7/13/2009

Let's discuss about CRMs....

Customer relationship management (CRM in short) is a software,a company uses to track its contacts( customers/suppliers,etc).
Its typical goal is to improve services provided to customers, and to use customer contact information for target marketing

Why a company choose to have a CRM solution?

Lets look at this simple equation:

Profit= Revenue-Cost

According to the above equation, there are two ways that you can increase company profit.
That's either by reducing the cost or by increasing revenue. If a company is 'cost-conscious' then it would prefer an ERP solution, where all your processes get streamlined, hence can optimize the costing. Prtimising processes may vary from raw material management to supply chain mgt, production optimization, sales distribution, finance and also may be HR processes.

If a company is more 'revenue-concious' then it would probably choose a CRM solution to increase its sales.

There are mainly two ways you can increase your market share.
1. Create new customers( prospects)
2. Retaining existing customers

Therefore you have t make sure that your CRM solution will address those issues adequately.
So how CRM increases market share?
It should help to device a good marketing strategy. A strategy which fulfill the following:
- identify suitable customer segments (customers, potential customers, partners, suppliers etc)
- Helps to focus customer needs well, thereby improve 'quality' of good or service
- coordinate marketing activities affecting customers that is to have a good communication strategy- establish multiple channels of communication
- create long term relationship based on value and satisfaction- to fulfill customer expectation
Keep this in mind 'while a potential customer is looking for you, your competitor's system will find him first than you'

How CRM retains customers?

CRM should have the ability to gather data about customers, store that data in a format that is easy to access, analyze and to use this information to market or to communicate with customers.
This is very valuable for a company who is engage in repeat business.
'Cost of acquiring a new customer is far greater than the cost of maintaining a relationship with a current customer' this in turn lower your cost of sales thus increase profit.

3 comments:

  1. Good article about CRM. How a CRM can be useful to increase the revenue of a company?

    ReplyDelete
  2. Thanks Janith.
    OK lets see this way...
    Revenue can basically be increased by new market share and customer retention.

    So how CRM increases market share?
    It should help to device a good marketing strategy. A strategy which fulfill the following:
    - identify suitable customer segments (customers, potential customers, partners, suppliers etc)
    - Helps to focus customer needs well, thereby improve 'quality' of good or service
    - coordinate marketing activities affecting customers that is to have a good communication strategy- establish multipls channels of communication
    - create long term relationship based on value and satisfaction- to fulfill customer expectation
    Keep this in mind 'while a potential customer is looking for you, your competitor's system will find him first than you'

    How CRM retains customers?

    CRM should have the ability to gather data about customers, store that data in a format that is easy to access, analyze and to use this information to market or to communicate with customers.
    This is very valuable for a company who is engage in repeat business.
    'Cost of acquiring a new customer is far greater than the cost of maintaining a relationship with a current customer' this in turn lower your cost of sales thus increase profit.

    HTH

    ReplyDelete
  3. Thank tharinda for ur reply.. now it makes sense.

    ReplyDelete