Customer relationship management (CRM)

CRM products

CRM products come with many features and tools and it is important for a company to choose a product based on their specific organizational needs. Most vendors will present information on their respective websites.

  • Features These are what the product actually does and what value it can provide to an organization.
  • Support Many CRM vendors have a basic level of support which generally only includes email and/or access to a support forum.[2][3][4] Telephone support is often charged in either an annual or ad hoc pricing strategy. Some companies offer on-site support for an extra premium.[5]
  • Pricing This will be shown either per-user[4] or as a flat price for a number of users.[6] Vendors charge annually, quarterly, or monthly with variable pricing options for different features.
  • Demonstration Periods Many vendors offer a trial period and/or online demonstrations.

Characteristics of CRM[edit]

  • Relationship management is a customer-oriented feature with service response based on customer input, one-to-one solutions to customers’ requirements, direct online communications with customer and customer service centers that help customers solve their issues.
  • Sales force automation. This function can implement sales promotion analysis, automate tracking of a client’s account history for repeated sales or future sales, and also сoordinate sales, marketing, call centers, and retail outlets in order to realize the salesforce automation.
  • Use of technology. This feature is about following the technology trends and skills of value delivering using technology to make “up-to-the-second” customer data available. It applies data warehouse technology in order to aggregate transaction information, to merge the information with CRM products, and to provide KPI (key performance indicators).
  • Opportunity management. This feature helps the company to manage unpredictable growth and demand and implement a good forecasting model to integrate sales history with sales projections.[7]
  • CRM in developing and maintaining client relationships.
  • Increasingly CRM is expanding outside of the core sales and marketing areas and systems are available that incorporate support and finance data also into the CRM view that a user gets, enabling a wider holistic view of a customer from one screen for a user.
  • Customer relationship management systems track and measure marketing campaigns over multiple networks. These systems can track customer analysis by customer clicks and sales.

CRM implementation[edit]

Implementing CRM in a company[edit]

The following are general guidelines on implementing a CRM system.

  1. Make a strategic decision on what problems you want your CRM system to address, what improvements or changes it should bring in the business processes of the organization.
  2. Choose an appropriate project manager. Typically IT will be engaged, however a manager with a customer service/sales and marketing business focus should be involved, as the impact of the project will be mainly on the business side.
  3. Ensure executive sponsorship and top management support.
  4. Empower team members with the required authority to complete the tasks.
  5. Select the correct implementation partner. They must have both vertical and horizontal business knowledge, as well as technical expertise.
  6. Define KPI’s that will measure the project’s success.
  7. Use a phased approach. Work towards long-term enterprise-scale implementation through a series of smaller, phased implementations.[8]

Several major scholars in the field of marketing wrote a paper entitled “CRM Implementation: Effectiveness Issues and Insights” (2006). This paper provides several useful insights for CRM implementation.[9]

Impact of social networking on E-CRM[edit]

  1. A huge number of people use the Internet every day, various target different browsers website (social, cultural, political and other benefits), because there is a lot of information available that is easy to access quickly as needed. The majority of users through a variety of social networking sites, such as Facebook, LinkedIn and many other sites scrolling. Since these sites to provide users with a variety of services, including interactive with friends or business community to exchange information and interests. Research Balaram (2010)[10] presented evidence, a significant increase in the use of social networking sites, especially among young people. This causes companies to use effective means of attention these sites to sell their products, services and brands. Thus increasing demand for its products.
  2. Social Networks: It is an online service or online sites allow the establishment of an online community or group of people to interact and share common interests and activists. Such as Facebook, Twitter or chat rooms.[11]
  3. Availability of Internet services in this era is a revolution in the world of communications, where it allows users to send and retrieve information quickly with the central availability. In addition, by using a network of Internet data / network required to retrieve or send between folds in a simple manner can navigate. In addition, through the use of social networking sites, users can communicate and get information about other users, and even information about the company. This information describes individuals or companies. Promote the exchange and sharing of benefits. Social networking provides options for users to search and browse based on the needs and interests required information and access to them is. This will include the needs of the organization, in order to reach the largest number of individuals and the composition of the substrate vast level.Through social networking sites can create comments and suggestions of a special account or group can posts, and even job-related information and project work.
  4. Use of enterprise portals, especially exist; the integration and cooperation organizations, where the use of the Internet can be an important means to achieve the maximum benefit to the organization. In addition, the ability to manage and use information via the Internet organization, because the information from internal and external organization can. This increases the overall efficiency and regulations require businesses. It is possible to manage the business knowledge, and to provide information needed for a simple manner.[12] In addition, social networking sites to provide users with the possibility to build their own account, and add their own things or comments, for example, what they like, they hate, date of birth, place of residence and other problems. Therefore, it is easy to communicate with and contact them with the others, even some of the media to send a message or post notification. Users can also choose to select who will have permission to share or communicate, and build their own privacy options.
  5. In short, consider social networking as a platform for online businesses or individuals and effective tool, because it is free and easy to use. Therefore, it is possible for companies to adopt through effective communication and social interaction provides the company’s vision, from the advantages of this platform. And the company may exercise its own marketing, sales, and for their clients to provide services in a broad range. In addition, these sites can be deployed a lot of information, which will help the company move from its place to the whole world.

