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Customer Relationship Management (CRM)
It is very difficult to provide a single, simple definition of the idea for ‘managing the relationships with the customers’ (CRM - Customer relationship management). Over time, the scope of CRM has gradually expanded and the fast Internet penetration contributes much to the increasing significance of relationships with clients. The increased global competition leads to a search for new ways to increase profits, one of which is the implementation of a CRM system.

One of the main delusions regarding CRM

is associated with the understanding that this term denotes a new type of information technology (IT), software applications or systems. This is actually very far from reality. CRM represents a business philosophy, which describes the strategy to put customers at the heart of business processes, activities and culture of the organization. IT is only the tool that allows companies to implement this strategy in the best manner. In other words, CRM is a result from the application of computer technologies in managing the business contacts of the company.

Several studies show that the cost of retaining of existing customers is significantly lower than the cost of attracting new ones and in some cases the difference is measured in times. Naturally, companies should make efforts to expand their range of users, but at the same time should focus on preserving their good customers. Increasing the ‘share of the individual customer’ or the work for the company provided by each good customer is just as important as the increasing market share. The idea behind CRM is that the company can increase its profit by managing the interaction with good clients.

The concept of CRM can be briefly defined as a business strategy for selection and management of relations with the most valuable customers. CRM requires a customer-focused business philosophy to support effective marketing, sales and subsequent services. You should know however, that CRM applications can contribute to effective management of customer relationships only when the company has the right leadership, strategy and culture.

Some basic facts about CRM

The adoption of CRM only as technology is in the basis of many of the problems in implementing the system and the subsequent sudden ‘weak’ results. To be successful, the company must look at CRM as an opportunity to change their focus from ‘fulfillment of obligations’ to ‘customer service’. This requires a detailed examination of all business processes in terms of relationships with customers, not only to maximize the efficiency and quality. A reorientation in the company culture is necessary, based on the fact that each employee contributes directly to building customer relationships. Management and staff in all departments should adopt the concept of CRM and learn to think in a ‘customer-focused’ way.

In addition to increasing sales, CRM can help increase revenue and customer loyalty. Through the proper implementation of the CRM system the company gets important competitive advantage, reduces its costs and receives a chance to open up new channels for business. The CRM system can participate in each of the following functions:
  • Contacts and leads management;
  • Customer service;
  • Price setting;
  • Process automation;
  • Marketing campaigns management;
  • Call center services management.
The determination of the functions that different businesses would like to implement should be based upon serious research and market analysis, distribution channels and consumer needs. A presentation in the Internet is beneficial to every company as it contributes to:
  • More accurate determination of the potential for expanding the business;
  • Fast servicing of orders and requests;
  • More economical offering of personalized information to customers;
  • Easy exchange of information with partners and suppliers.
Companies should know that the choice of CRM solution is by no means easy. Buying ‘random’ CRM system will likely affect negatively the future results of the company, and the case will become part of the thousands of failed CRM projects in recent years. The main problems are related to the integration of the CRM system, and the most common of them are:
  • Pre-building of interface, where you need a connection with other systems of the company;
  • Elimination of overlapping information, required by the integration of CRM with the back-office systems of the company;
  • Creating a single database, or ensuring access of the CRM software to the existing database.
Most of these problems can be avoided by preliminary planning and evaluation of all available resources of the organization which will be to the benefit for the successful and timely implementation of the CRM system.

It is worth mentioning that currently there are CRM solutions for SMEs with several hundred customers on the market, as well as solutions for international consortia with multi-million addressees. For determining the proper system the management of the company must consult with local suppliers (or the local representatives of world famous companies). If the company looking for CRM has already implemented an ERP system, the first place to seek advice is the provider of the ERP system.

Implementation of CRM

It is not possible to guarantee a solution for all the problems related to the CRM implementation in each company. There are several proven steps, however, the adherence with which could largely contribute to positive results:
  • Detailed description of the project before the start of the implementation. This is a requirement for the implementation of every project, but many overlook it in the implementation of CRM;
  • Ensuring the highest level management commitment;
  • Including representatives from all departments in the group responsible for the implementation of the CRM solution;
  • Providing additional budget and time for ‘unforeseen problems’
  • Considering of options for sharing risk (additional consultants, guarantors, and partners to ensure implementation of the project);
  • Revising all potential cultural issues. The implementation of CRM will allow a number of unnoticed earlier problems and ‘abuses’ to come to light which may cause opposition against the system among the personnel. In order to avoid this, the benefits and the main purpose of the CRM system must be made clear – to provide better customer service;
  • Staff training should not be underestimated as well, although it represents a large proportion of the expenditures on the implementation of the CRM system;
  • Last but not least – the application of CRM does not end with implementation of the system in the company. This is an ongoing process that should be constantly assessed and improved with the development of the company and the changing needs of its customers.