In which area is CRM used more often than in others?

Customer Relationship Management (CRM)

Table of Contents

  1. term
  2. Electronic CRM, Social CRM, Customer Experience Management and Programmatic CRM
  3. Characteristics of customer relationship management
  4. Components of CRM systems

term

Customer Relationship Management (CRM) is based on Relationship Marketing, which looks at relationships with customers, Knowledge Management with its increasingly extensive knowledge of customers, Business Process Management, which structures customer processes, and other new technologies, especially customer-oriented information systems.

CRM is understood very comprehensively as a strategic approach that is used for the complete planning, control and implementation of all interactive processes with customers. CRM encompasses the entire company and the entire customer lifecycle and includes database marketing and the corresponding CRM software as a control tool. The goal is to achieve optimal customer orientation.

CRM is therefore not an isolated instrument, but has to flow into corporate processes as a philosophy in order to achieve consistent customer orientation. The implementation of a CRM software tool is an important instrument for achieving an optimal overall effect.

The focus of CRM is on securing the continuity, stability and intensity of an economically attractive manufacturer / trade customer relationship, reducing the costs of acquisition and maintaining relationships, as well as initiating new relationships through reference effects of satisfied customers.

Effective relationship marketing primarily uses dialogue or one-to-one marketing instruments that support the interactivity between manufacturer and customer and lead the dialog with existing and potential customers.

At every stage of the customer relationship, there are different approaches and opportunities for specific CRM measures. Customer loyalty management begins with the first stage, the establishment of contact, even before the first purchase, so that an integration of pre-sales and after-sales marketing is necessary. The customer requirement lifecycle structures the different needs in a person's life phases. Relationship marketing measures can also be controlled with this approach.

There are different types of customer loyalty. In the context of CRM, it is not important that the customer is (contractually) bound, but the goal is to achieve a bond that is fed by the customer's satisfaction with the company and mutual trust

Electronic CRM, Social CRM, Customer Experience Management and Programmatic CRM

  • ECRM: With the increasing importance of online dialogue marketing, a new term was established: Electronic Customer Relationship Management is the digital customer loyalty process in which the company uses automated digital communication to respond to customer needs in a personalized manner.
  • SCRM: Since people are increasingly communicating in social media and dialogue marketing is also actively using these media, customer relationship management must also take these contacts into account. Social CRM involves the company participating in collaborative conversations with customers and interested parties in social media channels. Social CRM gives the company the opportunity to take part in interactive conversations, initiate word of mouth and gather insights and knowledge about customers.
  • Customer Experience Management (CEM): Customer Experience Management focuses on the customer experience, which results from the reflection of the individual customer experiences. The CEM process comprises the systematic analysis and design of interactions between a company and its customers.
  • Programmatic CRM: Programmatic CRM is a logical consequence of the development of CRM and Programmatic Advertising in order to allow automated and target group-relevant content. The display of an advertisement is controlled by data that is known about the user. When buying digital advertising space, customer profiles are used to calculate where the consumer is in the customer journey and what value is to be assigned to him. This then decides on the bid when the advertisement is displayed. Data and creative content are combined and optimized in order to reach the customer with the right content at the right time.

Characteristics of customer relationship management

The most important characteristics and goals of CRM can be described as follows:

  • Customer orientation: At the center of CRM is the consistent alignment of all company activities to the needs of customers and potential customers in the sense of holistic customer processing.
  • Long-term customer relationships: The aim is long-term customer relationships as a prerequisite for long-term customer loyalty, which should primarily contribute to increasing profit, market share and company growth, for example through reduced price sensitivity of the bound customers, recommendations, repeat and follow-up purchases, cross and up -Selling or cost savings through lower marketing costs. Furthermore, loyal customers contribute to an image gain and, due to the loyalty to the company, to an economic risk limitation even in critical situations.
  • Profitability orientation: The focus of customer care should be on customers who are particularly profitable in the long term. Information about this is provided, for example, by the value of a customer (customer lifetime value).
  • Individualization through differentiation of the customer relationship: An individualized or customer-specific one-to-one customer processing requires a differentiation of the customer relationships with regard to products or services as well as the dialogue with the customer.
  • Systematisation: Systematic customer processing geared to the needs of the customer must be guaranteed over the entire customer relationship lifecycle, from customer acquisition and retention to customer recovery.
  • IT application / CRM software: The goal of improving the quality of the customer relationship through differentiated customer processing focused on added value requires a holistic representation of the customer and must therefore be supported by special CRM software or IT technology. This enables the systematic consolidation and demand-specific provision of all customer-related information in the sense of an integrated information system and serves to make customer processing processes faster, more effective and more efficient, which should lead to an optimization of the relationship between the sales achieved and the costs incurred.
  • Increases in efficiency and effectiveness: The increases in efficiency and effectiveness result, for example, from a simplification of daily administrative work through process optimization, systematic data integration and distribution or a fast and targeted analysis of this data. Optimizing the internal back office processing processes, for example through workflow functions for the automated distribution of information, enables an optimal range of services tailored to the needs of the customer at the interface to the customer (front office area).

Components of CRM systems

The CRM instruments can be divided into the following three areas:

  • Operational CRM instruments: Operational CRM includes all CRM functionalities that support direct customer contact and are therefore located in the front office area. They aim to optimize the dialogue between customer and company as well as the necessary business processes in the areas of marketing, sales and service. The focus is therefore on solutions for marketing automation such as B. campaign management, for sales automation such as B. Computer Aided Selling (CAS), Interactice Selling Systems (ISS) or marketing encyclopedias with multimedia product presentations, and solutions for service automation, for example in the area of ​​complaint management. To avoid isolated solutions, the operational CRM must be connected to existing back office solutions such as ERP (Enterprise Resource Planning) systems, supply chain management (SCM) or computer integrated manufacturing (CIM) systems via powerful interfaces. This ensures, for example, that the customer can be given reliable information, for example with regard to the availability of products or delivery dates.
  • Collaborative CRM instruments: The functionalities of collaborative CRM relate to the interaction between a company and its (potential) customers with a view to effective and efficient customer processing. They are used for the entire control, support and synchronization of all communication channels required for this, such as B. Internet, mailing or telephony. The term “multi-channel management” takes this into account. The Customer Interaction Center (CIC) serves as a multimedia communication interface.
  • Analytical CRM instruments: The functionalities of the analytical CRM are aimed at the acquisition, processing and application-oriented evaluation of customer data. They enable, for example, an optimization of customer segmentation or the evaluation of the profitability of customer relationships as a basis for differentiated customer processing.

Analytical CRM functionalities lead through a targeted distribution of information to an effective design of customer processing. The focus is therefore on a qualitative improvement in customer relationships, which should result in increased customer satisfaction, customer loyalty and consequently an increase in sales.

The Customer Data Warehouse, in which all customer-related information from the various business processes is brought together and recorded, forms the database for the analytical CRM functionalities to be used, which are implemented using methods such as data mining, OLAP, business intelligence or data knowledge management.