The impact of implementing CRM system on Customer Satisfaction[edit]

According to Bolton’s work, Customer satisfaction has significant implications for the economic performance of firms[13] Because customer satisfaction has been found to have a negative impact on customer complaints and a positive impact on customer loyalty and usage behavior.[14]

The benefits of implementing CRM are many, for example,

  1. Increased customer loyalty may increase usage levels [13]
  2. Secure future revenues [15]
  3. And minimize the likelihood of customer defection[16]

In a recent study, Anderson, Fornell, and Mazvancheryl (2004) find a strong relationship between customer satisfaction and Tobin’s q (as a measure of shareholder value) after controlling for fixed, random, and unobservable factors. More generally, the financial impact of customer satisfaction on various outcomes related to customer management, firm-revenues and profitability, stock market outcomes, and customer relationship behaviors (repurchase, word-of-mouth etc.) is summarized in an Marketing Science Institute Report from 2010.[17]

The implementation of Customer relationship management (CRM) is likely to have an effect on customer satisfaction for at least three reasons:

Firstly, by implementing the CRM, the firms are able to customize their offerings for each customer. By accumulating information across customer interactions and processing this information to discover hidden patterns, CRM applications help firms customize their offerings to suit the individual tastes of their customers. Customized offerings enhance the perceived quality of products and services from a customer’s viewpoint. Because perceived quality is a determinant of customer satisfaction, it follows that CRM applications indirectly affect customer satisfaction through their effect on perceived quality.

Second, in addition to enhancing the perceived quality of the offering, CRM applications also enable firms to improve the reliability of consumption experiences by facilitating the timely, accurate processing of customer orders and requests and the ongoing management of customer accounts. For example, Piccoli and Applegate (2003) discuss how Wyndham uses IT tools to deliver a consistent service experience across its various properties to a customer. Both an improved ability to customize and a reduced variability of the consumption experience enhance perceived quality, which in turn positively affects customer satisfaction.[18]

Third, CRM applications also help firms manage customer relationships more effectively across the stages of relationship initiation, maintenance, and termination[19] In turn, effective management of the customer relationship is the key to managing customer satisfaction and customer loyalty. Several issues in this regards are also summarized in a paper by Bohling et al.[9]


CRM in customer contact centers[edit]

CRM systems are customer relationship management platforms. The goal of the system is to track, record, store in databases, and then determine the information in a way that increases customer relations (predominantly increased ARPU, and decreased churn). The CRM codifies the interactions between you and your customers so that you can maximize sales and profit using analytics and KPIs to give the users as much information on where to focus their marketing and customer service to maximize revenue and decrease idle and unproductive contact with your customers. The contact channels (now aiming to be omni-channel from multi-channel) use such operational methods as contact centers. The CRM software is installed in the contact centers, and help direct customers to the right agent or self-empowered knowledge.[20] CRM software can also be used to identify and reward loyal customers over a period of time.

Growing in popularity is the idea of gamifying customer service environments. The repetitive and tedious act of answering support calls all day can be draining, even for the most enthusiastic customer service representative. When agents are bored with their work, they become less engaged and less motivated to do their jobs well. They are also prone to making mistakes. Gamification tools can motivate agents by tapping into their visceral need for reward, status, achievement, and competition.[21]

CRM in Business-to-Business (B2B) market[edit]

The modern environment requires one business to interact with another via the web. According to a Sweeney Group definition, CRM is “all the tools, technologies and procedures to manage, improve, or facilitate sales, support and related interactions with customers, prospects, and business partners throughout the enterprise”.[22] It assumes that CRM is involved in every B2B transaction.[7]

Despite the general notion that CRM systems were created for the customer-centric businesses, they can also be applied to B2B environments to streamline and improve customer management conditions. B2C and B2B CRM systems are not created equally and different CRM software applies to B2B and Business-to-Customer (B2C) conditions. B2B relationships usually have longer maturity times than B2C relationships. For the best level of CRM operation in a B2B environment, the software must be personalized and delivered at individual levels.[23]

Differences between CRM for Business to Business (B2B) and Business to Customers (B2C)[edit]

B2B and B2C marketing operates differently, and that is why they cannot use the same software. All the differences are focused on the approach of these two types of businesses:

  • B2B companies have smaller contact databases than B2C.
  • The amount of sales in B2B is relatively small.
  • In B2B there are less figure propositions, but in some cases they cost a lot more than B2C items.
  • Relationships in B2B environment are built over a longer period of time.
  • B2B CRM must be easily integrated with products from other companies. Such integration enables the creation of forecasts about customer behavior based on their buying history, bills, business success, etc.
  • An application for a B2B company must have a function to connect all the contacts, processes and deals among the customers segment and then prepare a paper.
  • Automation of sales process is an important requirement for B2B products. It should effectively manage the deal and progress it through all the phases towards signing.
  • A crucial point is personalization. It helps the B2B company to create and maintain strong and long-lasting relationship with the customer. To help the company communicate with their clients more effectively, there should be integration with the company’s email system.

