Marketing Strategy

Customer Relationship Management – CRM

written by Tim Berry of Palo Alto Software


This article was taken from CRM Assist

What is CRM?
Customer Relationship Management is an information industry term for methodologies, software, and, usually, Internet capabilities that help an enterprise manage customer relationships in an organized way. For example, an enterprise might build a database about its customers that described relationships in sufficient detail. Therefore, management, salespeople, people providing services, and perhaps the customers could directly access information, match customer needs with product plans and offerings, remind customers of service requirements, and know what other products a customer had purchased. According to one industry view, CRM consists of:

  • Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns with clear goals and objectives, and generate quality leads for the sales team.
  • Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices).
  • Allowing the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service.
  • Providing employees with the information and processes necessary to know their customers, understand their needs, and effectively build relationships between the company, its customer base, and distribution partners.

Brief history of CRM
With the advent of e-commerce comes the e-customer. According to Vantive, a customer relationship management solutions provider, the e-customer expects constant access to a company; through e- mails, call centers, faxes and websites. They demand immediate response and a personalized touch. Meeting their needs places new demands on the enterprise. Since traditional enterprise resource planning applications did not include a customer management aspect, CRM was the logical next step. Vantive, for example, has been developing and implementing customer-facing applications since 1992.

Two trends have brought CRM to the forefront, explains Boston University professor Tom Davenport, who directs Andersen Consulting’s Institute for Strategic Change. First, as global competition has increased and products have become harder to differentiate, “companies have begun moving from a product-centric view of the world to a customer-centric one,” says Davenport.

Second, technology has ripened to the point where it is possible to put customer information from all over the enterprise into a single system. “Until recently, we didn’t have the ability to manage the complex information about customers, because information was stored in 20 different systems,” says Davenport. But as network and Internet technology has matured, CRM software has found its place in the world.

Why is it necessary?
Many companies are turning to customer-relationship management systems to better understand customer wants and needs. CRM applications, often used in combination with data warehousing, E-commerce applications, and call centers, allow companies to gather and access information about customers’ buying histories, preferences, complaints, and other data so they can better anticipate what customers will want. The goal is to instill greater customer loyalty.

Other benefits include:

  • Provide faster response to customer inquiries.
  • Increasing efficiency through automation.
  • Having a deeper knowledge of customers.
  • Getting more marketing or cross-selling opportunities.
  • Identifying the most profitable customers.
  • Receiving customer feedback that leads to new and improved products or services.
  • Doing more one-to-one marketing.
  • Obtaining information that can be shared with the company’s business partners.

Market leaders
The top vendors of CRM software include Siebel, Vantive, and Clarify along with ERP vendors Baan Co. and Oracle Corp. These top five vendors contributed 40 percent of overall CRM revenue, with the market leaders growing a hardy 90 percent combined in 1998.

In the growing segment of CRM professional services, market leaders include Andersen Consulting, Cambridge Technology Partners, CSC, Deloitte Consulting, EDS/Centrobe, eLoyalty, Ernst & Young, IBM Global Services, KPMG, and PriceWaterhouseCoopers.

The future of CRM
AMR Research expects the CRM market to change dramatically, reaching $16.8 billion by the year 2003. The CRM segment is expected to witness 60% revenue growth this year, with compound annual growth of 49% by 2003. Companies are developing business plans with CRM strategies as the driving element, as customer service is a top priority.

Tim Berry

about the author

Tim Berry

Founder and President of Palo Alto Software and a renowned planning expert. He is listed in the index of "Fire in the Valley", by Swaine and Freiberger, the history of the personal computer industry. Tim contributes regularly to the bplans blog, the as well as his own blog, Planning, Startups, Stories. His full biography is available at Follow Tim onGoogle +


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