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Customer relationship management, known to many as simply CRM, is an umbrella term for processes and methods designed to provide customers what they want, instead of what the company wants them to want. Many CRM systems like Sage CRM Software are data-dependent and data-heavy, relying on information about customers, from buying history to product use, and integrating it all in one huge database. This usually involves identifying, targeting, and retaining the most valuable customers for sustainable growth. This is often in stark contrast to the product-oriented approach most businesses espouse, where the focus is built around products and product lines. As such, it was not unusual for firms to have their marketing, sales, and IT departments separate, sometimes with no interaction and cooperation. Many have only realized that businesses with these vertically-oriented structures were often competing as much against other departments within the same company as against outside enterprises within the same industry. CRM is about putting processes and structures in place that cut across traditional firms’ vertical lines and instead focus on what customers need. Before CRM systems like Sage CRM Software were introduced, customers would sometimes be approached by the same company for several product guises over some period. Not one department was aware of what the others are doing at any particular time. This translates to higher levels of expenditure but decreased efficiency and productivity. Companies soon realized that building profits from increasing sale margins of individual products might not be a sustainable way of ensuring long term growth. This is because the marginal increase of profit levels diminishes with each customer as time passes. Companies will then have to keep finding prospect customers in hopes of keeping profit levels up, or at least constant. This does not bode well, both for customers (old and new) and the company. The task of continuously finding prospect customers will inevitably take its toll. They would be vulnerable to nit-pickers or to nimble customers that are from a different cost base, made possible by business deregulation and changing distribution channels. On the part of the customers, decreasing contact with the company would make them feel unimportant, and would most likely sever ties with said business. Today, more and more companies want to consider their customers as customers for life, and not just part of the traditional one-purchase-and-let-go client. Many enterprises have realized it is far less expensive to retain an existing customer than to find new ones. It is therefore important to determine a customer’s value, and do everything to keep the most valuable ones. Professionals like Sage consultants can offer expert advice on how to best handle your CRM system.
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