Like many other contemporary concepts, the concept of CRM in everyday practice provokes doubts related to its meaning and its scope. The reason for this lies in the fact that CRM is both a strategy, a process, and a system. It is difficult to define a concept that is ambiguous because it covers such a wide area. It should be noted that CRM is a concept developed within the framework of marketing relations and business philosophy that strives to meet the individual needs of consumers; making consumers happy and building systematic interaction with consumers transforms them into clients. In order to do this, a communication system needs to be established that will ensure immediate interaction with the consumer.
Through such interaction, anonymous individuals as mass consumers are transformed into individualized and personalized units, which not only systematically collect information, but also systematically provide information. That in itself presents a challenge when discussing CRM, since strategy, processes, and systems are part of one whole system. We will focus on all of these areas in this book, but for this chapter, we will mainly focus on the systems aspect of CRM.
Such a communication system, especially in the case of a large number of consumers, cannot be built without the use of modern technology. That's why CRM systems integrate into marketing and information systems, as well as management systems. Data is the basis for creating a consumer image and consumer profile that contains all the information and connections that you deem relevant; that is, a 360-degree view of the consumer, which effectively enables you to cater to their needs. Such a system also enables the selection of quality clients in terms of securing loyal consumers. Consequently, CRM enables the construction of a defensive marketing strategy that seeks to retain consumers and make good use of existing clients, which, in nature, requires less effort and resources than the implementation of an offensive marketing strategy.
CRM covers a complete sales process, and its strength manifests from contact between businesses and individual consumers. CRM has a presence not only in area sales activities, but is important in pre-sale and post-sale activities. CRM has evolved from so-called call centers that, except for sales purposes, and were used for post-sale activities, for supporting users of products or services.
CRM is currently a key component of ensuring modern businesses survive.
CRM software is used for customer-information systems and capturing, storing, processing, and sharing data within a company.
The main benefits of this are as follows:
- The IT system organizations need to support CRM systems which enforce you to define the roles of surrounding systems and to integrate them accordingly
- Data is kept in a highly organized and accessible manner, and CRM usually comes with predefined dataset relationships
- Data security
- A uniformed consumer view, that is, a 360-degree view
- A product and services catalogue
- Configure, Price, and Quote (CPQ) functionalities
- Data analytics with drill-down reports
- Process engines
- Business rules engines
- Campaign management
- Loyalty management
- A sales funnel and pipeline
- Customizable user interfaces
- Case management
These benefits are organizational, providing a great inside view of your organization, which enables you to optimize your internal processes and resource usage, while preventing errors using the business rules and process engines.
CRM imposes significant limitations on organizations that implement it. These limitations were not apparent for 20 years, but now they are hindering businesses in their efforts to deliver a great customer experience, and impose technical complications with exorbitant financial costs.
The most common problems with implementing CRM are those that stem from an organization's inconsistencies. Simply put, they occur when CRM is run by a separate department or departments within an organization, and there is no real perception of a CRM end-to-end strategy. These departments are most often marketing departments, specialized CRM departments, or sales departments. Relationships with consumers are not painful in the aforementioned departments; problems usually arise in departments that are in contact with consumers, such as customer service, personnel in stores, and so on. These departments usually do not have enough influence when the time comes to define CRM solutions, strategies, and processes. Relationships with users are not painful in parts of the organization that are, by their nature, tuned to their needs; problems arise elsewhere.
Contemporary organizations usually have obscure units, such as police cells, whose task is to sanction naughty users. Sadly, such departments often use traditional police methods from the era of an economic system that was common to the whole world, regardless of the political system. It is a kind of economic communism, or a monopoly. One bidding, one showing attitude toward users, which in essence comes down to the phrase you need us and we know what is best for you, or, as Ford said, you can get model T in any color you want, as long it is black. With fierce competition today, this approach is not a viable business strategy.
CRM systems fails to incorporate customer experience and customer needs in all departments, including departments that are, by nature, not customer-facing. To enable an appropriate customer experience, applications and strategies must be accepted by the whole organization in an easy and encompassing manner.
Although CRM usually involves a substantial amount of information regarding customers, data is used only for maximizing profit and does not take into account what is important to the customer. This kind of thinking is called inside-out thinking.
The features of inside-out thinking include the following:
- A company is concerned only about the baseline
- Appropriate customer experience is not imperative
- More importance is given to internal processes than to processes that tailor interactions with customers or partners
- Budgets are always assigned to internal needs
- Usually, an incorrect process triggers the implementation of inappropriate systems and, subsequently, assigning people to roles whose incompetent or are inappropriate
CRM is a monolithic system, and the purchase of your CRM will enable you to cover some parts of your customer-relationship strategy, but not all, and not in a good manner.
Integrating CRM with other applications and systems is not an easy task, and there are many caveats to consider and compromises to be made.
Time to market (TTM) can be long, which makes it costly. Usually, any change in CRM triggers changes in a myriad of other systems.
It is no secret that the majority of CRM-implementation projects fail or do not deliver appropriate value to a company. The usual method for CRM adoption is Big Bang, which demonstrates that most organizations still consider CRM, and subsequently, customer interaction, in a very rigid manner. With this method of implementation, there is very little space left for adopting changes that are needed to respond to the ever-changing business environment and consumer needs. It is not enough to implement CRM on time and inside budget. Technology needs to be flexible so that companies can rapidly incorporate new strategies and business objectives during the implementation of CRM. In a sense, CX/CRM projects do not end; they need to evolve alongside the market's evolution.
A CRM system, as a monolithic system, is not able to be flexible, no matter how well you have planned it or how skilled your team is. Another important aspect is that CRM systems are not tailored to support new channels of communication, such as cell phones and social media channels. CRM systems are great as a transactional database, and that was good enough for 20 years, but in today's world they are holding businesses back.