processes within the organisation.
CRM vendors are keen to stress this aspect as they can provide services to help overcome these issues. But it's true to say if businesses rush into CRM work or don't choose the right kind of technology, they could be wasting huge amounts of money.
And the information gathered isn't just about the customers, as data about sales, marketing effectiveness and market trends also play a key role.
So are there any drawbacks?
Just dropping in CRM technology won't change the world overnight as employees need to be convinced of its benefits and businesses need to analyse business processes to see what needs to be changed to fit in with the new way of working.
So essentially, bringing in CRM technology requires a lot of thought and planning across the business - not just IT.
Is this really such a big deal?
According to Gartner, the market in Europe alone was worth around $2.2bn in terms of licence and maintenance revenue by the end of 2006. And this was a growth of 8.2 per cent during the year. So yeah, it is a big deal and countless vendors are hoping to cash in.
So, give me some names…
Everyone from Microsoft and Oracle, to relative newcomers, such as on-demand software provider Salesforce.com, are getting in on the CRM act.
Oracle offers its Siebel product, while Microsoft has its Dynamics tech and there are numerous products available from HP, IBM, SAP and others. On the software-as-a-service (Saas) side, the main players are Netsuite and Salesforce.com.