The Customer Relationship Management and Its Importance

Home Articles The Customer Relationship Management and Its Importance

The organizations have to interact with the customers on a regular basis. It is so essential in this age of cut-throat competition among the companies that they keep no stone unturned to hold the attention of the customers. The practices which the organizations use for managing and analyzing the interactions of the coma y with the customers is called as the practices of customer relationship management. The marketing managers keep the information saved regarding each interaction and use it as a tool for taking a reference to improve the relationship with the customers. This is the technique is used by the companies to retain their valuable customers and increase their revenues. There are several points of contacts between the customers and the company, and in CRM the managers keep all their records so that the information can be used for future reference also. In CRM the companies add and compile all the necessary information about the customers, their interests and their buying behaviours etc.

Here the companies not only focus on their current customer base but they also keep the communication open to reach the potential customers as well. For the CRM practices, the managers have first to analyze the data which is gathered by the organizations regarding the consumer behaviour. This becomes a huge factor in improving the business relationships and generating a high level of revenues and profits. The growth in the sale of a product or service is the primary focus of any business process, and the CRM database and its strategies help the organizations achieve that goal efficiently.

There is various communication channel with the help of which the companies can convey their message to the consumers. The CRM system collects the data from all the mediums which an organization is using to interact with its customers, and then it compiles and saves that information so that the CRM managers can refer to that data and take a right and profitable decision for their company. Different communication channels which can be used for CRM purpose are emails, brochures, pamphlets, telephones, the website of the company and the options of live chatting on it etc. With the help of active CRM strategies, the companies can quickly get to know about the orientation of their target audience and then they can develop procedures how to meet the specific needs of the customers to retain them. Customer relationship management can be considered an extension of studying the consumer behaviour. Consumer behaviour is the process of investigating the needs and demands of customers and then implying the findings by collecting data on improving the business processes and the product quality. To understand different motives which help the customers to buy a particular product or service you can read the article “Concepts of purchase motives in Consumer Behavior.


There are different types of CRM strategies, and the companies can adopt them according to their overall goal which is discussed as below:

  • The Strategic CRM

Every business house has a strategic goal, and all their procedures should be designed in a way that ultimately achieves or helps in achieving those strategic goals. The practices of customer relationship management which focus their energy and time on creating a culture and environment in the organization which strongly emphases on the customer-centric approach. Here the higher officials lay down the plan for reaching and communicating with customers so that it becomes a part of the regular process of the company. It is highly significant that all the operations of the companies should bring in the results which support to achieve the strategic targets of the firm. Therefore the CRM processes should also be formulized in such a way that it helps the organization to achieve their long-term goals.

  • The Operational CRM

If we talk about the fundamental purpose of having an active CRM system, then it is to integrate various factors such as marketing, the customer support system and the automation of the sales etc. The operation CRM takes acre about the process and data necessary to make a communication fruitful with the customers. In operational CRM, the managers have the data regarding the sales of past; marketing efforts made previously, the information about the client including its buying behaviour or their inclinations and influences etc. There are three main components in the process of operational CRM, and that is the marketing automation, the sales force automation and lastly the service automation.

A. The marketing automation technique

This automation technique in CRM focuses on making the entire marketing processes and procedures more efficient. The managers can automate those tasks which they have to perform repeatedly. For example, the CRM managers can automate those promotional and marketing emails which they have to send to the customers on a regular basis or when the company is running a scheme. The goals of this CRM practice is to convert the potential customers to their full customers. With the help of the tools of social media, the marketers can create a customer engagement program to retain them.

B. The sales force automation technique

This technique of operational CRM encompasses all the stages which comprise a complete sales cycle. It starts from the initial phase of entering the information about the customers till the stage where the companies successfully convert the prospective customers into their clients. Here the marketers have to do an efficient analysis of the sales promotions techniques, and then they have to automate the tracking of the customer’s history of sales. This method helps in preventing the duplicate efforts have the salesperson has to make to contact a particular customer. This method also helps the companies to do the follow-ups and track all the contacts which are present in their database.

