CRM Technology: Overview, Platforms, and Best Practices

Introduction to CRM Technology

Customer relationship management (CRM) is a technology-driven practice that works to integrate customer information in an attempt to improve service quality and influence behavioral outcomes such as customer loyalty and repeat sales, as well as increased customer satisfaction in general. CRM technologies can be implemented in virtually any industry and with virtually any size of business — now including small businesses. CRM software modules can also be integrated with other business processes to provide a more complete and accurate customer profile that can be used for an array of different purposes. Similar to many other uses of technology in business, the effectiveness of CRM solutions can vary significantly depending on a range of factors. This analysis introduces CRM technologies in general, provides information about some of the main technology providers, and discusses some of the best practices associated with their use in the modern business environment.

CRM Overview and Strategic Value

CRM can be defined as the process of achieving and maintaining a heightened relationship with a range of different customers through different touch points and the intelligent use of data (Bohling, Bowman, LaValle, & Vikas, 2006). It can be used as an alternative to a marketing program as well as a supplement to marketing efforts, and is based on using customer data to maximize the value of the relationship between the firm and its customers. The relationship that is established can add value to both business and consumer interests if used appropriately.

Some researchers have noted that there seems to be a general consensus on the importance of CRM as a strategic tool to remain competitive in the modern business world (Bohling, Bowman, LaValle, & Vikas, 2006). Many consumers now expect new levels of convenience and efficiency with any of their service requests, and even expect that many of these processes are fully automated so that a customer can self-serve on tasks that previously would have required a service representative to complete (Parida & Baksi, 2013). For example, in the banking industry, it is virtually impossible to be competitive without offering many automated CRM operations online or on a mobile app. Conventional service quality concepts have also evolved, with operational efficiency, security, confidentiality of stored information, reliability, accuracy and speed of transactions, virtual interfaces, and IVR all being considered major quality dimensions (Parida & Baksi, 2013).

However, despite all the advantages, potential problems can also emerge. CRM implementations can act to depersonalize the sales process (Darajeh & Shraz, 2010). This creates the potential for marketing efforts to lose information that would otherwise surface through interpersonal communication in a more traditional sales process. For example, with a single dedicated point of contact, relationships can build over years and sensitive contextual information can be gathered through those relationships. In some instances with a CRM system, although more customer data is available, it can be difficult to put that data in context and make it valuable to the company or the consumer. The sales team may have access to more information stored in a database, yet miss out on the nuances that develop through strong interpersonal relationships with a dedicated sales representative.

Within a CRM system, customers have access to an entire sales team rather than being dependent on a single salesperson, which can have a range of positive and negative effects depending on the industry and the characteristics of the application. CRM data can be available to the extended organization — including members from marketing and sales, product engineering, and customer service. Data sharing among these groups would not have been possible without the support of a CRM system to organize and distribute client information, allowing any member of the organization to access it and create value.

CRM Platforms and Market Leaders

There are many options for integrating a CRM platform into business operations in today's market. The CRM software industry is growing rapidly — at an estimated rate of over thirteen percent — and the ten largest CRM vendors combined generated 60% of worldwide revenues in 2014, totaling $14 billion (Columbus, 2015). Salesforce dominates the worldwide CRM market with an 18.6% market share and 28.2% revenue growth from 2013 to 2014. SAP holds the second-largest market share at 12.1%, attaining 7.2% growth, while Oracle has a 9.2% market share and 2.6% growth (Columbus, 2015).

Each of these providers focuses on different market niches within the industry. For example, Salesforce can be used as a standalone system that can be scaled down to suit many small business needs. Companies like Oracle and SAP offer CRM modules that can be integrated into a broader enterprise resource planning (ERP) system, which is popular among many larger businesses today. A CRM system can be hosted internally on company servers or hosted on the web via a cloud service.

Conclusion

CRM technology has matured considerably from its early, often unsuccessful implementations into a robust strategic tool capable of enhancing customer experience across multiple channels. From large enterprise solutions integrated with ERP systems to scalable cloud-based platforms suited for small businesses, the range of available options continues to expand. When implemented thoughtfully and supported by sound data practices, CRM systems offer organizations a powerful means of building customer loyalty, personalizing the customer experience, and remaining competitive in an increasingly data-driven business environment.

Works Cited

Bohling, T., Bowman, D., LaValle, S., & Vikas, M. (2006). CRM implementation: Effectiveness issues and insights. Journal of Service Research, 184–194.

Columbus, L. (2015, May 22). Gartner CRM market share update: 47% of all CRM systems are SaaS-based, Salesforce accelerates lead. Forbes. Retrieved from http://www.forbes.com/sites/louiscolumbus/2015/05/22/gartner-crm-market-share-update-47-of-all-crm-systems-are-saas-based-salesforce-accelerates-lead/

CRM Trends. (n.d.). Customer relationship management. Retrieved from http://www.crmtrends.com/crm.html

Darajeh, D., & Shraz, I. (2010). Benefits of e-CRM for financial services providers. Financial Theory and Engineering, 95–98.

Parida, B., & Baksi, A. (2013). CRM performance: Indexing approach. SCMS Journal of Indian Management, 56–77.