Focus On Sales And Customer Service example essay topic

What is CRM? CRM stands for Customer Relationship Management. It is a strategy used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. After all, good customer relationships are at the heart of business success. CRM is a comprehensive approach which provides seamless integration of every area of business that touches the customer - namely marketing, sales, customer service and field support-through the integration of people, process and technology, taking advantage of the revolutionary impact of the Internet.

CRM creates a mutually beneficial relationship with your customers. There are many technological components to CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends. What is the goal of CRM? The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers.

If it works as hoped, a business can: "h provide better customer service "h make call centers more efficient "h cross sell products more effectively "h help sales staff close deals faster "h simplify marketing and sales processes "h discover new customers "h increase customer revenues Why is CRM Important? The task of implementing and maintaining a CRM solution can seem overwhelming. But, when the goal of cheaper, faster, better customer service is considered, the results far outweigh the challenges. CRM, at no time, has been more crucial than it is today with heightened attention to cost cutting, revenue generation and customer retention.

CRM is not just a software solution, but also a set of skills and competencies that will enable a company to better leverage and profit from each and every customer relationship. In a tough economy, competition is more evident than at any other time, and the ability to compete on the basis of customer relationships is more important than ever. CRM, or Customer Relationship Management, is a company-wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty. True CRM brings together information from all data sources within an organization (and where appropriate, from outside the organization) to give one, holistic view of each customer in real time. This allows customer facing employees in such areas as 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.

Once thought of as a type of software, CRM has evolved into a customer-centric philosophy that must permeate an entire organization. There are three key elements to a successful CRM initiative: people, process, and technology. The people throughout a company-from the CEO to each and every customer service rep-need to buy in to and support CRM. A company's business processes must be reengineered to bolster its CRM initiative, often from the view of, How can this process better serve the customer? Firms must select the right technology to drive these improved processes, provide the best data to the employees, and be easy enough to operate that users won't balk. If one of these three foundations is not sound, the entire CRM structure will crumble.

If customer relationships are the heart of business success, then CRM is the valve the pumps a company's life blood. As such, CRM is best suited to help businesses use people, processes, and technology gain insight into the behavior and value of customers. This insight allows for improved customer service, increased call center efficiency, added cross-sell and up sell opportunities, improved close rates, streamlined sales and marketing processes, improved customer profiling and targeting, reduced costs, and increased share of customer and overall profitability. This sounds like a panacea, but CRM is not without its challenges. For CRM to be truly effective, an organization must convince its staff that change is good and that CRM will benefit them. Then it must analyze its business processes to decide which need to be reengineered and how best to go about it.

Next is to decide what kind of customer information is relevant and how it will be used. Finally, a team of carefully selected executives must choose the right technology to automate what it is that needs to be automated. This process, depending upon the size of the company and the breadth of data, can take anywhere from a few weeks to a year or more. And although some firms are using Web-based CRM technologies for only hundreds of dollars per month per user, large companies may spends millions to purchase, install, and customize the technology required to support its CRM initiative. The Evolving Focus of CRM CRM has always encompassed a broad set of sales, marketing, and customer service activities associated with serving customers, and attracting new ones. The scope of CRM has changed little over time.

What has changed is the focus of CRM. The first CRM initiatives launched in the mid-1990's focused primarily on improving a single service channel! X namely, the call center. Companies adopted new technologies and performance measures designed to streamline the process of answering and handling customer inquiries, hoping to increase customer satisfaction and their own operating efficiency. Later, companies widened this focus to include sales as well, implementing new automation tools to enhance salesforce efficiency and productivity. In the late 1990's, the focus of CRM expanded yet again to include more service and sales channels!

X such as the Web, email, and instant messaging! X giving customers alternatives for interacting with a company. This new phase of CRM, still under way today, was characterized by complex channel integration programs, intended to standardize customer treatment across channels and to gather more customer data at each contact point. Many companies also implemented data warehouses and customer analytics programs to help manage this data and mine it for deeper insights into customer preferences. All of these previous efforts have produced important benefits. Contact center initiatives enabled companies to reduce service costs while making transactions more convenient for customers (for example, by providing more self-service options).

Salesforce automation software made salespeople more efficient and boosted their ability to help customers (for example, by giving salespeople immediate access to pricing information on any product). Better channel integration made it easier for customers to deal with providers, and enabled companies to gather more information about customers. And Internet-based initiatives opened up a new avenue into customers' homes and offices for selling and serving. The New Focus of CRM Unfortunately, companies are now realizing that these investments, while necessary, are not enough to sustain a leadership position!

X soon, they won't be enough to maintain parity within their industry. Even as they perfect their sales and service applications, add more channels and expand their data stores, companies are discovering they must do more. Customers already expect more, and exactly what they expect changes at an ever-increasing rate. As a result, the costs of acquiring and serving customers are also skyrocketing, undermining the economics of customer interaction. Consider just one change indicator: brand loyalty. While the shopping habits of consumers in the 1970's and 1980's were highly influenced by the brand of the product or the company that sold the item, consumers today are less likely to purchase a specific brand or patronize a particular company simply because the brands are well-known.

