Customer Relationship Management
Customer relationship management , CRM for short ( English for customer relationship management or customer care ), describes the consistent alignment of a company with its customers and the systematic design of customer relationship processes. The associated documentation and management of customer relationships is an important component and enables in-depth relationship marketing . In many industries (e.g. telecommunications , mail order , service companies), relationships between companies and customers are long-term. These customer relationships are maintained using CRM, which should have a significant effect on the company's success.
Customer approaches and customer loyalty play an important role, since the acquisition of new customers can be up to five times more expensive than customer loyalty. For this reason, in many companies all customer data and all transactions with them are stored in databases . This data can be integrated and processed so that it is available in the right combination at every point in the company. The data and transactions are always seen in the context of a company's processes.
CRM supports communication in the customer process with numbers, data and facts in order to focus attention in relationships with a high customer value (see: Key Account Management ) and to identify weak points in dialog with the customer. So CRM is software for. B. provide a structure to ensure a standardized work process.
In contrast to CRM, Stakeholder Relationship Management (SRM) deals with all business partners of a company, including partners and shareholders.
CRM is partly also a holistic approach to corporate management . He then integrates and optimizes all customer-related processes in marketing , sales , customer service and research and development across departments . This is done on the basis of a database with appropriate software for market development and, if necessary, on the basis of a previously defined sales process. The aim of CRM is to create added value on the customer and supplier side in the context of business relationships.
Since CRM operates in conjunction with marketing , its goals are often derived from the marketing goals. In general, it comes by analyzing the buying behavior and appropriate use of the instruments of the marketing mix , the customer satisfaction and purchase frequency by up- and cross-selling to increase to maintain the loyalty of existing customers with tailored actions and to make customers from prospects, the so-called conversion.
The aim of a customer relationship management system is to visually represent documented information that can be clearly assigned to a customer through merging, generalization, combination and abstraction in order to be able to offer meaningful answers to a maximum possible number of possible marketing questions. At the same time, central data collection reduces costs, increases the speed of response and delivery and improves customer orientation , as customers can be offered individualized services that meet their needs. Due to the fact that databases can be easily evaluated within the CRM, z. B. a change in customer behavior on a large scale speak for changed needs or new competitors.
Based on the assumption that CRM is a means of communication in the customer process , three areas can be identified for which CRM is particularly relevant: Marketing , Sales and Service . These three areas also define the internal and external organizational units (e.g. employees, customers, business partners, company areas) that are affected by CRM. The subdivision also serves to structure functional issues, e.g. B. when it comes to which functions should be available, especially in operational and analytical CRM.
Examples: The marketing department selects the customer data for a targeted customer approach within the framework of campaigns. Sales and service use a central database to acquire new customers as well as to maintain existing customers in order to give everyone involved in the company a uniform view of the customer and his / her history.
Acquisition or acquisition
The role of CRM in the acquisition of new customers is to address interested parties stored in the database using direct marketing or personal sales and thus to win them over as customers. By continuing the dialogue (direct contacts, invitations, competitions, surveys, etc.), the image of the potential customer is differentiated. From this, conclusions can be drawn about the general potential of the customer, his precise product requirements and, for example, a planned product purchase time.
A company contacts its customers at regular intervals ( outbound ). The employees inquire in after-sales management whether the company can do something for its customers. In doing so, it may offer new added value. At the same time, a number of services in the form of advice and service hotlines are provided ( inbound ) as part of complaint and service management .
For marketing, the CRM data is used to inform both new and existing customers with product information or image campaigns. This is done via customer magazines , electronic newsletters , cover letters, personal contact, closed offers on the Internet, special conditions or aggressive public relations and press work , so that the customer sees that he is of great importance to the company. At the same time, an attempt is made to obtain further information about customers for the CRM database, but direct customer surveys are also used.
Customer relationship management is usually divided into analytical, operational, communicative and collaborative CRM.
The analytical CRM carries out analyzes on the customer and transaction data merged in the data warehouse system using multivariate methods and methods of business intelligence such as data mining . In analytical CRM, it is important to obtain important information from customer data. In this way, emigration tendencies and fraud, as well as new target group characteristics can be read from the data. With analytical CRM you can better recognize and assess the characteristics, behavior and value creation potential of customers.
The interface between analytical and operative CRM is formed by campaign management .
In operational CRM, information obtained through analytical CRM is put to use. This can be customer reviews, such as B. ABC analysis , market segmentation or cross-selling , d. H. Increase in sales per customer by selling additional products. In addition, there is follow-up in sales, for example through newsletters, mailings or post-phone calls as well as the development of customer self-service systems. Conversely, most of the data in operational CRM is obtained for analysis in analytical CRM. The process is as follows: Gathering the first data in operational CRM ( chicken and egg problem ), further processing and evaluating the (operational) data in analytical CRM and initiating further operational campaigns as a result of which new operational data is obtained and a cycle is created.
The communicative CRM addresses the direct interface to the customer, e.g. B. the customer contact points. The communicative CRM provides the various communication channels for customer contact. This is now also referred to as multichannel management. This should ensure the management of the communication channels and their efficient use. Essential channels of communication are the telephone, both incoming ( inbound ) and outbound ( outbound ), the web with e-commerce and social networks , as well as e-mails and the classic letter / fax in the so-called face-to-face Communication.
