Following the CRM Trend

Customer Relationship Management technology continues to mature and evolve, even into the budding applications of cloud computing and social networking.

Customer Relationship Management is a catchy concept that was developed in the 1990s as a method to improve the way businesses interacted with their customer base. When CRM first took off in the business world, the idea was much more appealing than the actual practice. Frankly, businesses were overwhelmed with the amount of time and costs associated with tracking and accurately maintaining the high volume of transactions. As time passed, however, companies began improving CRM software, allowing not only businesses to reap rewards, but their customers, as well. 

Rather than just gathering data for their own personal use, businesses began using this information to provide perks to their customers such as gifts, discounts and incentives. This is when customer loyalty programs were born. Frequent flyer programs, buy one get one free and other promotions all became available to customers based on the information and spending patterns collected using CRM products. Capturing and using this information was allowing businesses to increase sales while improving their customer service.

CRM as it exists today really began in the early years of this decade. As software companies began releasing more innovative, scalable and advanced solutions, the information became more practical to use in a dynamic way. Initially, CRM packages were viewed as technically complex, scaring off smaller businesses that did not have IT expertise on-site. As CRM evolved, companies began focusing more on the business strategy of CRM and worked the IT aspects into the business plan later. 

As companies began having difficulty supporting the large amounts of data, CRM package developers started depending more heavily on the Internet. With this increase of technology and development, CRM applications were less focused on any one single department such as sales, marketing and customer service. Data sharing between these divisions allowed for more collaborative work and understanding, providing better customer service from order to end product.

The most noticeable trend today is how the web is being utilized as a tool to provide access to these applications. This type of “cloud computing” or “software as a service” gives users the ability to access these applications using a web browser and a secure Internet connection rather than having the programs on their own computers. Thus CRM software is available by subscription, reducing the associated costs of hardware and IT services.  

So what is the future of CRM? New terms are evolving such as CRM 2.0 and Social CRM. A great definition was put forward by Michael Fauschette: “Social CRM is the goal to make the relationship with the customer more intimate and tied to the company by building a public ecosystem to better understand what they want and how they interact with the various company touch points like sales, customer service, etc….” 

This concept is no longer strictly about capturing data and using the information to manage customer contacts, but to develop more intimate, real-time relationships with customers. Facebook and Twitter are widely known social networking sites, which can be used to gather data and detect social trends, and are essentially great business tools. These social websites are where customers frequently voice their opinions, as well as give companies a venue to expose current products and services. The combination of these allows for a quicker completion of the customer feedback loop, thus helping companies react to trends more accurately. Businesses are still leery about how to incorporate these social websites into their CRM business strategies, but it’s only a matter of time before social networking will need to be examined more closely.

CRM has now reached a level of maturity that encompasses customer loyalty programs, technology and collaborative work efforts. At the end of the day, it doesn’t really matter how you define CRM, as long as you understand the effects of customer relationships on your business and how you can successfully apply these relationships to move your organization forward.
 
Paragon Consulting Services Inc., Baltimore, Md., offers the Metalware, Metalware Express and MetalNet software solutions for the metal industry. For more information, visit www.paragon-csi.com.
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Friday, September 30, 2016