Overview Customer relationship management(CRM)

Customer relationship management (CRM) has the business purpose of intelligently finding,marketing,selling to and servicing customers. CRM is a broadly used term that covers concepts used by companies, NGO's and public institutions to manage their relationships with customers and stakeholders. Technologies that support this business purpose include the capture, storage and analysis of customer, vendor, partner, and internal process information. Functions that support this business purpose include Sales, Marketing and Customer Service, Training, Professional Development, Performance Management, Human Resource Development and Compensation.

Technology considerations

The technology requirements of a CRM strategy can be complex and far reaching.

The basic building blocks:

• A database for customer information.
• Operational CRM requires customer agent support software.
• Collaborative CRM requires an interactive system, e.g. an interactive website, automated phone systems etc.
• Analytical CRM requires statistical analysis software as well as software that manages any specific marketing campaigns.

Each of these can be implemented in a basic manner or in a high end complex installation.

Operational CRM

Operational CRM provides support to "front office" business processes, including sales, marketing and service. Each interaction with a customer is generally added to a customer's contact history, and staff can retrieve information on customers from the database when necessary.

One of the main benefits of this contact history is that customers can interact with different people or different contact channels in a company over time without having to describe the history of their interaction each time.

Consequently, many call centers use some kind of CRM software to support their call center agents.

Operational CRM process customer data for a variety of purposes:

• Managing Campaigns
• Enterprise Marketing Automation
• Sales Force Automation

Analytical CRM

Analytical CRM analyzes customer data for a variety of purposes:

• Design and execution of targeted marketing campaigns to optimize marketing effectiveness
• Design and execution of specific customer campaigns, including customer acquisition, cross-selling, up-selling, retention
• Analysis of customer behavior to aid product and service decision making (e.g. pricing, new product development etc.)
• Management decisions, e.g. financial forecasting and customer profitability analysis
• Prediction of the probability of customer defection (churn analysis)

Analytical CRM generally makes heavy use of data mining.

Collaborative CRM

The function of the Customer Interaction System or Collaborative CRM is to collaborate the multi channel service and support given to the customer; providing the infrastructure for responsive and effective support to customer issues, questions complaints etc

Privacy and data security

The data gathered as part of CRM must consider customer privacy and data security. Customers want the assurance that their data is not shared with third parties without their consent and not accessed illegally by third parties.

Customers also want their data used by companies to provide a benefit for them. For instance, an increase in unsolicited telemarketing calls is generally resented by customers while a small number of relevant offers is generally appreciated by customers.

Market structure

Given below is a list of top CRM software vendors in 2005 with figures in millions of United States Dollars published in a Gartner study.