What Is Customer Relationship Management?

Date First Published: 13th December 2023

Topic: Computer Systems

Subtopic: Computer Software

Article Type: Computer Terms & Definitions

Difficulty: Medium

Difficulty Level: 6/10

CONTENTS

Benefits Of CRM
Challenges Of CRM

Learn about what customer relationship management is in this article.

Customer Relationship Management (CRM) refers to strategies and technologies that businesses use to analyse and manage relationships with customers and customer interactions. Technological advances have led to less personal, but more detailed relationships with customers as information processing capabilities have led to large amounts of data being gathered about customers, which can be used to identify their purchasing habits, buying preferences, and concerns.

CRM systems use customer data across different channels and points of contact between the customer and the business, including email, social networks, telephone, marketing materials, and the business's website. When it comes to CRM, customer service is usually the most important priority.

Benefits Of CRM

The benefits of CRM are:

Improved customer service. The collection of customer data, such as past purchases and interaction history helps customer support representatives provide better and faster customer service. This can improve customer relationships, improve customer retention, and result in sales growth. Customers enjoy better service and are more likely to report higher satisfaction. Customer interactions, such as questions and complaints are stored and can easily be recalled so that customers do not need to constantly repeat themselves.
Automation. CRM allows businesses to automate email campaigns, business processes, sales, and customer support tasks. For example, automated contact centre tools, like chatbots can improve customer user experience and assist in customer problem-solving without the need for manual interaction by a customer support representative each time.
Trend spotting. The collection of customer data allows businesses to identify trends and insights about their customers using reporting and visualisation features. It also allows sales forecasts to be created, helping businesses forecast future demand and sales.

Challenges Of CRM

Customer data requires proper maintenance to easily find information. There can be difficulties achieving a single view of the customer if the data sets are not organised and connected in a single dashboard or interface. When systems contain duplicate customer data or outdated information, it is much harder to track the customer journey. These problems can harm customer experience due to issues, such as a long wait time during phone calls and improper handling of technical support.