What is CRM?
The full form of CRM is Customer Relationship Management. CRM is a tool that companies use for developing, retaining and acquiring customer related information. The enterprise uses a combination of practices, strategies, and technologies to manage or analyze customer interactions and data throughout the customer lifecycle.
Improving business relationships is CRM's goal. It enhances both customer and business ties. CRM is a system that helps businesses to stay connected, streamlines procedures and increases profitability. It keeps track of consumer contact information, customer interactions, manages customer accounts, and improves customer service. It aids companies in increasing Customer Lifetime Value (CLV).
CRM software helps businesses through increase in sales growth, assisting businesses in making choices, enhancing product quality and delivering better customer service. CRM systems collect client data from various channels that exists between the customer and the company. It gets the needed data from diverse sources including company websites, social networking areas, telephones, marketing emails, live chat, live videos, direct mail, and so on.
Types of CRM
CRM software includes a large category of tools. Different types of CRM products vary in terms of their functions and features. They can be divided into three main categories:
- Collaborative CRM
- Operational CRM
- Analytical CRM
Collaborative CRM is also known as strategies CRM. The main goal of this CRM is to improve the overall customer experience. An organization shares customer data with various departments using collaborative CRM. These departments involved are the sales and marketing team, product team, technical support team and other stakeholders.
Let's take an example to understand the concepts. Every company has a support team that takes feedback from customers about their services. After receiving feedback from the customers, they give the feedback to the marketing team. Using these feedback, the marketing team approaches the targeted customer with specific products or services.
In the current scenario, every business unit works as an independent group and in most cases, they don't want to share customer data with any other business group due to business losses. The collaborative CRM works to unite all businesses groups into a single group and to improve customer service by using all the customer's data and information to gain loyalty and to attract new customers in order to increase sales. The two main components of marketing CRM are as follows:
Interactive management helps in managing the interactions between the organization and its customers. The customers communicate with specific channels and interaction management handles all of those communications.
Channel management helps in reaching out customers more efficiently and effectively using their preferred interaction channels such as social media, email, phone, or even face-to-face interaction.
So, the fundamentals of customer relationship management are necessary to understand the work of CRM properties.
Application of collaborative CRM - Pipedrive
Pipedrive recognizes the link between teamwork and sales performance. Pipedrive allows customers to delegate work, track lead flow from a simple dashboard, and allocate tasks to team members based on their strengths and skill sets, in addition to sharing data.
The operational CRM system is used to make the company's day to day processes easier. It works to handle the company's processes related to customer relationships and provides tools and software to handle customer journeys. The CRM systems also include a high number of touchpoints to handle customer questionnaires that start with the viewing of the company's website, go through the whole lead management process as they move through the sales pipeline, and continue with their behavior till they become a customer. The main goals of customer relationship management are to generate leads, convert leads into contacts, capture all the required information and provide service throughout the customer lifecycle.
Application of operational CRM - Salesforce and Insightly
Salesforce CRM delivers useful capabilities for sales, marketing, community management, and customer service, among other areas of business. It is also one of the top-rated CRM software alternatives for small businesses. Salesforce is a simple CRM solution to use but it has far more functionality.
Small and midsize businesses will benefit from Insightly CRM, a cloud-based system. