Customer Relationship Management - Essay Example

Relation Management Relationship Management (CRM) has become a key activity in the corporate world. No matter what a company does, it requires to know its customers to such an extend that it may be able to predict what they might want to do next. This needs collection of data from wherever its possible and storage of that data in a database that can be used later for marketing, for support or for administration. The developments in information technology have enabled the companies to implement a CRM software solution that can do this job on an ongoing basis day in and day out. Everybody agrees on the merits of having a CRM utility in place to drive a company forward. The benefits of having a CRM system in an organization are “more effective reach and marketing, improved customer service and support, enhanced customer loyalty, greater efficiency and cost reductions, improved company communication and networking through better access to quality information.” (Rising to the challenge of CRM, 2000). The key to a successful CRM program has to decide the boundaries of its playground. One of the most important criterions while implementing CRM is whether it should be centralized or decentralized. And if centralized who should be in control of its management, the IT department or the most important department of the company depending on its product or service. In other words, which of the following options is the best 1) a centralized knowledge management system under the control of IT. 2) a centralized knowledge management system under the control of a primary user such as Marketing, or 3) a decentralized knowledge system based on product or market. The decentralized method is what most of the companies tried out in the evolution stage of the concept of CRM where a department had its own CRM program. Marketing people, for instance, collected the data and created their own database for their sales force to use by way of campaigns and offers. While the support staff worked on their own database. It was very effective on a local scale to such as extend that the particular database provided what they wanted and everybody was happy. But the developments in information technology demanded that the right data was available at every department at any point of time. CRM software solutions also evolved in tune with the technology so that data could be collected and disseminated by multiple media, face-to-face, telephone, internet, mobile devices etc. This meant that a decentralized database management system was no longer sufficient to serve the purpose of what CRM was meant for. So centralization of the knowledge management system was inevitable if a company where to grow into a multi-branch, multi-product outfit with global perspectives. Telecommunication industry is one where customer retention is of paramount importance. Some times the cost of getting a new customer is so high that they need a customer to be with them for a minimum period to just breaking even. Being a highly competitive market, keeping the customer happy is key to succeed on this front. CRM plays the vital role in understanding the customer needs and behavior. Companies like Verizon, are feeding information from a database into custom made programs, which use complex algorithms to observe customer behavior from their usage patterns. These programs are able to predict or observe vital information about groups of customers. Which can answer the queries such as which customers are likely to cancel their subscriptions or which customers needs a change in their billing plan etc. (Snell, 2000). If the data is not centralized and incomplete or fragmented data is fed into the system this arrangement will go haywire. The program will be give false information about customers, which could be fatal. So any company, which works on a global market, has to go in for a centralized database. (Snel, 2000). Now, the next question is who should manage this huge centralized knowledge database. Most companies have one key department. For a hospital, its service. For a airline it’s marketing, for a insurance company it may be administration. If this department can work with the IT people in-house or out-sourced that would be the best alternative of the two. There are enterprises wide CRM packages available off-the-shelf that many companies have customized and implemented which has had tremendous improvements in the efficiency on several of their processes. The telecom company Verizon, US had a particular problem of having to deal with a huge number email based queries and complaints from customers. The process of answering these was not satisfactory in terms of time, effort and accuracy. They went in for an e-crm deal with Kana Response who implemented their package which used artificial intelligence to group the mails according to their content and automatically answer them with the templates created from the records on similar mails. This is a typical example that indicates that a centralized database is an absolute necessity to achieve real-time data anywhere and anytime if process automation has to be achieved. (Krill, 2001). When a company has operations in more than one country, sometimes the merging of the two databases could prove tricky as several issues might come up such as different accounting systems, numerology, standards etc. But if the aim of having one-single comprehensive data on one customer the company has to work towards one single global database. Nikon, for instance, is merging its databases from five different European countries on to a central platform so that they can understand the buying behavior of its customers. A merged database will help the marketing in cross-selling and up selling plans. If a detailed and integrated record of a customer is available on the screen of a customer-facing executive, it will be a great tool in customizing the interaction to higher level that could result in increased sales and customer satisfaction. (Merits of centralized database, 2005). The third option of having a decentralized knowledge system based on product or market is not a viable option as the whole idea of CRM is to improve the overall performance of the company through improved customer relationship. Hence a product or market based knowledge system will only succeed in a small-scale organization dealing with just a few products in localized market. A good CRM system should be a centralized knowledge warehousing system that offers customized interfaces and solutions to each of organizations’ departments. Together with the transactions done by the customer, the information captured by sales and services teams becomes invaluable asset for top management to understand the customers and their needs so that products or services on offer could be continuously improved / altered. (Dawson, 2001). Reference Rising to the challenge of CRM, (2000). fst: Financial Services Technology. Retrieved May 21, 2008, from http://www.usfst.com/pastissue/article.asp?art=269907&issue=199 Snel, Ross. (2000). Fighting the Fickle, WSJ.com: The Wall Street Journal. Retrieved May 21, 2008, from http://interactive.wsj.com/public/current/articles/SB968956754675902638.htm Krill, Paul. (2001). Answering customers. InfoWorld. Retrieved May 21, 2008, from http://www.infoworld.com/articles/fe/xml/01/07/30/010730fecase.html Merits of centralized database, (2005). We Blog CRM. Retrieved May 21, 2008, from http://www.blogcrm.com/merits-of-a-centralized-database.php Dawson, Harvey. (2001). The New Face of CRM, Retrieved May 21, 2008, from http://www.dmreview.com/issues/20011101/4223-1.html Why Invest in CRM?, (2001-2008). CRM Today. Retrieved May 21, 2008, from http://www.crm2day.com/library/50021.php Read More