The generally accepted purpose of Customer Relationship Management (CRM) is to enable organizations to better manage their customers through the introduction of reliable processes and procedures for interacting with those customers.

In today's competitive business environment, a successful CRM strategy cannot be implemented by only installing and integrating a software package designed to support CRM processes. A holistic approach to CRM is vital for an effective and efficient CRM policy. This approach includes training of employees, a modification of business processes based on customers' needs and an adoption of relevant IT-systems (including soft- and maybe hardware) and/or usage of IT-Services that enable the organization or company to follow its CRM strategy. CRM-Services can even replace the acquisition of additional hardware or CRM software-licences.

The term CRM is used to describe either the software or the whole business strategy (or lack of one) oriented on customer needs. The second one is the description which is correct. The main misconception of CRM is that it is only software, instead of whole business strategy.

Major areas of CRM focus on service automated processes, personal information gathering and processing, and self-service. It attempts to integrate and automate the various customer serving processes within a company.

Architecture of CRM

There are three parts of application architecture of CRM :

Operational CRM

Operational CRM means supporting the so-called "front office" business processes, which include customer contact (sales, marketing and service). Tasks resulting from these processes are forwarded to employees responsible for them, as well as the information necessary for carrying out the tasks and interfaces to back-end applications are being provided and activities with customers are being documented for further reference.

Operational CRM provides the following benefits :

According to Gartner Group, the operational part of CRM typically involves three general areas of business :

Integrated CRM software is often also known as " front office solutions." This is because they deal directly with the customer.

Many call centers use CRM software to store all of their customer's details. When a customer calls, the system can be used to retrieve and store information relevant to the customer. By serving the customer quickly and efficiently, and also keeping all information on a customer in one place, a company aims to make cost savings, and also encourage new customers.

CRM solutions can also be used to allow customers to perform their own service via a variety of communication channels. For example, you might be able to check your bank balance via your WAP phone without ever having to talk to a person, saving money for the company, and saving you time.

Analytical CRM

In analytical CRM, data gathered within operational CRM are analyzed to segment customers or to identify cross- and up-selling potential. Data collection and analysis is viewed as a continuing and iterative process. Ideally, business decisions are refined over time, based on feedback from earlier analysis and decisions. Business Intelligence offers some more functionality as separate application software .

Collaborative CRM

Collaborative CRM facilitates interactions with customers through all channels (personal, letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and channels. It is a solution that brings people, processes and data together so companies can better serve and retain their customers. The data/activities can be structured, unstructured,conversational, and/or transactional in nature.

Collaborative CRM provides the following benefits :

Improving customer service

CRMs are to improve customer service. Proponents say they can improve customer service by facilitating communication in several ways :

Improving customer relationships

CRMs are also claimed to be able to improve customer relationships . Proponents say this is so because :

Technical functionality

A CRM solution is characterised by the following functionality :

Privacy and ethical concerns

CRMs are not however considered universally good - some feel it invades customer privacy and enable coercive sales techniques due to the information companies now have on customers - see persuasion technology . However, CRM does not necessarily imply gathering new data, it can be used merely to make "better use" of data the corporation already has. But in most cases they are used to collect new data.

Some argue that the most basic privacy concern is the centralised database itself, and that CRMs built this way are inherently privacy-invasive. See the commercial version of the debate over the carceral state , e.g. Total Information Awareness program of the United States federal government.

Setting up a framework for CRM

CRM in Business

In this day and age the use of internet sites and specifically e-mail, in particular, are touted as less expensive communication methods, compared to traditional methods like telephone calls. This revolutionary type of service can be very helpful, but it is completely useless if you are having trouble reaching your customers. It has been determined by some major companies that the majority of clients trust other means of communication, like telephone, more than they trust e-mail. Clients, however, are not the ones to blame because it is often the manner of connecting with consumers on a personal level making them feel as though they are cherished as customers. It is up to the companies to focus on reaching every customer and developing a relationship.

CRM software can run your entire business. From prospect and client contact tools to billing history and bulk email management. The CRM system allows you to maintain all customer records in one centralized location that is accessible to your entire organization through password administration. Front office systems are set up to collect data from the customers for processing into the data warehouse. The data warehouse is a back office system used to fulfill and support customer orders. All customer information is stored in the data warehouse. Back office CRM makes it possible for a company to follow sales, orders, and cancellations. Special regressions of this data can be very beneficial for the marketing division of a firm.

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