CRM In The Retail Industry
The adage “the customer is king” is an age-old maxim of good business. Excellent customer service leads to customer retention, which is the lifeline of any successful business. When the local bookstore knows you by name and can recommend new titles that you are certain to love – that’s good customer relations in action. When settling a discrepancy in your credit card bill over the phone is a quick, painless affair handled by a courteous customer service rep – that’s excellent customer relationship management.
Enterprises are increasingly treating customer relationships as a valued business resource that needs to be managed, nurtured, and supported by information systems.
Likewise, today’s customers expect consistent, professional service and support with every interaction, through any channel, from anywhere in the world. Combine this expectation for high quality service with an explosion of choices in providers of goods and services, from retail, to banking, to insurance.
In today’s business environment, the renewed interest in customer relationships is due to increasing competition for customers, as well as the widespread realization that customer retention and loyalty is just as important as customer acquisition. Another reason behind this renewed interest is shift in the balance of power from suppliers to customers. Globalization has expanded customer choices by stretching a consumer’s reach across countries. E-business tools help consumer and business customers evaluate diverse purchase options.
Given the vast choices, customers dissatisfied with their bank, credit card company, or long distance carrier can easily switch to another.
While the quality of a company’s customer service is even more critical to a firm’s success and competitive advantage, the job of building lasting customer relationships has grown far more complex for most companies. Hence the evolution of CRM, a combination of new technologies that enable companies to better manage their valuable customer relationships.
Implementing CRM is a multi-million dollar corporate initiative. The market for CRM goods and services is expected to crescendo at $76 billion by 2005. Yet 70% of CRM projects fail in some way. In spite of the high failure rate, enterprises still choose to take on that risk. This report explores the different forms and goals of CRM across various industries. It evaluates the key factors involved in successful CRM implementations as well as the reasons why CRM implementations fail.
What is CRM?
CRM, or Customer Relationship Management, is a company-wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty. CRM systems integrate information from all data sources within an organization to give a holistic view of each customer in real time.
This allows employees in sales, customer support, and marketing to make quick yet informed decisions on everything from cross-selling and up-selling opportunities, to target marketing strategies, to competitive positioning tactics.
However, there is no one way to approach CRM. CRM systems help firms strengthen customer relationships in a myriad of ways and forms, across a variety of different industries. Therefore, it may be more useful to think of CRM as a wide-ranging and flexible process that integrates the three areas of marketing, sales and customer support through 10 key principles.
The 10 Key Principles of CRM
- Value Segmentation: Segmentation is based in customer needs, preferences, behaviors and economic potential, which provides the basis for resource allocation decisions in marketing, sales and service.
- Institutional Memory: When the customer interacts with the company, everyone in the enterprise is aware of prior inter actions, outstanding issues and pending opportunities.
- Collaboration: Customers are involved in the specification, design and/or delivery desired result.
- Touch-point alignment: Customers are able to do business with a firm through multiple channels, which are aligned with your customer r needs and, their value to your business
- One & Done: Customer needs are solved during the first contact.
- Real-time information manager: The employees have real-time access to the right information in order to make customer-based decisions and resolve issue immediately.
- Customer Scorecard: Employee performance requirements measures are designed to drive specific customer behaviors that are measured explicitly.
- Closed-Loop Processes: Integrated front and hack offices systems ensure that information and workflow carry through the entire enterprise to their logical conclusion, closing the customer loop and enabling continuous knowledge capture.
- Listening & Learning Posts: These Forums facilitate information sharing and learning among the customers that help them do business with the company.
- Customer Experience Management: Once all the above “touch points” have been mapped the company is able to deliver a consistent, high quality experience that provides added value to the customer.
These 10 principles provide the basis for increased efficiency and integration in marketing, sales, and customer support.
CRM in Action
CRM has enormous value for a company’s marketing initiatives. CRM systems can help simplify marketing processes, and at the same time add muscle to their initiatives through data mining, targeted selling, and personalization.
CRM systems can be used to collect every conceivable piece of data from customers and manage this information in a central location. For example, while websites may not ask for personal information, a firm’s CRM system “might track the “clickstream” — clicks, time spent per page, items selected, but abandoned, and similar information — all in order to find out more about their customers and their behavior.
The clickstream data becomes a useful resource for data mining tools that predict gender, age, income, preferences, and a customer’s willingness to purchase,” (http://retailindustry.about.com/library/weekly/aa120199a.htm).
