The emergence of CRM technology has strengthened customer relationships
As the business world moves forward and evolves, so too does the nature of business and best practices used by companies to successfully operate in business. Technology has had a significant effect on all facets of many business and industries in the last couple decades. This is more and more the case as time goes on. Technology alone does not guarantee accomplishment, however. Success comes when companies are able to leverage the strengths of new technologies, while at the same time maximizing business and cost efficiencies, and delivering products and services that consumers demand.
One of the biggest trends in business in the last fifteen years has been the emphasis on customer relationship management (CRM). CRM is essentially the linking together of basic marketing principles of customer loyalty and retention, and the emergence of database technology. Marketing gurus have long professed the importance of customer retention and customer loyalty. The challenge for many businesses was that there were limited tools available to effectively capture new customers and manage relationships with them. Customer retention was a concept with little backbone or front-end emphasis.
Database technology has arguably been the second greatest technological breakthrough in marketing, only behind the internet. Database development enabled companies an efficient and practical way to capture data about new customers and monitor behaviors of those customers over time. This has helped some companies. develop new market opportunities, segment existing markets more effectively, target specific customer segments with direct marketing promotions, and most importantly, identify the best customers and maintain a close working relationship with them.
Databases alone are actually of little use. A database is simply a collection, storage and retrieval solution for dumping and mining data. Of course, this is a key part of the CRM process. However, an effective CRM and marketing program combined with excellent customer service are what make database capabilities meaningful.
The first marketing issue tied to using a database for CRM is establishing touch points for collection of customer data. Retail stores often do this at the point of sale. Telemarketers may do this over the phone. However, much of the growth in database use and data collection has centered on web-based interfaces and software solutions that allow company.s to capture data directly from customer interaction with their websites. Why is the internet medium a key driver of customer data collection? It is extremely economical and efficient. All internet touch points do have behind-the-scenes people and resources serving as their engine and parts. But, connecting with a customer through a web touch point also typically requires no immediate human employee contact and allows for instantaneous collection and fast service for the customer.
This last point seems interesting. Customer service delivered with a human there to deliver it? For a business to truly grasp the point of CRM, it has to realize that the basic concepts as to what good customer service is about have changed. In today.s fast-paced, internet and technology-crazed environment, service is no longer just a personalized approach to helping customers. Do not be confused. Personalized ‘delivery’ of service is still a necessary component to customer service. People like to be treated well by those who deliver service to them.
However, customer service has expanded to include service components such as ‘efficiency’ and ‘convenience’. Why? Consumers have always wanted immediate gratification to whatever extent it was available. The difference for today.s consumer is that he is used to finding what he wants and accessing it immediately using the most advanced internet and technology applications. Thus, a customer service business must include these new service components in their offering to truly achieve the success that CRM is intended to provide.
Efficient service now means the ability to quickly and accurately serve oneself if immediate help is not available. It means having an easy to use and quick purchase and pay process available through the web. The good news for businesses is that this desire of customers for web-based applications plays right into the ability to quickly and automatically collect customer data. What.s more, e-mail marketing is now used to target select customers effectively as opposed to mass customers ineffectively. Consumers also like the ability to buy and shop on their own time and from the convenience of home, or wherever else they happen to be.
Once companies are able to offer solutions that meet new customer service expectations and allow for collection of data, they can embark on the rest of the CRM process. Data mining and analysis can be used to achieve marketing results previously indicated. Companies can pinpoint select audiences for promotions and marketing campaigns. Customer relationships mean better service, efficient business, and in the long run, better profitability.