Question

How does customer relationship management (crm) help companies develop customer insights and deliver superior customer value?

Answer 1

Customer Relationship Management (CRM) is a process companies use to understand their customer groups and respond quickly—and at times, instantly—to shifting customer desires. CRM technology allows firms to collect and manage large amounts of customer data and then carry out strategies based on that information. Data collected through focused CRM initiatives helps firms solve specific problems throughout their customer relationship cycle—the chain of activities from the initial targeting of customers to efforts to win them back for more. CRM data also provides companies with important new insights into customers’ needs and behaviors, allowing them to tailor products to targeted customer segments. Information gathered through CRM programs often generates solutions to problems outside a company’s marketing functions, such as Supply Chain Management and new product development.

How Customer Relationship Management works:

CRM requires managers to:

Start by defining strategic “pain points” in the customer relationship cycle. These are problems that have a large impact on customer satisfaction and loyalty, where solutions would lead to superior financial rewards and competitive advantage.
Evaluate whether—and what kind of—CRM data can fix those pain points. Calculate the value that such information would bring the company.
Select the appropriate technology platform, and calculate the cost of implementing it and training employees to use it.
Assess whether the benefits of the CRM information outweigh the expense involved.
Design incentive programs to ensure that personnel are encouraged to participate in the CRM program. Many companies have discovered that realigning the organization away from product groups and toward a customer-centered structure improves the success of CRM.
Measure CRM progress and impact. Aggressively monitor participation of key personnel in the CRM program. In addition, put measurement systems in place to track the improvement in customer profitability with the use of CRM. Once the data is collected, share the information widely with employees to encourage further participation in the program.
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