For many organizations, Customer relationship management is an easy concept, but a hard reality. As the market consolidates, many people think that CRM is dead - or at least on life support.
CRM is a broad term that covers concepts used by companies to manage their relationships with customers, including the capture, storage and analysis of customer information.
To manage the relationship with the customer a business needs to collect the right information about its customers and organize that information for proper analysis and action. It needs to keep that information up-to-date, make it accessible to employees, and provide information to employees to know how to convert that data into products better matched to customers' needs.
The secret to an effective CRM package is not just in what data is collected but in the organizing and interpretation of that data. That's where computers come in handy (apart from the Solitaire you can play on them) Computers can't, of course, transform the relationship you have with your customer. That does take a cross-department, top to bottom, corporate desire to build better relationships. But computers and a good computer based CRM solution can increase sales by as much as 40-50% - as some studies have shown.
An example of a CRM application would be in a car manufacturing business (assuming they sell directly to end users). If they maintained a database of which customers buy what type of product, and when, how often they make that purchase, what type of options they choose with their typical purchase, their color preferences, whether the purchase needed financing etc., the manufacturer knows what marketing material to send out, what new products to promote to each customer, what preferences/options may swing the sale, whether a finance package should be included in the marketing material and when would be a good time to target each customer. They could use the information to build a relationship with the customer by reminding customers of service dates, product recalls, and maybe even to send the customer a birthday card.