Marketing can use the information captured to create a highly personalized customer experience that strengthens customer loyalty, grows brand awareness, and promotes product cross-selling (based on what the customer purchased in the past), thereby increasing the company’s sales revenues.
For example, much like the neighborhood bookstore that knows customers on a first-name basis and their preferences in literature, the Amazon CRM system attempts to mimic this experience by creating an interactive, online shopping environment. Each time a customer views a particular item, Amazon’s system shows the customer what others (who bought that item) also purchased.
Each new visit to Amazon’s website pulls up a new series of recommendations, all based on the customer’s previous orders and an computer generated evaluation of the customer’s tastes. Amazon also gives special discounts, allows customers to check on the status of a book order and provides free shipping on orders placed on a customer’s birthday.
In addition to facilitating highly targeted marketing campaigns, CRM systems allow marketing to evaluate the effectiveness of highly targeted campaigns more quickly and efficiently than ever.
Sales Force Automation
CRM also includes sales force automation. SFA systems have done a good job of enabling sales executives to better manage their pipeline. CRM systems allow sales reps to organize and track important data about opportunities, prospects, and leads.
SFA systems also provide greater visibility into the sales process, and centralize all vital data. Using an SFA system, managers can generate reports and forecasts quickly and efficiently.
SFA systems, by streamlining the sales process and removing inefficiencies associated with paper-based systems, can slash a firm’s sales cycle from weeks to days.
Furthermore, SFAs can usually be customized to a certain degree to reflect the sales process of individual companies across various industries. Customized screens allow sales reps to capture the data they need to accomplish the firm’s sales goals. SFAs also usually include some kind of scheduling calendar so that sales reps no longer forget to make calls or randomly call contacts from their account lists.
CRM systems can help a firm increase customer support channels by allowing customers to reach support representatives through email, online chat and VOIP calls. CRM also helps reduce the load on service personnel through its automation of customer support procedures. Knowledge bases and posted FAQs also allow customers to help themselves.
CRM systems provide a certain element of intelligence to customer support functions. For example, CRMs can track the who, what, when and why of customer calls or request, whereas in the past, the history of customer calls was usually lost or never even maintained.
By allowing each service representative to access the history of customer calls, the customer does not need to repeat the same old story, and the representative can address the customer’s concerns more quickly. Customer feedback that is captured by the system can also be applied towards future marketing campaigns.
The main idea behind CRM for customer support is the improvement of customer satisfaction by managing, synchronizing, and coordinating all customer touch points.
CRM systems support sales, marketing, and customer support primarily through better data management. The CRM system stores customer information centrally, rather than in disparate systems across an enterprise.
Centralized data management reduces inefficiency due to duplicate records, reduces the risk of human error prone to paper-based systems, and allows wide access to all key users of the information. Increased efficiency from data automation can reduce operational costs, and promote increased productivity.
CRM data management functionality can support strategic decision making regarding delivery channels and organizational structure. While CRM systems are expensive to implement, it is assumed that the benefits from increased process efficiency, greater productivity and improved knowledge management will ultimately drive down the total cost of ownership of the CRM system.
The Many Faces of CRM
While CRM can be seen as a wide-ranging and flexible process that integrates the three areas of marketing, sales and customer support, the goals and functionality of CRM systems varies widely depending on the industry it supports. This report provides an overview of CRM in the retail, finance, and chemical industries.
CRM in the Retail Industry
CRM in the retail industry is largely oriented around the creation of a personalized, interactive shopping environment (on and offline) that fosters customer loyalty and repeat sales. Some of the maxims of a CRM initiative for the retail industry include:
- Increase the lifetime value of a company’s relationship with target customers
- Optimize the effectiveness of marketing, selling and servicing of target customers
- Maximize the value of customer expenditures for company/customer gain
- Monitor customer behavior across all purchasing channels including the web, catalogue sales, and call centers, as well as in-store.
- Create services that win lifetime value
- Drive business growth and profitability
- Increase customer loyalty
- Track customer activity across its multiple sales channels.
CRM in the Financial Services Industry:
Operations in the banking industry are changing due to innovations in technology as well as demographic changes. People are living longer and the baby boom generation is getting older. Bankers need to plan services around a new class of older client.
