The best definition I have come across is: “The philosophical and strategic use of people, process and technologies to design and deliver better outcomes for the customers of an organisation which, in turn, result in improved performances for the organisation”
Customer Relationship Management (CRM) can be one or all of many things.
These are some of the terms that I have heard used to describe CRM. In my opinion, they are all subcomponents of a far broader topic.
- Citizen Relationship Management
- Sales Force Automation (SFA)
- Social CRM
- Customer Experience Management (CX)
- Digital Marketing
- Marketing Automation
- Multi-Channel Management (MCM)
The term “CRM” was coined by the software industry in the late 1990’s when trying to develop new markets for ERP (Enterprise Resource Planning) which was maturing rapidly. Interestingly, many of those companies are now moving away from the term “CRM” to distance themselves from poorly delivered initiatives with limited benefits to customers or the board.
However, CRM principles have been around ever since man first started to trade. Concepts such as bulk discount, developing loyalty and market identification are ancient concepts. However, with the growth of the Internet and the increasing power of software to deliver business efficiencies, it quickly became apparent to software vendors that CRM represented a huge potential market to target for line extensions of their existing products.
However, Technology alone does not necessarily bring benefits to the organisation purchasing CRM software. Without strong customer centric processes and without people trained, empowered and genuinely customer oriented, the attempts to derive business benefits internally and externally are more likely to fail.
Technology is just a tool. To use a metaphor, a knife is also tool. Used the right way, it can be used to carve things of great beauty or help us maintain life. Used the wrong way, it can maim, injure or even kill. However it is used, it is just a tool.
Therefore, good CRM practitioners will always straddle the 3 key drivers of change: People, Process and Technology in order to help realise benefits justifying such an investment.
People: Fully engaged, trained and empowered employees are more likely to deliver great customer service. This is proven. Get the Employee Engagement and Experience right and the Customer Experience will look after itself. Not my words, but those from Sir Richard Branson.
Process: The Business process should be built from the “outside-in”, not the “inside-out” in order to ensure that the customer is put at the heart of the process.
Technology: Innovative, easy to use and well designed software can enable a comprehensive transformation in the customer experience whilst delivering significant internal benefits too.
With CRM, those benefits should be internal efficiencies, greater customer acquisition, retention and profitability and a greater all round customer experience.
One final thought: Many organisations do not have buying customers. They may have Stakeholders, Influencers, Citizens or Partners. It doesn’t matter…the majority of the principles apply. In order to gain better outcomes for these “stakeholders”, it is important to seek business improvements based on your people, processes and technology.
Customer Relationship Management is therefore a business philosophy. It is as easy as ABC. CRM is really “A Business Culture”.