4 Perils Of Crm Essay

636 words - 3 pages

Summary of ‘Avoid the Four Perils of CRM’

Different managers may define CRM in many different ways. Some may say it is the use of technology and software to achieve a better relationship with their customers, however the right way to define CRM is that CRM aligns business processes with customer strategies to build customer loyalty and
increase profits over time. The difference here with this definition is that the terms technology and software don’t play an important role in defining CRM.

Research has shown that many managers stumble upon one or more of the four perils while trying to implement CRM. All these perils are basically caused due to a basic assumption that CRM is a software tool that will manage customer relationship for us. The truth however is that it isn’t all about that CRM is actually the combination of customer strategy and processes, supported by the relevant software, for the purpose of improving customer loyalty ...view middle of the document...

This is because Effective CRM is based on good proper segmentation analysis and is designed to achieve specific marketing goals.

2. Rolling Out CRM Before Changing Your Organization to Match

One of the most dangerous pitfalls is installing CRM technology before creating an organization that is focused on its customers.in order to develop a better relationship with its customers the company should first of all bring in major changes to business processes that relate to customers. A CRM rollout will succeed only after the organization and its processes such as job descriptions, performance measures, compensation systems, training programs,and so on—have been restructured in order to better meet customers’ needs. It is very important to bring in these changes in an organization before installing any type of CRM in the organization.

3. Assuming that More CRM Technology Is Better

Another pitfall in CRM is assuming that the more intense the technology being used the better the CRM. This is not true at all. Complex and advanced technologies are not the only major requirements of a successful CRM system. Customer relationships can be managed in many ways. The objectives of CRM can be fulfilled without huge investments in technology as well. The organization should motive its employees to be more aware about the needs of its customers. The general assumption of considering high tech systems to be better than the low-tech ones is basically a cost pitfall for and organization. A successful company should be able to implement and work with any types of CRM systems. The managers should be able to understand the basic needs and strategies before selecting the level of technology to be used.

4. Stalking, Not Wooing, Customers

This peril of CRM basically talks about the choices that we make in an organization while selecting their customers. They often end up trying to build relationships with the wrong customers, or trying to build relationships with the right customers the wrong way. This results in disastrous consequences. So in order to succeed in implementing any CRM Systems in an organization it is very crucial to understand the nature of the customers the company has to deal with.

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