Younger, technologically savvy clients want to do all their banking online and never set foot in a branch. Thus, financial service providers are leveraging CRM technology in order to accommodate a more diversified customer base. Hence, the primary goals of CRM in the finance industry are:
- Revitalize customer service channels and maximize their efficiency
- Provide a wide range of online financial services
- Identify opportunities for business process re-engineering.
- Identify the most valuable customers
- Consolidate customer data
- Protect customer security through the most advanced encryption technology
- Integrate customer needs and increase customer loyalty
CRM in the Chemical Industry
Knowledge management is very important in the chemical industry, where, in general, fewer employees deal with customers directly than in other industries.
Chemical manufactures have different customer relationships than most other industries. For example, some companies manufacture highly specific chemicals that they supply to a handful of customers with whom they have long term relationships.
Thus the mass marketing campaigns widely used in retail are not effective in supporting the goals of most chemical companies. Here the main of goal of CRM is:
- Improve customer loyalty and satisfaction
- Integrate the call-centers and telesales operations
- Present unified information to all customers
- Manage information about all customers
- Leverage the entire organization and give best services at lower cost
- Allow customer access to their personal data
- Allow employees access to specific customer data on their computer screens
- Provide online access to order entry, order status, account history, payment information, product details and technical support
- Provide interactive customer interface and support
Given that the goals of CRM vary widely across industries, it is no surprise that CRM application packages offer different functionality. There are several kinds of CRM packages available on the market and companies would do well to assess the pros and cons of each.
Given the high cost of implementation, companies ought to plan CRM projects carefully. However, many management executives do not understand the complexity and scope of CRM projects. Rather, they perceive CRM technology to be a silver bullet that will eliminate all their customer relationship woes. Unfortunately, this perception fueled even more by industry hype, leads to the enormous failure rates of CRM projects.
When CRM fails
Industry analysts predict that the market for CRM products and services will mushroom to $76 billion by 2005. Given that enormous dollar opportunity, everyone wants a piece of the pie.
Software vendors, industry analysts, and technology reporters are all touting the upside of CRM – and no one can stop pushing the hype button. Yet, in spite of all the optimism, a closer look reveals that CRM implementations have an extremely high failure rate.
Industry data indicates that more than 50% of CRM projects fail in some way, wasting hundreds of millions of dollars that corporations spend on their CRM initiatives. The Butler Group suggests that number is closer to 70%. In fact, many projects never work out at all.
That statistic is ominous, considering that corporations can typically invest upward of $10 million for an initial CRM launch, with subsequent phases of maturity sapping millions more from the enterprise. While it may be easy and convenient to blame vendor, in fact “the worst implementations have little or nothing to do with the CRM software or the integration effort,” (Berg). Enough evidence abounds to timidly suggest that it is the business itself that is the root of failed CRM evils.
However, in analyzing why CRM projects fail, it is important to begin by first defining the concept “failure”; second, pinpoint what is not working, and why; and third, identify methods to mitigate against CRM project failure.
In his article, “The ‘Failure’ of CRM”, Jim Ericson asks, “But what is failure? Is failure about software failing? Is it failing to meet ALL the goals set out? Is failure the result of management picking the wrong solution for the wrong reason?”
While analysts might glibly say that it’s “failure to meet expectations,” this answer sheds little light on exactly what’s not working and who is at fault.
What goes wrong and why?
While the technology vendor is an easy target, failures occur largely because the end-user company does not put enough effort into preliminary preparation. In fact, most of CRM failures go back ignoring Information Systems 101. A quick review of the principles for IS planning includes concepts such as:
- Support the Firm’s Business Strategy with Appropriate Technical Architecture, Standards, and Policies
- Evaluate Technology as a Component of a Larger System
Do not move the likely point of failure from one point to another
- Recognize Life Cycle Costs, Not Just Acquisition Costs
Recognize that the total cost of ownership may far exceed the cost of acquiring the hardware, building, buying software associated with a new info system.
- Design Info Systems to Be Maintainable
- Recognize the Human Side of Technology Use
People are a part of the system, and a spectacular system may fail if the human participants are unwilling or unable to play their part effectively.
- Support and Control the Technical System
Complex systems need regular care and maintenance, otherwise they degrade and become more prone to failure from overloaded databases, incorrect data, faulty documentation, or human error.
- Recognize Risks and Have a Backup Plan
In order to be successful in CRM, companies need to “grapple with much tougher issues, issues of business strategy and leadership, organizational change, business process redesign, and user adoption”, (The Perils of CRM). Often management does not fully understand the implications of CRM, and thus does not face up to the enormous commitment of an implementation effort.
