Client Relationship Management (CRM) means managing your client. It is a business strategy which is used to create and sustain long-term, profitable client relationships. It means understanding customers using quantitative and qualitative research, segmenting them and articulating positioning statements for each of the segments based on their expectations and contribution to profits. It is necessary in order to retain old customers, acquire new customers and improve profitability from the existing client base. The Concept of CRM makes its origin from the changed approach to business management and profitability. In other words, the traditional approach of making one-time sales is being replaced with making long-term commitments to customers. The new approach puts forward the need to have a proper customer/client relationship management (CRM) strategy in the organisation. It revolves around the customers. It is a set of processes of creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. It is a comprehensive strategy of acquiring, retaining and partnering with carefully targeted customers to enhance long-term relationships with them. This management approach seeks to create superior value for the company and the customers.
Client relationship and satisfaction is a critical dimension of every business initiative. Foundation of a successful business lay in its successful client relationship management. Client's satisfaction with the performance of the company depends on how well their professional and personal needs are addressed to by the company. Client's pay attention not only on what the company does but also on how well it does it. Hence, client's perception of service quality needs to be properly managed. An efficient and effective CRM strategy is beneficial to an organisation in several ways:-
- Most importantly, it helps the company to build and maintain a loyal customer base.
- It can have more volume of sales by selling more to the group of those customers with whom it has maintained a good relationship and are satisfied with the firm and its quality of services.
- It overtime incurs lower costs in serving those customers because of their Increasing confidence and lesser doubts or questions about the product.
- It can resort to lesser promotional campaigns in order to attract those customers.
- It also enjoys the benefit of retaining its employees if it has a stable base of satisfied customers.
Besides, customers also want to remain loyal to a firm because they also enjoy benefits from such long-term association. It gives them a feeling of trust and confidence in the firm's services along with a sense of a reduced anxiety about the product. Overtime, in a long-term customer-firm relationship, a service provider may actually become a part of the customer's social support system. Such customers may even receive special treatment from the organisation in the form of:- getting the benefit of doubt; being given a special deal or price; getting preferential treatment, etc.
A successful CRM initiatives start with a business philosophy that aligns company activities around customer needs. The level of professionalism, listening skills, availability, responsiveness, reliability, etc form an important part of the client relationship management. CRM covers all the methods and technologies used by the companies to manage their relationship with their clients. The process of CRM includes :-
- Identifying the factors important to clients
- Promoting a client-oriented philosophy
- Adopting client based measures
- Developing end-to-end processes to serve the clients
- Providing successful client support
- Handling client complaints
CRM virtually had its beginnings in Sales Force Automation (SFA) which is a process of providing the sales force of a company with technology support in order to improve the efficiency of the selling process. The main benefits of SFA are:-the improvement in customer service by helping the sales force responds quickly & accurately; improvement in sales force productivity; and better management control and visibility of the sales process.
Generally, CRM works at two levels:-
- Operational CRM :- also known as “front office” CRM, provides support to basic business processes such as sales, marketing, services, etc. It involves areas where the customer is directly in contact with the company. These contacts are classified into two:- (i) Inbound contact are the ones in which a customer accesses the company support center or website or meets the company employees. (ii) Outbound contact are the ones in which a sales representative of the firm makes direct sales to the customers or makes a sales call or e-mails a marketing message. These direct interactions are referred to as customer's "touchpoints". Each interaction with a customer is generally added to a customer's history and company can retrieve such information from the database as and when needed.
- Analytical CRM :- also known as "back-office" or "strategic" CRM, involves understanding the customer activities that occurred in the front office. It involves retaining existing customers and providing timely and regular information to them. It uses the technology to compile customer data to facilitate analysis and develop new business processes to refine business decisions.
Product-Centricity, is the key challenge that an organisation needs to overcome, in order to have a successful client relationship management. In other words, an organisation needs to become client-centric, because it will allow for a consistent interaction with its most important constituency, 'The Clients'.