An acronym that stands for Customer Relationship Management, or the process of interacting with past, present, and future consumers.
Customer Retention is Key
Interactions between an organization and its past, current, and prospective customers is critical to success. While it delivers a wide range of benefits, the central focal point of customer relationship management (CRM) is customer retention.
Customer retention is a simple concept. When customer needs are being met, and expectations are exceed, it is highly likely that current customers will remain customers, or be retained. The rate at which an organization can retain its customer base can be a key source of competitive advantage.
Primary Functions of CRM
CRM can be loosely divided into three categories:
Operational - These include the primary activities of CRM work. Operational CRM relates to integrating sales, marketing, and customer support to ensure that customer satisfaction is as high as possible.
Analytical - CRM has a substantial data-oriented side as well, particularly with the rise of useful CRM data gathering tools. Utilizing the benefits of big data (where available), organizations can accurately asses who their core consumers are, how they behave, what they're looking for, and how satisfied they are.
Collaborative - Finally, it's worth noting that CRM functions are collaborative across strategic alliances. Of particular importance are suppliers and vendors (earlier on the overall supply chain). For example, let's say you own a coffee shop. In sourcing your coffee beans, you notice customer retention is low if they order a particular roast of coffee. It may be worth discussing this with your supplier to either replace that particular roast, or identify what hasn't been working with the current batches.
Why Customers Appreciate It
Most importantly, organizations are doing all of this to make customers happier. The upsides to this from the customer point of view are fairly significant:
Marketing/sales messages are individualized to be of interest to the consumer
Pricing is constantly evolved to match what the market believes is appropriate
Quality of products are constantly assessed and, if necessary, improved by on consumer behavior
Customer support assistance is integrated across a wide variety of media channels
Of course, there are downsides as well. Ongoing discussions regarding privacy relative to the observation of consumer behavior are still relevant concerns for modern consumers. There is also a paradox in all of this. As organizations optimize for user tastes based on data, it is the largest data points that will drive changes. As a result, while some consumers will benefit (presumably the majority), the rest of the users are at risk of being ignored entirely.
Technology and CRM
It is also worth noting the significant impact of modern technology and modern tools on this area of management. From the vast sea of social networking tools like Twitter and Facebook, to far more specialized tools for monitoring, analyzing and assessing user behavior, the ever-increasing integration of technology is almost always a constant opportunity (and risk) for organizations. Listing each and every prospective tool wouldn't even be possible. For aspiring CRM specialists and data analysts, however, what's most important to keep in mind is that most tasks have supporting technological tools. Before diving into a complex problem, it almost always pays off to hop online and see what tools you could install to save you time and money while improving your efficiency and accuracy.