Types of customer relationship management (CRM)

Customer relationship management (CRM) recognizes that customers are at the heart of a business and that the success of a business depends on effective customer relationship management. CRM focuses on building long-lasting and sustainable customer relationships that add value to both the customer and the company.

CRM is a business strategy for selecting and managing customers to optimize long-term value. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes.

We distinguish between three main types of CRM activities: analytical and collaborative.

1. Operational CRM

Operational CRM is related to typical business functions involving customer services, order management, billing/billing and automation, and sales/marketing management.

2. Analytical CRM

Analytical CRM involves activities that capture, store, extract, process, interpret, and report customer data to a user, who then analyzes it as needed.

3. Collaborative CRM

Collaborative CRM takes care of all the necessary communication, coordination and collaboration between suppliers and customers.

Other CRM classifications have been devised by the types of programs or by the services or products they offer.

The CRM evaluation

In general, CRM is an approach that recognizes that customers are the core of the business and that the success of the company depends on the effective management of relationships with them. It overlaps a bit with the concept of relationship marketing, but not everything that could be called relationship marketing is CRM. Customer relationship marketing is even broader, as it includes a one-to-one customer and vendor relationship. To be a true one-to-one marketer, a business must be able and willing to change its behavior toward a specific customer, based on what it knows about that customer. So CRM is basically a simple idea: treat different customers differently. It is based on the fact that no two customers are exactly alike.

Therefore, CRM involves much more than just sales and marketing, because a company must be able to change the way its products are configured or its service is delivered, based on the needs of individual customers. Smart companies have always encouraged the active participation of customers in the development of products, services and solutions. For the most part, however, being customer-oriented has traditionally meant being oriented to the needs of the typical customer in the marketplace: the average customer. To build lasting one-on-one relationships, a business must continually engage with customers, individually. One of the reasons many companies are beginning to focus on CRM is that this type of marketing can create tremendous customer loyalty and, in the process, help the company’s profitability.

eCRM (electronic CRM)

CRM has been practiced manually by corporations for generations. However, since the mid-1990s, CRM has been enhanced by various types of information technology. CRM technology is an evolutionary response to environmental changes, making use of new IT devices and tools. The term eCRM was coined in the mid-1990s, when customers began using web browsers, the Internet, and other electronic touchpoints (email, POS terminals, call centers, and direct sales). The use of these technologies made customer service, as well as service to partners, much more effective and efficient than it was before the Internet.

Through Internet technologies, data generated about customers can be easily incorporated into marketing, sales, and customer service applications and analytics. eCRM also includes online process applications such as segmentation and personalization. The success or failure of these efforts can now be measured and modified in real time, further raising customer expectations. In an Internet-connected world, eCRM has become a requirement for survival, not just a competitive advantage. eCRM covers a wide range of topics, tools and methods, from the proper design of digital products and services to pricing and loyalty programs.

These are three levels of eCRM:

1. Basic services include the minimum necessary services, such as the responsiveness of the website (for example, the speed and accuracy with which the service is provided), the efficiency of the site and the fulfillment of orders.

2. Customer-centric services include order tracking, setup and customization, and security/trust. These are the services that matter most to customers.

3. Value-added services are additional services such as dynamic brokerage, online auctions, and online training and education.