When the technology goes live and problems occur, management is ill-prepared and more money is spent doing damage control.
CRM involves adopting all kinds of painful internal changes that companies do not want to make. “Specifically, most businesses’ internal processes lack the consistency and rigor necessary for today’s CRM systems to be completely effective. In effect, the company ends up automating – rather than eliminating – bad processes, and as a result, helps the business run more inefficiently more quickly,” (Berg). Furthermore, the quality of data is an important aspect of any CRM system. If the company fails to clean up its database prior to implementation, garbage in is still garbage out.
Companies also need to recognize that complex information systems need to go through multiple generations of maturity. There is no such thing as an “out of the box” solution. Furthermore, analysts tout whatever they think CRM should do, but in reality, vendors are 2-3 years behind that.
A Framework for Successful CRM
In order to be successful with CRM, a company needs to incorporate careful project management and system implementation into the bigger, holistic picture. This report has identified eight essential factors in successful CRM strategy.
- Vision: Successful CRM demands a clear vision, so that a strategy and implementation can be developed to achieve it. The CRM vision defined as how the company wants customer to look and feel about the firm.
- Strategy: This considers the direction and financial goals of the business strategy and sets out how the firm is going to build customer loyalty or customer satisfaction.
- Valued customer experience: focuses on the need to seek and act on customer feed back to create and maintain a successful customer experience.
- Secure business and technology leaders to each other: Individuals, teams and the whole enterprise must focus on the goal and constantly communicate what the business want to the technology leaders.
- Technology and implementation: Carefully consideration of the application, architectural issues and integration of the technology. Most organizations that have successfully implemented CRM have started small, experimenting with many different pilots before rolling out larger-scale implementations of these new systems. Train, deploy and support the CRM.
- Organizational collaboration: Many enterprises believe that implementing CRM technologies makes them a customer-centric organization. They forget, ignore or avoid necessary changes to the firm itself. However, internal change is needed to deliver the required and desired external customer experience i.e. changing organizational structures.
- Information: Success CRM requires a flow of information around the organization, providing customer insight and allowing effective interaction across channel.
- Metrics: Set measurable CRM objectives and monitor CRM indicators to successfully turn customers into assets. Without performance management, a CRM program is destined to fail.
CRM System for Small Medium & Large Business:
A basic CRM software for small businesses will help you to manage your potential customers and it will save your precious time and energy to fully focus on your growing business.
In terminology CRM , sales management software for small businesses is used to specify the lightweight application of CRM that is specifically designed to meet and fulfill the needs of small businesses.
The simple CRM software for small businesses is used to describe the same way to manage potential clients, business contacts, sales, contracts, etcetera. The main softwares that made easy CRM software service are Zoho & Hubspot CRM in up growing business.
Medium to large organizations use CRM software for sales and marketing to create relationships between clients and customers and to treat each customer individually for better understanding rather than as a group.
Vital Features Of CRM :
1- Enhancing Contacts
2- Providing Social Media Integration
3- Trackinging Performance
4- Leads/Sales Managements
5- Client Relationship
How Do Why are CRM Data Management Systems Beneficial?
For most companies, the online CRM database and onlineCRM program is as important and beneficial as it was ever before because the easiest CRM system provides us with new technology, to easily nurture & manage both existing and new pool of customers.
As Technology becomes advance, so in this modern era, the best CRM for business development track numerous strategies and benefits.
If you are looking for the best CRM for startups and its benefits then you are at the right place.
Some key benefits of the best simple CRM software are given below.
If you are in the search of sales CRM for small business and simple CRM database then you’re at in the right place.
In the worldwide top five fastest-growing software companies, salesforce is one of the them because salesforce design full-featured best CRM for sales people and easy to use CRM that can efficiently meet the needs of all types of businesses.
As SMBs you want to compete the companies and organizations on a larger scale then salesforce can enhance your small business gradually from the initial stage to enterprise-level by using an online CRM program.
This will be the best opportunity for organizations because salesforce provides the best sales management CRM & simple CRM tool to maintain the better interaction with their customers.
You can track customer interaction with its mobile app even on the go.
With its customizable CRM software and configurable dashboard, you can get real-time results. So salesforce is the best value CRM for all organizations especially valuable CRM for small companies.