SaaS CRM Software[edit]

Often referred to as “on-demand” software, SaaS based software is delivered via the Internet and does not require installation on your computer. Instead, you’ll generally access the software via your web browser. Businesses using the software do not purchase the software, but typically pay a recurring subscription fee to the software vendor.[24]

Small business[edit]

For small businesses a CRM system may simply consist of a contact manager system which integrates emails, documents, jobs, faxes, and scheduling for individual accounts.[citation needed] CRM systems available for specific markets (legal, finance) frequently focus on event management and relationship tracking as opposed to financial return on investment (ROI).

Social media[edit]

CRM often makes use of social media to build up customer relationships. Some CRM systems integrate social media sites like TwitterLinkedIn and Facebook to track and communicate with customers sharing their opinions and experiences with a company, products and services.[25] Enterprise Feedback Management software platforms such asConfirmitMedallia, and Satmetrix combine internal survey data with trends identified through social media to allow businesses to make more accurate decisions on which products to supply.[26]

Non-profit and membership-based[edit]

Systems for non-profit and also membership-based organizations help track constituents, fund-raising, Sponsors demographics, membership levels, membership directories, volunteering and communication with individuals.[citation needed]

Customer-centric relationship management (CCRM)[edit]

CCRM is a style of customer relationship management that focuses on customer preferences instead of customer leverage. This is a nascent sub-discipline of traditional customer relationship management; to take advantage of changes in communications technology.

Customer centric organizations help customers make better decisions and it also helps drive profitability. CCRM adds value by engaging customers in individual, interactive relationships.[27]

Customer-centricity differs from client-centricity in that the latter refers almost exclusively to business-to-business models rather than customer-facing firms.

Features of CCRM[edit]

Customer-centric relationship management is used in marketing, customer service and sales, including:

  • tailored marketing,
  • one-to-one customer service,
  • retaining customers,
  • building brand loyalty,
  • providing information customers actually want,
  • subscription billing,
  • rewards.

Value-oriented customer relationship management[edit]

More and more companies are seeking new ways to create and deliver better customer value in order to build and maintain close relationships with customers, thereby strengthening their sustainably competitive advantage. Therefore, a better understanding of customer value is the key to successful CRM application.[28]

  1. Customer value

Customer Value divided into functional value, social value, emotional value and perceived value. Functional value is that a product may offer convenient and methods to help customers solve problems in real life. The contribution of social value is that the responsibility and commitment of the customers – the customers through using their practical activities to satisfy the physical and psychic needs of society or others. Emotional value means that when the people’s physical needs are met, they begin to pursue social activities, self-esteem and achievement needs, mainly for seeking leisure, entertainment, lifestyle and emotional experience, such as a sense of interest, pleasure, and satisfaction. Perceived value refers to customers’ overall evaluation of the product or service, the cost that customer can perceive its benefits and pay.[28]

  1. Features of customer value

1. Closely related to customer value and provide material 2. Offer a customer from the customer’s perception of the utility of judgment, not by the vendor and other objective decision 3. Customer perceived value is perceived core interests, such as loss of interest and perceived quality trade-offs, interest and other utility. It is a customer of the product attributes, attribute effectiveness and use of the results of the evaluation 4. Preferences and perception of customer value, customer value and therefore the substance is considered to the desired level, based on customer perceived loss of profits and interest, such as the total cost includes monetary and non-monetization differences for products / services overall evaluation of the utility.

  1. Brand loyalty

For brand loyalty, definitely, brand loyalty is the key way for customers to achieve more profit.[28] Usually brand loyalty is considered to be a repeated purchase, but sometimes we cannot know if the customers are truly willing to have the second, third, or forth purchase. So there is another way which has been referred that is according to customers’ attitude to test their loyalty. Companies can send out questionnaires or web links that are about some choices comment on the different aspects on product and service. By using this way, companies can get some true feedback and purchase experience from customers in order to figure out if the customers are happy to use the product or not.

