What Is Customer Relationship Management?

Customer Relationship Management or CRM as it is commonly known, is often related to software and business operating systems.  Well, just in case you don't know, CRM is much more than just a piece of software.  Customer Relationship Management is something that every department of a business needs to understand and embrace if it is to work properly.

Understanding The Customer

One of the key aspects to learning all about customers is collecting as much information about a customer as possible. Things such as names, addresses, contact numbers, age, sex, number of children etc all help a business to ‘classify’ and come to know their customers better.

One major benefit of a CRM Customer Relationship Management system is to produce analysis about the types of customers best suited to their business.  Armed with this information, businesses can then market to them in a more personal way, utilising the information previously gained.

Understanding The Customers' Wants And Needs

In addition to the information collected about the customers’ contact details, family and personal details, a good CRM system also collects information about their customers' buying habits and stores them in the CRM software package. 

This invaluable information about customers' buying habits can then be analysed and used to help the business identify what their customers really want or would be most likely to buy.

For example, perhaps your Customer Relationship Management information reveals that your best customers typically like buying ‘blue T-shirts’ in January for an average sale price of $19. You are then able to create a marketing promotion to send prior to January that will lead them towards buying a couple of T-shirts, and so create a sale worth $38.

The customer finds it helpful because it’s something they are already looking for in January, and the reminder you are offering might provide an incentive to buy more.

Target New Customers

An analysis using CRM software is a good way to target brand new customers.  The business could find out, for example, that single females between 35 to 45 years of age that earn between $40,000 and $60,000 are the ideal customer demographic for the business.

Utilising this information from the Customer Relationship Management system, the business could then purchase from a list broker a list of all the single females fitting the description and target their marketing towards them.

The Benefits of Customer Relationship Management

• The ongoing activity of improving the relationship with the customer helps to keep he customer more loyal to the company and thus improve the profitability of the business.

• The business can work more efficiently.  When a customer contacts the business, the customer service representative can produce the customers file within seconds, displaying all the customer's history and their interaction with the business.

• Knowing all the information about the customers, the marketing strategies can be targeted towards the customers in a personal way. Thus marketing to a defined target market with a past history the potential of improved results is far greater than marketing to a ‘cold’ list.