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What is CRM?

What is CRM?

Most of us here will know that CRM stands for Customer Relationship Management. But what is CRM as a concept? That’s where things start to get more complicated.

Here are a few definitions from around the web that, between them, sum up CRM.

CRM as a tool for managing interactions

Let’s start with Wikipedia, the encyclopaedia written by its customers, which says that CRM is “a model for managing a company’s interactions with current and future customers”, using technology to tie customer services, technical support, sales and marketing efforts together. It adds that CRM will measure marketing across many channels, manage support requests from customers, set appointments and manage call centres.

It remarks on the growing importance of social media in CRM and warns that $2 billion (according to a 2003 report from Gartner) is spent on CRM software that simply isn’t used; that in 2007 staff were considered by CEOs not to be using CRM systems and that 43% of respondents in the same survey said they were using less than half of the possible functions of their CRM systems.

CRM as a tool for customer satisfaction

Business Dictionary is shorter and more to the point with its definition that CRM is built around the “identification and satisfaction of the customers’ stated and unstated needs and wants”. It also highlights the role of technology in CRM. It goes on to state that CRM is built on profiling potential customers to both understand them and build better relationships with them. Integration of contacts, sales and support are identified and according to Business Dictionary the whole process is built around a database.

CRM as a belief system

Barn Raisers posts 21 bite-sized definitions from various experts. You can take your pick here – some focus on software while others are of the opinion that CRM is a philosophy – and there are some interesting graphics on CRM processes. Perhaps the snappiest and most easily understood definition comes from Jennifer Carnie of Customer Systems who ditches all the jargon to conclude that CRM is: “The belief that customers should feel like a VIP every time they communicate with your company.”

Social CRM and lifestyle data

Oliver Blanchard at Brand Builder has no time for philosophies, insisting that CRM is a function. His well-argued piece attempts to bring CRM into the future – or even the present – by defining social CRM. Essentially, he brings in the idea of ‘lifestyle data’ to the equation, but hopes that the term social CRM will become obsolete as our likes, follows and friends become an accepted part of business data collection. The piece is well worth a read.

CRM and customer loyalty

The most technical of our definitions is to be found at Ijeee.org (PDF) and amounts to an academic summation of the subject. It’s a dense read, but does attempt to define CRM before discussing it in detail. CRM can be a strategy, process or tool the paper argues, summing up the over-riding philosophy of CRM as, “Knowing your customers better will enable you to serve them better and keep them loyal forever.”

There are many more CRM definitions out there and if you’re interested in the subject it’s certainly worth taking a look around. While there is disagreement there is a lot of common ground, most of which centres on the fact that CRM is a good, if not vital, part of any business and technology is key to its success.

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Gordon Johnston

Gordon Johnston

Microsoft Consultant at Redspire
Gordon has been developing Microsoft products for 14 years and has a deep understanding of Dynamics CRM. He applies this experience to developing our client solutions which he pushes forward in consultation with clients.
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