What Is Customer Relationship Management

Customer relationship management (CRM) is an approach to managing a company’s interaction with current and future customers. It often involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support.

CRM is a customer-oriented feature with service response based on customer input, one-to-one solutions to customers' requirements, direct online communications with customer and customer service centers that are intended to help customers solve their issues. It includes the following functions:

Sales force automation, which implements sales promotion analysis, automates the tracking of a client's account history for repeated sales or future sales, and сoordinates sales, marketing, call centers, and retail outlets.

Data warehouse technology, used to aggregate transaction information, to merge the information with CRM products, and to provide key performance indicators.

Opportunity management which helps the company to manage unpredictable growth and demand, and implement a good forecasting model to integrate sales history with sales projections.

CRM systems that track and measure marketing campaigns over multiple networks, tracking customer analysis by customer clicks and sales.

The implementation of CRM is likely to have an effect on customer satisfaction for at least three reasons:

Firstly, firms are able to customize their offerings for each customer. By accumulating information across customer interactions and processing this information to discover hidden patterns, CRM applications help firms customize their offerings to suit the individual tastes of their customers.[citation needed] This customization enhances the perceived quality of products and services from a customer's viewpoint, and because perceived quality is a determinant of customer satisfaction, it follows that CRM applications indirectly affect customer satisfaction.

Secondly, CRM applications enable firms to provide timely, accurate processing of customer orders and requests and the ongoing management of customer accounts. For example, Piccoli and Applegate (2003) discuss how Wyndham uses IT tools to deliver a consistent service experience across its various properties to a customer. Both an improved ability to customize and a reduced variability of the consumption experience enhance perceived quality, which in turn positively affects customer satisfaction.

Thirdly, CRM applications also help firms manage customer relationships more effectively across the stages of relationship initiation, maintenance, and termination.

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