CRM in Business - Definition, Purpose, and Benefits

Have you ever heard of the term CRM? As a business person, you may often hear the term CRM or Customer Relationship Management. CRM is a new approach in managing corporate relationships with customers at the business level to maximize communication and marketing through managing a variety of different contacts. This approach makes it possible to retain customers and provide added value continuously to customers.

CRM in Business - Definition, Purpose, and Benefits

CRM (Customer Relationship Management) combines policies, processes, and strategies applied by the company into one unit. The use of CRM is to interact with customers and also to track customer information. CRM is a new approach to managing relationships between corporations and business customers. With this relationship, the hope is that there will be communication and marketing through managing a variety of different contacts. This approach is taken to increase customer loyalty to the company as well as continuously added value. Nowadays, CRM implementations almost always use information technology to attract new profitable customers to the point that they have an attachment to the company.

The Purpose of CRM in Business

CRM is made for various purposes that ultimately achieve the final goal of the business, namely making a profit. These are the goals of a CRM:

  • Improve the relationship between the company and existing customers to increase company revenue.
  • Providing complete information about customers to maximize the relationship between customers and the company through up-selling and cross-selling sales to increase profits by identifying, attracting, and retaining customers who provide the most added value to the company.
  • Using integrated information to produce satisfactory service by utilizing customer information to meet customer needs to save the customer time.
  • Resulting in inconsistency in procedures and processes of delivering answers to customers.

Benefits of CRM in Business

a. Encourage Customer Loyalty

CRM allows companies to utilize information from all points of contact with customers, either through the web, call centers, or through marketers and field service personnel. With consistency and ease in accessing and receiving information, the service department can provide better service to customers by utilizing various important information about these customers.

b. Reducing Costs

With the implementation of CRM, sales and customer service can have a specific and focused scheme and can target services to the right customer at the right time. Thus, the costs incurred will be well detailed and not wasted which leads to reduced costs.

c. Improve Operational Efficiency

Ease of sales and service processes will be able to reduce the risk of decreasing service quality and reduce cash flow expenses.

d. Increased Time to Market

The application of CRM will allow companies to get information about customers, such as data on customer buying trends, which can be used by the company in determining the right time to market a product.

e. Increased revenue

As mentioned above, implementing a proper CRM will increase customer loyalty, reduce costs, increase operational efficiency and increase time to market, which in turn will lead to increased company revenue.

At first glance, it is not much different from a company's public relations, but these two parts are much different. CRM prioritizes customer relationships, while public relations prioritize the company's image in the eyes of customers. These two parts can work side by side but cannot be combined.

Stages in CRM

CRM consists of several phases and stages as follows.

a. Acquire New Customers or Acquire

As for acquiring new customers, several ways are needed:

  • Providing convenience for customers when buying certain products that are needed, such as responding to customer wishes quickly or providing on-time delivery processes for ordered goods.
  • Promoting the products the company offers by giving a good initial impression to customers because this greatly affects the assessment of the company.

The purpose of this stage is to offer good products through satisfying service to customers.

b. Adding Customer Value or Enhance

The company must be able to create a close relationship with its customers by listening to customer complaints and improving service. As for improving the relationship with customers itself, it can be improved through

  • Up-Selling, which is offering the same products but of better quality.
  • Cross-Selling, which is a sales strategy by offering complementary products to goods already owned by customers.

c. Retain Customers or Retain

  • Providing useful support services and applications so that the relationship with customers can be maintained properly. Customers will also trust the company because they get good service.
  • Provide time to listen to every customer need, such as serving customer dissatisfaction with the products offered by the company. That way, the company can fix errors for service improvement.

Components in CRM

CRM also has several components, including:

1. Customers

All parties who will, have, and are currently using the services provided by the company, whether in the process of viewing, making purchases, or maintenance.

2. Relationships

When companies want to build relationships with customers, two-way communication is needed. The aim is to provide long-term satisfaction to both parties.

3. Management

Customer relationship management focuses on managing and improving relationships. A solid relationship between the company and customers will help the company in developing a competitive advantage.

The key to the success of CRM is to establish good communication between customers and the company. As a business owner, never stop hearing criticism or suggestions from customers for the company. Not only that, but always satisfying customers is the key to the success of CRM.