1.Describe customer relationship management and its role in supporting business operations.
CRM is a means of managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability.
The role of CRM in supporting business operations are:
-allows an organization to gain insights into customers' shopping and buying behaviors.
-A CRM system consists of a historical view and analysis of all the acquired or to be acquired customers. This helps in reduced searching and correlating customers and to foresee customer needs effectively and increase business.
-CRM contains each and every bit of details of a customer, hence it is very easy for track a customer accordingly and can be used to determine which customer can be profitable and which not.
-In CRM system, customers are grouped according to different aspects according to the type of business they do or according to physical location and are allocated to different customer managers often called as account managers. This helps in focusing and concentrating on each and every customer separately.
-A CRM system is not only used to deal with the existing customers but is also useful in acquiring new customers. The process first starts with identifying a customer and maintaining all the corresponding details into the CRM system which is also called an ‘Opportunity of Business’. The Sales and Field representatives then try getting business out of these customers by sophistical following up with them and converting them into a winning deal. All this is very easily and efficiently done by an integrated CRM system.
-The strongest aspect of Customer Relationship Management is that it is very cost-effective. The advantage of decently implemented CRM system is that there is very less need of paper and manual work which requires lesser staff to manage and lesser resources to deal with. The technologies used in implementing a CRM system are also very cheap and smooth as compared to the traditional way of business.
-All the details in CRM system is kept centralized which is available anytime on fingertips. This reduces the process time and increases productivity.
-Efficiently dealing with all the customers and providing them what they actually need increases the customer satisfaction. This increases the chance of getting more business which ultimately enhances turnover and profit.
-If the customer is satisfied they will always be loyal to you and will remain in business forever resulting in increasing customer base and ultimately enhancing net growth of business.
2.Identify the benefits and challenges of CRM.
The benefits of CRM are :
1.Storing data centrally creates a company-wide user network
CRM focuses the whole company on the customer. All areas and departments – from Sales, Marketing, Customer Service, Accounting, the Switchboard, through to Management – use one standard, centralized CRM solution. Depending on their individual rights, employees can access information in other departments, enabling them to work together effectively and efficiently. This results in structured, automated process throughout the company.
2.Customer dossiers provide all the information Customer dossiers are the foundation of professional customer care. They provide you with a 360 degree view of all your customer's information: appointments, tasks, telephone notes, correspondence, sales opportunities, complaints, orders, delivery notes and projects. The result: your employees are always well informed and can always provide professional advice and make informed decisions.
3.Customer knowledge reveals potential for development Knowing what customers and the market want is essential for further developing products and improving services. Customer profiles provide the best source of information, whether in sales or customer service. Multidimensional analysis highlights correlations and is used to identify potential for further development
4.Efficient and motivated employees provide the best service Acceptance among employees and consistent focus on the customer are the key to the successful deployment of a CRM system. Those who use a software solution to keep up to date on their customers, perform routine tasks more efficiently, make informed decisions and delegate tasks to specialists, have more fun at work and are more motivated. Customers can sense it – they appreciate friendly, competent staff.
5.Communicative measures depend on customer value
Demands and potential vary from customer to customer and they therefore require personalized interaction. This interaction depends on the customer's value to the company. Customers are segmented according to their value and the appropriate marketing and service measures are then agreed on. This enables your sales force to operate more efficiently, recommend the right product at the right time, and up- and cross-sell, thereby achieving better results. This way no sales opportunities are missed.
The challenges of CRM are :
1.The expensive costs that occur when implementing the system. It is a huge investment to maintain a customer database. The additional expense comes from the money needed for the computer hardware, software, and personnel that is needed to maintain it. These exorbitant costs can lead to a negative vibe within the company and can result in a CRM collapse.
2.Inadequate focus on objectives. This typically occurs after the CRM system is implemented. When hard times hit, the organization may lose sight of its goals and eventually steer away from the clearly laid out objectives. Goals may get interchanged
and ultimately lose their original importance.
3.The insufficient resources. Organizations start lessening their budgets for the current phase in order to handle the initial exorbitant costs. Organizations tend to fail at utilizing the necessary resources for success and that can result in failure.
4.Inappropriate metrics also cause a dilemma in a CRM system. Organizations constantly fail to use the right metrics. Failure to chose the right method of measurement is a main reason of why this system may not work. Different metrics implement different goals.
