The English acronym CRM stands for Customer Relationship Management; a term that can be confusing but that is mainly based on two concepts: one is management focused on customer relationships, and the other refers to the software used for managing the relationship with customers.
Customer relationships are a key objective for any business; a goal that is not new but that has gained importance within organizations, especially in recent years, due to the use of new technologies, where customer experience is more than just an aim. It has acquired such relevance that it has developed an entire industry around it.
CRM is a relatively new term. In fact, not even the experts agree on a single definition. What is clear is thatit seeks to generate more profit by focusing efforts on customers. In the end, profitability means satisfied customers, which means, in turn, that it is a business strategy that gives prominence to customers and, together with good service, seeks to make them happy. The more satisfied a customer is, the more lasting his loyalty to the company.
Everyone knows that it is much more costly to attract a new customer than to retain an existing one. And that is what CRM seeks to achieve, to retain existing customers or increase their customer loyalty so as to increase profitability. This is the “secret” behind their growth and the reason why companies are increasingly putting more emphasis on promoting knowledge from their customers, which will allow them to find out opportunities for both cross sales and complementary sales.
Main objectives of CRM
Today, those with a competitive advantage are the ones that have a customer-oriented internal organization. Until recently, the main focus was on the product. Thus, this process requires implementing CRM software in the organization, that is to say, a computer system supporting the management of customer relationships, sales and marketing.
But only the use of this software is not enough, as the overall concept of CRM is, on the one hand, based on the software but, on the other hand, it should complement a management model that follows the philosophy of customer satisfaction we are discussing. This entails adapting all processes and behaviors that are related to the interaction with customers. A CRM enables identifying anything that creates value for customers to then provide it on time.
In this context, the new technologies, together with the CRM, allow us to know our customers better and offer them what they want at all times; differentiate marketing activities, thus saving costs; know the value of customers, which makes it possible to encourage cross-selling and loyalty strategies; and develop proactive and efficient marketing campaigns, among others.
Implementing CRM in the organization
It would be pointless to make the contact methods available to customers unless we enable efficient communication, in a rapid and bidirectional manner. Therefore, no matter if they contact by email, phone or social networks, the priority must be direct attention without having to go through various departments. Real-time communication is the best possible scenario.
Having a department in the organization that specializes in customer service can be essential to the effectiveness of the strategy, as many companies today still do not have a particular department or coordinator.
Another key aspect to integrating a successful CRM is employee training and education. Besides, it is essential to carefully select the tools, which must be adapted to the company’s needs. Before implementing a CRM, the company should consider whether they aim to increase sales, reduce costs or reduce the sales cycle.
The ultimate goal if we are to be successful, and regardless of whether we decide to install this or that software, is an organization focused on the customer, that is, customer-oriented. This involves systems and processes, but especially workers oriented to customer satisfaction. In this regard, it is necessary to define management indicators that measure the satisfaction of our customers. Thus, the organization will have feedback on what actually happens. Only then can we know whether these actions, including the implementation of a CRM, can be any helpful in terms of what really matters: having an increasing number of satisfied customers.
The management indicators measuring customer satisfaction should be of two types. First, the objectives, KPIs (Key Performance Indicators), numerical values that account for the percentage of claims resolved in less than two hours, orders served within 24 hours, etc., but we also need “subjective” indicators, that is, we will need to ask customers –not through endless surveys, but through short questions that can be answered in two minutes regarding what we measured in numbers. We need to correlate what we measure numerically with what customers really think in order to find out if we are directing our efforts to what they actually consider to be important. In our experience, we often encounter surprises when we do, because we sometimes do things only with a view to ourselves, “navel-gazing”, and not with a view to our customers.
Finally, it is worth mentioning that CRM systems can often become CMR systems (Customer Managed-relationship). It is a customer relationship complementary approach where customers are encouraged to control the relationship, so that they can manage the access to the information, the orders and others. To this aim, we also use a specific methodology and software and, most importantly, the huge capacity of the Internet.
Incorporating the CMR vision to our CRM management gives us a great value because it will increase customer satisfaction and often reduce costs. Yes, both things! Think of the case of electronic banking. It is us as customers who actually do the work; we consult balances, make transfers, buy or sell shares, etc. Banks are able to reduce their operating costs as these tasks were previously managed by their staff, either employed by the company or outsourced, so the cost now is far lower. Moreover, it is more practical and efficient for us because we can do it any time of day and with no queues. This is the advantage of the CMR approach to CRM systems, to achieve higher customer satisfaction with a lower operational cost for the company providing the service.
To conclude, today there is no alternative to a customer-oriented strategy, at least not in businesses that are not monopolies. Thus, the development and implementation of CRM systems is one of the keys, as well as the CMR approach where possible, which can help us close the virtuous circle we all strive for: more customer satisfaction at lower operating costs.