C. The service automation

In this technique of CRM, the primary focus of the marketing department is in the process of providing service to the customers. The companies use multiple channels so that they can support the service delivery such as the use of knowledge base, telephone, email, SMS, websites, web portals, FAQs and many more.

  • The Analytical CRM

The companies collect the data to find out the behaviour and interest of their current as well as future customers. They have to analyze the received data to find out the what their customers need. On the basis, of these findings, the marketing managers can take a better and informed decision to capture more market share. Various methods and tools which are used to analyze the information here are a correlation, the recognition and analysis of patterns of the buying behaviours, data mining etc. The organizations can increase their customer service many folds by adopting the analytical CRM technique. The marketers can solve the problems with the right decisions and affect the consumers positively and differently.

  • The Collaborative CRM

Many stakeholders work together to run the processes of the companies which include the distributors, suppliers, vendors etc. so that the information regarding the customers can be shared across the organization. This is a tool to collect effective feedback regarding the perceptions and the interest of the customers from the stakeholders which can be useful and helpful for marketing their products and service in a given market. The managers can also keep in mind to use that information when they have to contact the same set of customers in the future.

  • The Customer Data Platform

This is a market-based management system which is used by the organizations for creating a productive and profitable relationship with the customers. The organizations use the CDP system when they want to build a unified database having information about the customers. This information is readily available on other devices also, and it makes it easy for the marketing managers to take right decisions for marketing processes. The data is collected un CDP system from various sources and then refined so that a single profile having all necessary details of the customers can be created. By adopting this technique, the data becomes highly structured, and all the connected marketing systems can use it. CDP helps the organizations to create a segmentation of the markets also that the organizations can personalize their marketing strategies as much as possible.

The Importance of Customer Relationship Management

The fundamental purpose of having a CRM department in an organization is to improve the relationship of the fir with its customers. Whether they are its existing customers or they can help its customers in the future. This is also an excellent way to keep the communication up with the customer base so that they do not forget about the brand. The CRM methods can also be applied to win over the former customers who no longer buy products or services of a firm. The organizations collect data from customer experience and then use that data to formalize better marketing strategies for the future. The organizations can reap many benefits by using active software which can collect, organize the information, then manage it so that the managers can retrieve it without any hassle. There are many advantages of the customer relationship management, and they are listed as below:

  • An improved relationship with the customers

With the help of right CRM strategies in place, the organizations can achieve better customer satisfaction. The customer dealings can be improved many folds when the managers what they are expecting from their product or service and the CRM data helps them to know this. The process becomes a lot more organized as well as easily manageable. When the employees understand the needs and expectations of the buyers correctly, they can serve them in a far better way. When the customers feel an organization values them, then it helps for making them loyal towards that company, and the customer agitation can also be decreased a lot with these practices. The customers can also spread a positive word of mouth about the service or product of a particular firm if they feel appreciated by them.

  • Generations of higher revenue and profits

When the firms can attract and retain more customers because they will turn to that business house when they require a product or service which they feel have valued their time and attention. The organizations can use the CRM information to run their marketing campaigns to a particular customer base where they know the product or service holds an exceptional value. With the latest digital tools the companies nowadays can target their customers with a right marketing campaign, and it will also ensure that their message has reached to them.

  • Optimization of the marketing strategies

The CRM data can help the marketers a lot to optimize their marketing process and decisions. With the CRM practices the companies also know about the needs of people, and then they can come up with right marketing strategy at the right time so that it has the maximum effect on the market and the customers buy their products and increase the profits for them. CRM also gives the information to the organizations that which customer group or region is more profitable for them and which one is not so valuable. With this, the companies can quickly optimize the marketing processes and use their resource efficiently to obtain higher gains. The marketers can also save a lot of time when they know where should they channel their resources, energy, time and attention.

  • Improvement of the internal communication in the company

When the companies follow an effective CRM strategy, then the internal communication among the employees also improves a lot. Different departments can work as a single team when they have all the data at their disposal. The profitability of the marketing process also grows a lot when it works with all other departments and understands other methods.