What Is CRM?

Where Are We? Where Are We Going?

December 13, 2001

Customer relationship management (CRM) is the hottest trend in information technology, CRM is the way for your company to become customer-centric, and customer-centric companies have satisfied, loyal, and profitable customers. They know how to acquire new customers, retain the right existing customers, and grow customer relationships. But what exactly is CRM? It has come to mean too many things: Most significantly, CRM is an all-pervasive corporate philosophy to be customer-centric. It is implemented through the direct CRM processes--marketing, sales, and service--as well as all the business processes that support them, and the wide range of applications that implement those business processes.

WHAT IS CRM?

Multiple choice: CRM (customer relationship management) is:

a) Sales force automation applications

b) A marketing buzz word

c) A corporate philosophy

d) Software that implements marketing, sales, and service business processes

e) Implemented by a wide range of applications

f) A way to improve customer satisfaction and increase business

g) The next wave in information technology

h) Very difficult to implement

i) All of the above

j) None of the above

Unfortunately, the correct answer is i), all of the above. We say “unfortunately” because h) is too frequently true, because b) and g) carry too much negative connotation and because a), while correct, is too narrow and, perhaps, even vendor-centric in its correctness. The best correct answers are c), d), e), and f). Here’s why.

CRM IS A CORPORATE PHILOSOPHY

CRM is a corporate philosophy because it is a fundamental approach to doing business. That approach is to be customer-focused and customer-driven, running all aspects of your business to satisfy your customers by addressing their requirements for products and by providing high-quality, responsive service. The philosophy extends to support customer managed relationships (CMR) where the customer is in the driver’s seat, determining the rules of the relationship. Companies that adopt this customer-focused and customer-driven approach are, thus, customer-centric.

The inverse of customer-centric is product-centric. Can you think of any products that your company could never effectively sell? Innovative though these products may have been, they probably didn’t solve any customer problems or address any customer requirements.

CRM Objectives

The objectives of CRM are straightforward:

• Acquire new customers

• Retain the right existing customers

• Grow the relationships with existing customers

No surprise here. These are probably your corporate business objectives, too, or at least your corporate marketing objectives; but the way that you state them and your strategies to achieve them may not be sufficiently customer-focused. As a philosophy, customer-centricity drives you to view your entire business from the perspective of your customers.

CRM IMPLEMENTS MARKETING, SALES, AND SERVICE BUSINESS PROCESSES

CRM implements the marketing, sales, and service business processes--the customer-facing and customer-touching business processes through which you interact with your customers.

All Business Processes Support CRM

Note this important point. While these are the CRM business processes, all of your business processes, and many business processes of your suppliers and partners, provide critical support for them. That support is achieved through business process automation and application integration. For example, your fulfillment system (or your supplier’s fulfillment system) must be integrated with your CRM system so your customers can find out when you’re going to ship their orders.

CRM Must Support All Touchpoints

That brings up another important point. Your customers interact with your direct sales reps, contact center reps, and Web applications. These interactions occur through a variety of touchpoints—the phone, face-to-face, a Web site, etc. Your CRM business processes have to support all these touchpoints, supporting a single and consistent view of your customers as well as a single and consistent view of your company.

A single and consistent view of customers is achieved by using the same customer information across all your business processes. This 360-degree view of your customers can be accomplished by defining a single customer data model and customer data implementation or, more practically, by integrating and synchronizing that customer data model across every business process that touches, faces, or supports CRM. Implementing a single and consistent customer view is a critical success factor for becoming customer centric. This implementation is never easy.

A single and consistent view of your company is achieved by providing the same marketing, sales, product, support, and order information to your customers across all the touchpoints through which they interact with you. This consistent “customer experience” can be accomplished in the same manner as single and consistent customer information. It’s also a critical success factor for customer-centricity and difficult to achieve. Illustration 1 shows visually the business processes and touchpoints of CRM, the business processes that support CRM, and the single view of customers.

CRM Business Processes, Touchpoints, and Customer Information

CRM-Business-Processes-Touchpoints-Customer-Info.jpg

© 2001 Patricia Seybold Group

Illustration 1. This illustration shows the business processes and touchpoints of CRM, the business processes that support CRM, and the single view of customers.

MANY CRM APPLICATIONS

CRM is implemented by a wide range of applications that implement the three direct CRM processes—sales, marketing, and service--and the many business processes that support them. The applications that implement these business processes are ...

 


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