Collaboratively or Collaborative CRM refers to the fact that CRM not only within an organizational unit is implemented or a company, but through organizational and company boundaries. In practice this can e.g. B. mean that CRM is not only implemented in the field sales organization , but in the entire sales force . Integrative concepts must then be found for pricing, discounts and target group focus in order to bundle forces and address the customer in a targeted manner and with uniform objectives and clearly defined responsibilities. This includes B. also the demarcation between new business and service business, especially for capital goods .
Collaborative CRM can also go beyond company boundaries and e.g. B. include external suppliers, external sales channels, external service providers, external logistics companies in a uniform CRM concept. By optimizing along the entire value chain , the process costs , the use of media and the process speed can be optimized even more extensively. In collaborative CRM - based on authors at the Harvard Business School (Kracklauer / Mills / Seifert) - a possible further development for category management (product group management) is seen. Collaborative CRM opens up new ways for industry and trade to jointly pursue customer acquisition, customer loyalty and customer development along the value chain, beyond pure product group management.
A software specially tailored to customer relationship management is called a CRM system. This is a database application that enables a structured and, if necessary, automated recording of all customer contacts and data. Due to their permanent and comprehensive availability, this data supports the work of sales employees in many ways. In larger companies, the data of the CRM system is often made available in a data warehouse for further manual or automatic evaluation using data mining or OLAP .
CRM systems are predominantly based on standard software products. Such programs are available on the market in a great variety and in all price ranges for typical requirements. CRM solutions for special requirements, on the other hand, are usually created as individual solutions . There is a multitude of offers in the commercial sector, not only for large companies, but also for the SME sector.
The ideal is to integrate the CRM software into the company's ERP program in order to avoid redundancies in data management. The data quality is such integration better as CRM to the recourse "Real Data": customer master data , transaction data from the quotations and sales order processing, etc. A problem of CRM is the huge amount of data that is created. The quality of the data deteriorates. The way out is a dirty CRM approach, in which the quality of the data does not have first priority, for example if only e-mail addresses are known without further information and the customer relationship arises later. Many systems fail here because mandatory information or analytical tasks cannot be carried out.
Most often, proprietary software solutions come into question when it comes to customer care. But there are also software-on-demand , SaaS and open source solutions. On-demand solutions are available immediately. In most cases, users only pay for use and save themselves the sometimes expensive technical infrastructure. Open source solutions are largely freely available and therefore inexpensive to procure. When making the selection, however, the options for adapting the software to the specific task in the company and the available interfaces in the existing software landscape are particularly important. The main part of the costs of customer relationship management does not arise in the procurement of the software, but as personnel costs in the planning and implementation of actions as well as in the maintenance of the data.
Which data is stored is, among other things. a. depending on the specific objectives of CRM and the company's branch . They range from simple contact through data to account to some very personal information such as credit information, personal information, criminal history or recoveries . It is therefore essential to ensure data protection is maintained when storing and processing the data and when granting access rights. This also applies without restriction if data collected within the scope of a data protection act is processed outside the scope of this data protection act. If it is possible to monitor the performance and behavior of employees in the relationship between customers and employees , labor law provisions must also be taken into account. In view of the legal situation, not storing and processing sensitive data (e.g. personal data ) is often the most practicable way to respect the rights of the people to whom this data is assigned.
Modern CRM systems support employees in daily customer dialog. In the case of incoming calls ( CTI ) or e-mails, etc., the appropriate customer data can be displayed directly using the sender ID. A clear contact history shows all points of interaction with the customer including notes. Emails and other files are linked directly. An integrated workflow engine with a ticketing system gives you direct access to sales opportunities or service tickets.
Requirements for a CRM system
- detailed address information
- complete customer history
- specific marketing actions
- Customer selection (for example by postcode, industry or activities)
- individual reporting
- simple customer statistics
- quick order info
- if necessary integration of an existing document management system
- Time management
- Multichannel management
- Integration of Office products
- integrated e-mail client
- Task management with follow-ups
- Data import and export, data migration support
Related concepts, shapes and new developments
Under Retention marketing is meant an approach of strategic marketing, with the aim of existing customer relationships or generally the customer loyalty to intensify, that is the so-called customer retention increase. The background to this is the fact that acquiring new customers is becoming increasingly difficult and expensive. See also the Pareto principle, which when applied here means: 80% of your sales are generated with 20% of your customers.
In retention marketing, important customer groups are identified in order to bind them to the company in the long term using targeted customer loyalty measures (examples here are customer or payback cards ). The basic requirement for this is a systematically applied market research to obtain customer data. These are then recorded in databases and form the basis of database marketing . According to Nieschlag, Dichtl and Hörschgen, customer loyalty can be defined as “a company's endeavor to bind customers to itself with economic, social, technical or legal means”; According to Peter, the term refers to “the establishment and maintenance of a business relationship as a non-random sequence of market transactions between supplier and customer”, whereby it refers to “customer loyalty as the realization or planning of repeated transactions between a supplier and a buyer within a depending on the customer Type of transaction for a specific period ”.