The percentage of consumers who claim that they tend to stick with well-known brands when purchasing products and services has dropped dramatically for all age groups between 1975 and 2000. Even the percentage for individuals over 60 years old! X typically among the most brand-loyal consumers! X dropped 20 points in the past 25 years. 1. Many factors contribute to the erosion of brand loyalty.

One is the explosion in choice: the number of companies selling to consumers has mushroomed in the past two decades. In the U.S. retail sector, for instance, the number of book retail outlets has more than tripled since 1975; the number of discount stores has nearly doubled since 1970; and the number of apparel outlets has increased by 50 percent since 1970.2. Concurrently, the variety of items available to consumers has expanded significantly. The typical U.S. supermarket now carries, on average, more than 30,000 products. 3. In the financial services sector, an individual investor now has to select among 8,200 mutual funds for his or her retirement plan.

4. Hungry consumers in the United States have almost 850,000 eatery outlets to choose from! X nearly 220,000 of which are part of a regional or national chain. 5. Given all these new options, it's not surprising that buyers are spreading their purchases around! X especially in the United States and Europe, where an essentially static population bases enjoys an ever-expanding array of choices.

6. Accompanying the increase in choice is a huge jump in the number of messages! X marketing and advertising, emails, phone calls, etc.! X to which consumers are exposed. In 1985, consumers experienced an average of 650 such messages a day. Today, that figure is 3,000.7.

Direct mail certainly plays a role: the number of direct-mail pieces consumers receive each year has ballooned in the past two decades from 35 million in 1980 to 85.6 million in 1999.8. Telemarketing is also on the rise, as the average consumer receives between 60 and 90 telemarketing phone calls every month. 9. And, the average Internet user is flooded with hundreds of email messages a week!

X many of them unsolicited "commercial" pitches. Finally, customers are increasingly sophisticated, and increasingly unwilling to settle for less than the best. The Web and cable television give consumers access to more information than ever before, enabling them to compare offers from competing companies more easily. This combination of forces ensnares companies in a vicious circle of "Can you top this?" Today's customers know they don't have to accept shoddy service, high prices, or inferior products.

Through their experiences with value and service leaders such as Virgin Atlantic, FedEx, Wal-Mart, and BMW, consumers have been taught to expect more: what was once considered exceptional performance that only very high-end companies provided is now viewed as "table stakes" for any company that wishes to enter the game. Customer expectations now increase at a faster rate than most companies can match by relying on the traditional approaches to CRM. Consider the findings of a recent study that revealed that 74 percent of online customers will shop elsewhere if their inquiries are not quickly answered, and most expect online responses within an hour. 10. Consequently, many executives feel frustrated, like they " re running in place.

For companies to break free from this situation, the practice of CRM will need to evolve as dramatically as the business context has. Organizations will need to change the strategic focus behind their CRM programs once more, adopting the new methods and tools required to satisfy a new set of customer expectations and competitive demands. And they will also need to find new, better ways to execute their new vision to deliver the outcomes they seek. New Guiding Principles In the next phase of CRM, what will companies need to get right? Unlike previous efforts, which often lacked a strategic element, future investments should be based on a holistic strategy that ties together that company's customer, channel, and brand strategies and ensures the right capabilities (and only required capabilities) are developed. Companies should also focus not only on generating customer insights, but also on using those insights to drive all customer treatment activities.

In particular, they should use these insights to align the cost of serving individual customers with the revenue these relationships generate. Finally, they should also go beyond a focus on sales and customer service to include marketing! X specifically, by applying "management science" principles to improve the efficiency and effectiveness of what is too often viewed as a largely creative or artistic pursuit. As companies reshape the focus of their CRM programs, they should follow three guiding principles: Customer experience is essential to creating brand value. Smart logos, catchy jingles, or memorable commercials can play a major role in generating awareness, but they " re just part of the brand equation. Brand strength and brand value are the sum total of experiences that customers have with the company and all its products and services.

Customer insight should drive customer treatment, which is a critical component of the overall customer experience. Every contact customers have with a company contributes to their perception of the company. The more these instances of contact can be shaped and driven by deep knowledge of customers' needs, preferences, and behavior, the more positive customers' perceptions will be. CRM programs should be executed in a pragmatic way that mitigates financial and delivery risk. CRM is not about building elegant capabilities (based on the latest software packages) or serving customers at any cost. Rather, companies must be pragmatic, learning how to acquire the new capabilities they need with minimal upfront investment; how to reduce financial risk by reducing operating expenses, and how to increase both the predictability and flexibility of fixed costs.

Organizing for CRM Success Using these principles as the basis for future decisions will help produce a better return on invested capital, and better position the company to respond to customer demands. To avoid the pitfalls that have plagued past initiatives, companies will also need to address four key elements when executing their CRM vision: ".