At Customer Relationship Management or customer engagement management (commonly known as CRM), companies focus on their customers and the processes and relationships associated with them.
Basis of Customer Relationship Management
Customer relationship management relies on extensive customer data, obtained, for example, through personal conversations, sweepstakes, customer cards, or orders. The data is recorded in databases and can be retrieved and evaluated. Along with personal data such as address or date of birth, here are examples of other data that can be compiled:
- Additional family members
- Personal preferences
- Preferred product categories for purchase
- Complaints made before
- Contact and purchase history
- Level of studies
- Social conditions
- Hobbies, political attitudes, clubs, or drinking habits
Depending on the context, this data can be used to respond more precisely to the wishes and needs of customers. Many the more data is available, the greater the possibilities for analytical evaluation and the more useful the data will be for the employer.
In order to put customer relationship management into practice in the best possible way, you need CRM software. It consists of a database application that allows access to stored data, as well as its collection and maintenance. CRM software is many times integrated into ERP software, so purchase histories are available daily in the CRM. At the same time, redundant data storage in two databases can be avoided.
Advantages of CRM
An important advantage of a CRM system is that all workers have access to the same information. Using the contact history, a worker will be able to see what a client had previously agreed with another employee weeks or months before. Individual and tailor-made offers can be presented to the customer on the basis of purchasing behavior and customer preferences. Emails and offers can be more personalized, increasing your chances of success and potentially increasing your conversion rate.
Risks of CRMs
In addition, there are risks associated with managing customer relationships. Much attention must be paid to data protection issues. Since CRM systems collect a large amount of personal data from people who are normally only partially aware of it, the entrepreneur is responsible for avoiding the misuse of the data. The intention of introducing a CRM with customers is also risky with respect to the prospects for success. Almost one in two introductions fail due to multiple problems, such as resistance from the workforce, lack of cooperation from management, or underestimation of the volume of data.
The Social CRM It is an extension of the classic CRM for communication channels on the Internet, such as Facebook. The objective is to respond even more quickly to the needs, wishes and suggestions of customers who communicate through social networks. At the same time, these channels can be used to compile additional customer data, such as photos, information, and responses to company messages.
The CRM mobile device It is also a special form of customer relationship management, in which the focus is on the mobile device Internet. For example, it allows workers in sales and distribution departments to enter customer data so they can access it on the go.