Social CRM (SCRM) is seen as a new trend for CRM. This is a corporate strategy that involves existing and potential customers in a collaborative dialogue via the Internet, especially via social media platforms and other digital channels. While traditional CRM is more based on an operational approach designed to effectively manage customer relationships, social CRM aims to meet customer needs while achieving corporate goals. Social CRM can be seen as an extension of traditional CRM.
The term Mobile Customer Relationship Management (mCRM) describes all measures of customer relationship management (CRM) with the aid of mobile Internet technologies.
However, the communicative, operational and analytical measures of the various corporate functions to achieve corporate goals must be adapted to the mobile Internet. Due to the technical design and constant spread of the mobile Internet, companies face new challenges, particularly when implementing the CRM goals of integration and individualization. Mobile CRM is particularly used for on-site appointments - it enables field staff to access customer data from anywhere. Mobile CRM is viewed critically because data security and availability cannot be guaranteed.
Extended Relationship Management (xRM)
xRM stands for Extended Relationship Management or any Relationship Management and underlines the ability of a CRM system to manage not only customer relationships, but all kinds of relationships between different entities. The x in xRM can represent customers, employees, suppliers, partners, competitors, but also more abstractly for machines, regions or services. An xRM system usually not only manages one entity, but several entities at the same time.
Vendor Relationship Management
Vendor Relationship Management (VRM) is a name for the practice of customer-side management of relationships with companies and other institutions and organizations. It is designed using software applications that are under the customer's control and allow him to integrate and utilize his data with the aim of using it on the basis of his own conditions. From a conceptual point of view, VRM is the counterpart to CRM, in which customers change from a passive participant in the relationship management process to an active participant.
Contact center CRM providers are interesting for small and medium-sized companies. These systems systematize the interactions between the company and its customers with the help of analytics and performance metrics that help users determine what to focus their marketing and customer service on. This gives the agents access to a caller's history and allows them to individualize customer communication. The goal is to maximize the average revenue per customer, lower the churn rate and reduce useless and unproductive customer contact.
The concept of gamification , i.e. the use of game principles and elements of game design outside the context of games, e.g. In a customer service environment, is becoming increasingly popular. The gamification of customer service environments involves the use of elements that are used in games, e.g. B. Rewards and bonus points for customer advisors as feedback for good work. Gamification instruments use agents' need for reward, recognition, success and competition and can motivate them in this way.
Automation of contact centers
The automation of the contact center, i.e. H. the coordination of contacts between a company and the public through an integrated system is intended to reduce the number of monotonous and monotonous tasks performed by agents. It does this through pre-recorded audio messages that help customers resolve problems. For example, in an automated contact center, a customer may be prompted by a series of commands to press a particular digit to speak to a particular contact center agent who specializes in the area the customer has a question about. In addition, customer questions and requests can be handled by software programs that are integrated with the agent's desktop tools. This also saves employees time.
While CRM systems are generally believed to be designed for customer-centric businesses, they can be used in business-to-business (B2B) environments to streamline and improve customer management. For the optimal use of CRM in a B2B environment, the software must be individualized and made available for individual people.
The main differences between CRM systems in a business-to-consumer (B2C) environment and CRM systems in a business-to-business environment relate to aspects such as the size of the contact databases and the duration of the relationships. Business-to-business companies typically have smaller databases than business-to-consumer companies, and there is relatively little revenue in business-to-business environments. The number of offers is lower in business-to-business environments, but in some cases their cost is much higher than for business-to-consumer items, and in a business-to-business environment, relationships are long-term built up. In addition, a CRM system for a business-to-business environment must be easy to integrate with products from other companies. This integration enables forecasting of customer behavior based on purchase history, invoices, business success, etc. An application for a business-to-business company must have a function that enables all contacts, processes and sales deals to be recorded in the Link the customer segment and generate a report based on this. Automation of the sales process is an important requirement for business-to-business products. In doing so, the sale should be effectively managed in all phases through to completion. Finally, an essential point is individualization. It helps the business-to-business company to build and maintain a stable and lasting relationship with the customer.
There is criticism of CRM u. a. the discrepancy between desire and reality. Depending on the source, between 70 and 80 percent of companies are planning to introduce CRM; But not even 20 percent have implemented this so far. (see customer orientation )
Since CRM is primarily defined from the company perspective through the handling of customer data such as age, place of residence or preferences, a discrepancy between the company's view of assumed customer expectations and their actual ideas is also criticized. In comparison, what is known as customer expectation management ( Customer Experience Management , CEM) aims to create an emotional bond between the user and the product or provider by creating positive customer experiences . The primary goal of CEM is to turn satisfied customers into loyal customers and loyal customers into “enthusiastic ambassadors” of the brand or product (“satisfied - loyal - advocate”).
Some data protection professionals see the customers' interest in their data being kept confidential as compromised or even breached.
- Closed loop marketing
- Customer Care Concept
- Customer Lifetime Value
- Know your customer
- Customer management
- Software on demand
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