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Customer relationship management (CRM) has the business purpose of intelligently finding, selling to, marketing to and servicing customers. CRM is a broadly used term that covers concepts used by companies, NGO's and public institutions to manage their relationships with customers and stakeholders. Technologies that support this business purpose include the capture, storage and analysis of customer, vendor, partner, and internal process information. Functions that support this business purpose include Sales, Marketing and Customer Service, Training, Professional Development, Performance Management, Human Resource Development and Compensation.

Contents 1 Aspects 1.1 High Level Architecture of CRM 1.2 Technology considerations 1.3 Operational CRM 1.4 Analytical CRM 1.5 Collaborative CRM 2 Strategy 3 Successes 4 Privacy and data security 5 Market structure 6 See also 7 References

There are three aspects of CRM which can each be implemented in isolation from each other:

• Operational - automation of customer processes that offers support to a company’s sales or service representative
• Collaborative - the program communicates to customers without a company’s sales or service representative (self service)
• Analytical - analysis of customer information for multiple purposes

The technology requirements of a CRM strategy can be complex and far reaching.

The basic building blocks:

• A database for customer information.
• Operational CRM requires customer agent support software.
• Collaborative CRM requires an interactive system, e.g. an interactive website, automated phone systems etc.
• Analytical CRM requires statistical analysis software as well as software that manages any specific marketing campaigns.

Each of these can be implemented in a basic manner or in a high end complex installation.

Operational CRM provides support to "front office" business processes, including sales, marketing and service. Each interaction with a customer is generally added to a customer's contact history, and staff can retrieve information on customers from the database when necessary.

One of the main benefits of this contact history is that customers can interact with different people or different contact channels in a company over time without having to describe the history of their interaction each time.

Consequently, many call centers use some kind of CRM software to support their call center agents.

Operational CRM process customer data for a variety of purposes:

• Managing Campaigns
• Enterprise Marketing Automation
• Sales Force Automation

Analytical CRM analyzes customer data for a variety of purposes:

• Design and execution of targeted marketing campaigns to optimize marketing effectiveness
• Design and execution of specific customer campaigns, including customer acquisition, cross-selling, up-selling, retention
• Analysis of customer behavior to aid product and service decision making (e.g. pricing, new product development etc.)
• Management decisions, e.g. financial forecasting and customer profitability analysis
• Prediction of the probability of customer defection (churn analysis)

Analytical CRM generally makes heavy use of data mining.

The function of the Customer Interaction System or Collaborative CRM is to collaborate the multi channel service and support given to the customer; providing the infrastructure for responsive and effective support to customer issues, questions complaints etc.

Several commercial CRM software packages are available which vary in their approach to CRM. However, CRM is not just a technology, but rather a comprehensive approach to an organization's philosophy in dealing with its customers. This includes policies and processes, front-of-house customer service, employee training, marketing, systems and information management. Hence, it is important that any CRM implementation considerations stretch beyond technology, towards the broader organizational requirements.

The objectives of a CRM strategy must consider a company’s specific situation and its customers needs and expectations.

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It is important to distinguish between a sales software tool and a fully integrated CRM solution. Many small companies may very well meet their and their customer requirements by a sales tool linked to their e-mail system. A stand alone front end solution like this may perfectly well manage customer information, quotations, sales activities, customer interactions and quotations status. However, if customer behaviour and profitability is needed a more integrated CRM software package is needed which is a much more complex solution and interfaces needs to be built with the ERP, or MPS, financial and service ledgers.

While there are numerous reports of "failed" implementations of various types of CRM projects, these are often the result of unrealistic high expectations and exaggerated claims by CRM vendors.

Many of these "failures" are also related to data quality and availability. Data cleaning is a major issue. If the company CRM strategy is to track life-cycle revenues, costs, margins and interactions between each individual customer this must be reflected in all business processes. Data must be subtracted from sales, manufacturing, supply chain, logistics, finance, service .... databases. This means that a total business integrated processing system needs to be in place with defined structures and data quality. If not interfaces must be developed and implemented to subtract data from different systems. This creates a demand way beyond customer satisfaction to understand the full business to business relationship. Hence a CRM is much more than a fancy sales or customer interaction system.

The experience from many companies is that a very clear CRM requirement with regards to reports, e.g. ouput and input requirements, is of vital importance before starting any implementation. With a proper demand specification a lot of time and costs can be saved based on right expectations versus systems capability. A well operative CRM system can be an extremely powerful tool for management and customer strategies.

The data gathered as part of CRM must consider customer privacy and data security. Customers want the assurance that their data is not shared with third parties without their consent and not accessed illegally by third parties.

Customers also want their data used by companies to provide a benefit for them. For instance, an increase in unsolicited telemarketing calls is generally resented by customers while a small number of relevant offers is generally appreciated by customers.

Given below is a list of top CRM software vendors in 2005 with figures in millions of United States Dollars published in a Gartner study.^[1]

Vendor	Global Revenue (US$)
SAP	1,475
Siebel	966
Oracle	368
Salesforce.com	281
Amdocs	276
Others	2,233
Total	5,698

• Enterprise relationship management (ERM), method beyond CRM
• Enterprise Feedback Management (EFM)
• Business intelligence
• Customers
• Customer Intelligence
• Customer service
• Database marketing
• Mystery shopping
• Predictive analytics
• Sales force management system
• Web management system

1. ^ Gartner, Inc (2006-06-12). "Says Worldwide CRM Total Software Revenue Increased 14 Percent in 2005". Press release. Retrieved on 2007-10-08.