CHAPTER: 9
“CUSTOMER RELATIONSHIP MANAGEMENT”
What is CRM?
Let’s imagine you run a business and want to build strong relationships with your customers.
You need a system to track their needs, keep in touch with them, and make sure they are happy
with your products or services. This is where Customer Relationship Management (CRM)
comes in.
CRM helps businesses manage their relationships with customers and even potential customers.
It’s like having a guide that helps you understand your customers better, keep them satisfied, and
grow your business at the same time.
Strategic CRM
Now that we know what CRM is, let’s talk about how companies can make it a key part of their
strategy. Strategic CRM focuses on putting the customer at the center of everything. Think of it
as building a long-term plan to attract, satisfy, and keep customers coming back.
Here are the steps to do this:
1. Amplify Commitment: Start by listening to your customers. Their feedback is like
a treasure chest full of ideas. For example, if customers say they want faster delivery, you
can use this feedback to improve.
2. Build a Valuable Project Team: Get a team from different departments (like
marketing and sales) to work together on CRM goals. This way, everyone contributes to
making the customer experience better.
3. Requirement Analysis: Understand what customers need by doing surveys, market
research, or forming partnerships. For instance, asking customers about features they
want in a product can lead to something they’ll love.
This step sets the foundation for a successful CRM system, making it easier to manage customer
relationships as your business grows.
Three Phases of CRM
Once you have a strategic plan, CRM works in three important phases:
1. Acquire (Getting New Customers): First, you focus on attracting new
customers. Imagine you’re a food delivery app offering discounts to first-time users—this
is how you get people to try your service.
2. Enhance (Improving the Customer Experience): Once you have
customers, it’s time to make them happy. Quick responses, great service, and solving
their problems will ensure they stay. For example, if a customer contacts support, a quick
solution will build trust.
3. Retain (Keeping Loyal Customers): Finally, focus on keeping your best
customers. Reward their loyalty with special offers or gifts. For instance, frequent flyers
on an airline get free upgrades, which makes them feel valued.
These phases are like steps in a journey—first, you bring customers in, then you treat them well,
and finally, you make them loyal supporters of your business.
Benefits of CRM
Now let’s look at why CRM is so valuable for businesses. Each benefit builds on the previous
one to make customer management more efficient and effective.
Personalization:
o CRM helps companies understand customers better and send messages that feel
personal.
o Example: An online store suggests items based on your previous purchases,
making you feel like they know you well.
Customer Retention:
o When you fulfill your promises, customers trust you more. CRM systems can
automate reminders and follow-ups to ensure nothing is missed.
o Example: Sending a birthday discount shows customers you care about them,
encouraging them to stick with your brand.
Increased Productivity:
o CRM integrates tools like email and calendars, saving time for employees. This
means they can focus on customers instead of searching through files.
o Example: A salesperson can see their entire schedule, customer details, and tasks
in one place.
Enhanced Profitability:
o CRM helps companies focus on their best opportunities, like high-value
customers or promising leads.
o Example: A car dealer targets families looking for SUVs instead of students who
might not buy a car.
Saving Money & Time:
o Automating tasks like tracking campaigns and employee performance reduces
waste.
o Example: CRM helps track whether an advertisement brought in customers,
saving money on ineffective ads.
Data Security Compliance:
o CRM systems protect customer information using privacy settings and encryption,
which is crucial in today’s digital world.
o Example: Banks use encrypted CRM systems to protect customer accounts from
hackers.
Simplified Collaboration:
o Cloud-based CRM lets team members access data anytime, from anywhere.
o Example: A remote customer service agent can help a customer just like they
would in the office.
Each benefit connects to the other, creating a system that makes life easier for employees and
better for customers.
Challenges of CRM
While CRM systems are very helpful, companies face some challenges that need to be managed
carefully. Here are the six main challenges:
Data Entry Issues:
o Employees often don’t have enough time to update customer information in the
CRM system. If data is missing or outdated, the system becomes less effective.
o Example: If a salesperson forgets to add a new customer's contact details, the
company might miss out on important communication with them.
Handling Data Security:
o CRM systems hold a lot of sensitive customer information, like names, phone
numbers, and addresses. Without strong security, this data could be stolen or
misused.
o Example: If hackers access a company’s CRM database, it could lead to a major
breach, damaging the company’s reputation.
Lacking Scope Clarity:
o Employees may not fully understand the goals of the CRM system or how to use
it effectively. This happens when clear guidelines and training are not provided.
o Solution: Companies can organize workshops and training sessions to educate
their teams. They can also use Agile Project Methodology, which allows teams
to adapt to changing needs during CRM implementation.
Integration Issues:
o CRM software often needs to work with other systems like sales tools, marketing
platforms, or customer service tools. If it doesn’t integrate well, it can create
inefficiencies.
o Example: If a CRM system doesn’t sync with the email software, sales teams
may struggle to send follow-up emails to potential customers.
Lack of Time to Update CRM:
o Similar to data entry, employees might feel that they don’t have the time to
consistently update the CRM system with the latest information. This leads to
incomplete or inaccurate data.
o Solution: Automating some data entry tasks can save time and reduce errors.
Limited Features or Clarity in CRM Scope:
o Some companies might choose CRM software that doesn’t meet all their needs,
like lacking features for analyzing data or automating workflows.
o Solution: When choosing CRM software, companies should ensure it has all the
features required for their specific processes, like integration with marketing
tools, sales pipelines, or customer support platforms.
Connecting the Challenges
These challenges show that while CRM can be powerful, it needs proper planning, clear goals,
and strong support systems. If companies invest in training, choose the right tools, and ensure
data security, they can overcome these obstacles and make their CRM systems a success.
