Importance of Customer Relationship Management

| Updated: March 3, 2017 |

Growing Importance of Customer Relationship Management in the 21st century

The 21st century has seen the focus of the businesses shifting towards the customers. The new customer is playing an empowered role. He is in control, holding the reins and the balance is now tilted on his side. As a result, businesses are trying to engage their customers in new and better ways. Customer relations are important in each and every sector of the industry. While some companies have managed their customer relations successfully, the task is still a complex and challenging one. Not all companies have been able to tackle the CRM challenge so well because of the associated hurdles.

Customer relationship management is an important aspect of every business. It is because the customers are at the very centre of every business. They are the end users and the purpose of the business. In the 21st century, the competition has grown intense where several companies  are trying to target the same customer segment. The fate of the business brands is being decided by their customer base and how successfully they attract and engage the new customers.  In an attempt to retain their customer base, companies are trying to find new ways to connect with the customers and manage their customer base.  Brands do not want to lose them. It is only possible when they remain connected with their customers and engage them in better ways.

With time, the field of Customer Relationship management has also evolved. Technology has played a key role in the development of CRM. Now, more and more brands are using technology to better manage their customers and to relate with them. While technology might have eased the burden significantly, the problem is not solved in its entirety. Apart from just adopting the right technology, there are other aspects that too need to be managed. There are several difficulties due to which companies despite adopting great technologies are unable to manage their customers efficiently. However, the key thing is the growing importance of CRM in the 21st century.

This century has seen a technological boom. Technology has changed people’s style of communication as well as their style of business. Marketing too has undergone profound changes owing to the increased use of technology. This has changed how the customers have generally perceived brands. They shop more frequently from their favorite brands. Customers have information at their fingertips thanks to the growth of mobile technology. In this era, it does not take time for news whether positive or negative to spread fast. Customers are not ignorant anymore and it has made the task of CRM challenging.

From marketing to sales and customer service, the brands are trying to manage their customers’ experience and provide them with the best. You would come across several brands that have carefully crafted their customer service. Their focus is on maximizing customer satisfaction.  Amazon, for example has proved that the benefits lie in serving the customer. Being customer focused or customer oriented has become even important for the brands in the 21st century.  Positive customer experience leads to positive reputation and better brand image. So, unless you are focused at empowering your customer, you would end up being inside the closet.  

Disgruntled customers can hurt a brand’s image and sales worse than one can imagine. It is the era of social technology and people can share any form of news with a click. However, the key thing is that it was not possible to manage customer relations efficiently just with the help of the people. It is why a large number of companies have turned to technology to ease the burden. Still, CRM is a part of the process and not the end in itself. The end point is the customer experience and it has to be positive. No brand would love to lose his customers. It is why special CRM software are being used to keep the existing customers updated with the newest deals and releases.  Either you are able to keep your customers engaged or be ready to lose them to the competitor brands.

Either you keep your customers with you or lose their company. Competition has also made the battle even fierce where each brand is trying to outperform the other in terms of customer relationship management. CRM has also emerged as a strategy to manage competition. Just like customer service, CRM has been recognized as an efficient strategy for managing and maintaining the customer base. Every customer has different expectations and wants being served in a personalized manner. CRM has made it possible for the brands to provide their customers with a personalized experience and retain them longer. Today, the power of a brand is determined by the size of its customer base and its relationship with its customers. However, CRM is not an easy task because there is multitude of data related to sales and market trends that needs to be dealt with. The companies that  have been able to do it successfully have seen more success in the market than their competitors.

Any company that wants to successfully manage its customer relationships needs to focus on CRM technology.  A  successful CRM strategy is based on the efficient use of technology. The focus must remain on forming long term relationships with the customers. Information technology and web-based communication systems are being increasingly used for this purpose. The software based and internet based CRM systems have been found to be particularly effective.  The organizations are designing their websites and customer support systems to provide better customer experience. As already highlighted, CRM is a complex process and despite all the factors including skilled professionals and technology being in place, the process can fail. Mostly such projects fail because of data. A CRM project’s success depends on the availability of quality data. Sometimes companies may need to dig in various corners of the business to extract the right data for which a comprehensive and well integrated system may be required.

Data also needs to be transferred from various systems to the CRM system using proper interfaces. This is the technology side of CRM.  Unless there is proper level of synchronization between the people and the technology, the CRM systems cannot be used to full effect and may even fail. the problems grow bigger when companies jump on to the CRM bandwagon without understanding the requirements. While trying to find a solution in CRM, they deploy it without matching it with their needs. Companies must first evaluate their needs and formulate a CRM strategy before trying to deploy a CRM system. They must check how the employees can be motivated to use the CRM system. Only the latest technology is not  sufficient, appropriate training and staff motivation to use the  CRM are equally essential. Basically using CRM means taking a step ahead in the direction of customer orientation. So, there are some critical questions companies must ask before using CRM.

  • What is the meaning of customer orientation? What value does it hold in our business? 
  • What kind of data or information requires to be evaluated to get more customer oriented?
  • How much is IT being used across the organization for customer interactions and how skilled are our people at its use?
  • What is the most appropriate point to start the deployment of CRM technologies?

Companies must assess their needs, their customer needs and the skill level of the staff before the deployment of a CRM system. They must also evaluate if it is going to create some real value for their business and if a customer orientation will really be the right direction for business.

Sources :[EJournal] [UPET]

Abhijeet Pratap

I am Abhijeet Pratap, editor of notesmatic. I am an MBA with marketing (major). Apart from writing on various topics in business management, marketing and English literature, I like to read and write about technology.