  1. Results

So only if the activities and operation of companies can stimulate the purchase motivation of customers,and good attitude and preference of brands such as repeat purchase and share good shopping experience to others, basically it can be considered that enterprise has achieve a good performance on CRM. Also another benefit we can get is that good customer value and brand loyalty is a good drive to improve CRM performance, so providing better customer value and experience for customer is also a key way to implement CRM well. Accenture[29] and Emerald Insight[30] are now beginning to focus on CCRM as a discipline, with studies appearing on Mendeley.[31]

Adoption issues[edit]

In 2003, a Gartner report estimated that more than $2 billion had been spent on software that was not being used. According to CSO Insights, less than 40 percent of 1,275 participating companies had end-user adoption rates above 90 percent.[32] Many corporations only use CRM systems on a partial or fragmented basis.[33][citation needed] In a 2007 survey from the UK, four-fifths of senior executives reported that their biggest challenge is getting their staff to use the systems they had installed. 43 percent of respondents said they use less than half the functionality of their existing systems.[34][citation needed] Recently, it was found in a study that market research regarding consumers’ preferences may increase the adoption of CRM among the developing countries’ consumers.[35]

CRM Paradox[edit]

The CRM Paradox, also referred to as the “Dark side of CRM”,[36] entails favoritism and differential treatment of some customers. This may cause perceptions of unfairness among other customers’ buyers. They may opt out of relationships, spread negative information, or engage in misbehavior that may damage the firm. CRM fundamentally involves treating customers differently based on the assumption that customers are different and have different needs. Such perceived inequality may cause dissatisfaction, mistrust and result in unfair practices. A customer shows trust when he bonds in a relationship with a firm when he knows that the firm is acting fairly and adding value. However, customers may not trust that firms will be fair in splitting the value creation pie[clarify] in the first place. For example, Amazon’s test use of dynamic pricing (different prices for different customers) was a public relations nightmare for the company[citation needed].

Market leaders[edit]

The CRM market grew by 12.5 percent in 2012.[37] The following table lists the top vendors in 2006–2008 and 2013 (figures in millions of US dollars) published in Gartnerstudies.[38][39]

Vendor 2013 Revenue 2013 Share (%) 2012 Revenue 2012 Share (%) 2008 Revenue 2008 Share (%) 2007 Revenue 2007 Share (%) 2006 Revenue 2006 Share (%) CRM 3,292 16.1 2,525.6 14.0 965 10.6 676.5 8.3 451.7 6.9
SAP AG 2,622 12.8 2,327.1 12.9 2,055 22.5 2,050.8 25.3 1,681.7 25.6
Oracle 2,097 10.2 2,015.2 11.1 1,475 16.1 1,319.8 16.3 1,016.8 15.5
Microsoft Dynamics CRM 1,392 6.8 1,135.3 6.3 581 6.4 332.1 4.1 176.1 2.7
Others 11,076 54.1 10,086.8 55.7 3,620 39.6 3,289.1 40.6 2,881.6 43.8
Total 20,476 100 18,090 100 9,147 100 7,674 100 6,214 100


In the Gartner CRM Summit 2010 challenges like “System tries to capture data from social networking traffic like Twitter, handles Facebook page addresses or other online social networking sites” were discussed and solutions were provided which would help in bringing more clientele.[40] Many CRM vendors offer subscription-based web tools (cloud computing) and software as a service (SaaS). Some CRM systems are equipped with mobile capabilities, making information accessible to remote sales staff.[citation needed] was the first company to provide enterprise applications through a web browser, and has maintained its leadership position.[41] Traditional providers have recently moved into the cloud-based market via acquisitions of smaller providers: Oracle purchased RightNow in October 2011[42] and SAP acquired SuccessFactors in December 2011.[43]

The era of the “social customer”[44] refers to the use of social media (TwitterFacebookLinkedInGoogle PlusPinterestInstagramYelp, customer reviews in Amazon, etc.) by customers. CR philosophy and strategy has shifted to encompass social networks and user communities.

Sales forces also play an important role in CRM, as maximizing sales effectiveness and increasing sales productivity is a driving force behind the adoption of CRM. Empoweringsales managers was listed as one of the top 5 CRM trends in 2013.[45]

Another related development is vendor relationship management (VRM), which provide tools and services that allow customers to manage their individual relationship with vendors. VRM development has grown out of efforts by ProjectVRM at Harvard’s Berkman Center for Internet & Society and Identity Commons‘ Internet Identity Workshops, as well as by a growing number of startups and established companies. VRM was the subject of a cover story in the May 2010 issue of CRM Magazine.[46]

In 2001, Doug Laney developed the concept and coined the term ‘Extended Relationship Management’ (XRM).[47] Laney defines XRM as extending CRM disciplines to secondary allies such as the government, press and industry consortia.

CRM futurist Dennison DeGregor describes a shift from ‘push CRM’ toward a ‘customer transparency’ (CT) model, due to the increased proliferation of channels, devices, and social media.

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