Customer Relationship Management (CRM): Customer Relationship Management (CRM)

For everything you wanted to know on building leadership and management, refer Shyam Bhatawdekar’s website: http://shyam.bhatawdekar.com

(Refer our High Quality Management Encyclopedia “Management Universe” at: http://management-universe.blogspot.com/)

Most Important Jobs of a Business Organization

Find the customers and get orders for your products and services.
Retain them.
Obtain more and more profit making orders.
Run the entire organization effectively and efficiently thereby reducing the overall costs.
Make (reasonable) profits.

How Do You Achieve That?

By providing the customer value higher than the one provided by your competitors.
And then by continuously improving the customer value so that it remains better than the one provided by your competitors.
Improving customer value is a journey, not the destination.

Value for Money (VFM) to Customer

Value to customer (VFM) = (Total quality "Q" X Total service inclusive of pre, during and post customer service "S" X Relationship with customers "R") divided by (Price "P" X Lead times "L")
Price (P) = Overall costs (C) + profit
Objective of an organization is to maximize the VFM as compared to the overall incurred costs. Therefore, to meet this objective, the organizations should continuously improve "Q", "S" and "R" and continuously reduce "P", "C" and "L".
Customer relationship management (CRM) is designed to achieve this continuous improvement by way of focusing on the factor "R" in the above mentioned equation.
Therefore, developing and maintaining great relationships with the existing and prospective customers can be the differentiating factor in severe global competition in order to provide high degrees of customer delight.

Customer Relation Management (CRM): Holistic Approach

CRM's ultimate aim should be on improving the "R" (relationship) factor in the value for money (VFM) to customer equation mentioned in the earlier paragraph. In trying to achieve, it must be always kept in mind that:

CRM is a holistic management approach.
CRM is not just about marketing or sales or customer service functions, it has to do everything that enhances organization's relationship with it's existing and prospective customers.
CRM is not about the computer based CRM software packages though CRM does take significant support from these packages.
CRM is integration of management strategies, policies and processes that bring the organization and it's customers closer to each other in several ways and places the organization as a unified whole to it's customers.
CRM can improve the bondage between the organization and it's customers in such a manner that the loyalty of the customer towards the organization increases and the organization becomes friend, philosopher and guide to the customers.
CRM depends on the information about its customers, their requirements, their expectations, their expenditure portfolios, organization-customer interactions and many other areas of customer information which are collected, updated and accessed continually using computer data bases by organization's different departments.

CRM Umbrella

CRM encompasses:

Marketing, sales and customer service related functions and operations.
Functions and operations that have an impact on marketing, sales and customer service i.e. product development, product quality, supply chain management, manufacturing, advertising, finance, billing, accounting etc.
CRM data base building, maintenance, updating, analysis and interpretations to work out strategies, plans and execution related to new product development, marketing, sales and service campaigns, sales force automation (SFA), evaluation of marketing/sales/service effectiveness and efficiency by way of processing the indicators like profitability, sales volumes, revenue earned, market share, profitability, customer profiles etc.

Uses and Benefits of CRM

Customer data and information
Feedback information for product improvement/new product development
Marketing and sales automation (scheduling sales calls, mailers, keeping track of responses, generating reports etc)
Marketing, sales and service strategies and campaigns
Customer behavior analysis
Customer and product profitability analysis
Marketing, sales and service performance evaluation
Coming closer to the customers
One common single view of the customers to all the departments of the organization

CRM Software Packages

Customer relationship management should be preferably supported by an appropriate computerized CRM software package. There are many CRM packages available in the market. Organization should carry out an in-depth study of it's CRM requirements and decide on the package.

For More Guidance, Assistance, Training and Consultation

Contact: prodcons@prodcons.com

Also refer: http://prodcons-group.blogspot.com/, http://training-development-function.blogspot.com/and and http://productivity-consultants.blogspot.com/

Other Topics of Interest

Customer Relationship Management (CRM)

Wednesday, February 11, 2009

Customer Relationship Management (CRM)

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