CRM - Customer Management System

Today, CRM is known as an IT system for customer management. In the beginning, however, CRM was not a system, but rather a specific management approach and an IT system to implement that approach.

Nowadays, the system itself is often called CRM, but if you don't understand the original CRM, you may end up being swept away by the system and not be able to utilize it properly.

In this article, we will explain what CRM is in an easy-to-understand manner.

Table of Contents

1. What is CRM?

2. Why do we need CRM?

3. Why is CRM implemented?

4. What are the challenges of CRM implementation?

What is CRM?

CRM stands for "Customer Relationship Management." However, to describe the essence of CRM, it would be more accurate to use "customer relationship management. So, first of all, please recognize that CRM is a management method for managing customer relationships.

So what exactly does it mean to manage customer relationships? I think it's easier to understand if you put yourself in the customer's shoes.

For example, if you were to ask a system company to build a business application for you, which company would you choose, A or B?

System company A is a major player in the industry and has solid technology. On the one hand, they offer a variety of services thanks to their abundant human resources, but on the other hand, their completely systematized operations give a somewhat mechanical impression.

Nevertheless, the business applications are built as expected. The cost is still high because they are a major company.

System company B, this company is below the middle class in the industry, but they are thorough in understanding the issues of their customers. Because of this, there is a human touch in the transactions, and I can communicate with them with ease. Although they don't have the resources and technology of a large company, they are aware of the need for continuous support even after the business application has been built, and they are kind enough to provide an operational plan. However, the cost is a little lower than the big companies.

If you don't want the security of a big company, then most people would probably go with System Company B. This is because System Company B focuses on customer relationships and managing them, which results in great benefits for the customer.

Managing customer relationships means organizing products, services, business models, marketing, and information from the customer's perspective, always providing what the customer wants at the best time, and encouraging continued use of products and services.

This is the essence of CRM, and it is a management method that cannot be realized simply by introducing an IT system.

Why do we need CRM?

CRM was born in the United States in the 1990s. Since that time, consumers have become more informed, and each market has gradually changed from a business-led one to a consumer-led one. The problem that arose from the corporate side was the diversification of customer needs.

As the distribution of information has become more organized and consumers can acquire information on their own, their needs have become more diverse. As a result, traditional marketing methods have become stalled, and the importance of a style in which companies adapt to the customer's point of view has increased.

In the beginning, Dell was one of the first companies to tackle CRM. BTO (Build To Order) is the term used to describe build-to-order (BTO) production in the PC industry, where customers are free to choose their preferred specifications from a catalog and request production. At the time, it was commonplace that the specifications of a computer were predetermined, and the purchaser had to choose from a predetermined combination of specifications. By developing a business model from the customer's point of view, Dell rose to the second-largest PC market in the world in just 15 years since its establishment.

Why is CRM being implemented?

This section will explain why CRM as an IT system has been widely adopted. Many people may think that it is possible to manage customer relationships without relying on an IT system. It is true that traditional customer relationship management is based on the customer information in the ledger and is executed by the experience and intuition of the sales staff.

In the past, such customer relationship management would have been fine because the needs of customers were constant, and the business environment was conducive to making predictions based on experience and intuition.

However, as mentioned earlier, customer needs have diversified, and today, each customer has diverse and complex needs. Therefore, customer relationship management that relies on experience and intuition, as in the past, will hardly have the desired effect.

Therefore, it is important to input customer information as data into the IT system, organize the information, and find the best solution each time through data analysis. Rather than relying on the uncertainty of experience and intuition, we can find business opportunities based on the solid facts of data, and again use the data to decide what action to take next.

Of course, a certain amount of experience and intuition is necessary because it is up to human beings to decide what to do and how to connect it to business. However, this is only one part of the whole picture, and what is important is the customer information that is useful for the business.

It would be almost impossible to manage such customer information manually. CRM is an IT system for managing, collecting, processing, analyzing, and utilizing data that cannot be done manually.

What are the challenges of implementing CRM?

The first challenge is to understand the essence of CRM, which is often perceived as a management method that can be achieved by implementing IT systems. However, IT systems only support the management, collection, processing, analysis, and utilization of customer information, not CRM itself.

If you want to increase profits through CRM, it is important to systematically organize your management methods and plan how to realize them with IT systems.

Another issue is to encourage the user department to use the IT system.

However, salespeople who are already busy with visits, business negotiations, preparing sales materials, and writing daily sales reports tend to shy away from implementing a new IT system because it will increase their workload.

Therefore, salespeople must understand the benefits of using CRM and IT systems before they are encouraged to use them.

If you are currently considering implementing a CRM, you should first ask yourself, "Do I understand the essence? and extract the various issues that stand in the way of implementation. If you are not in a hurry and clear the issues one by one, the benefits of CRM and the resulting revenue growth will become a reality.

Reference urls:

https://www.wellextreme.com/crm/
https://en.wikiversity.org/wiki/Customer_relationship_management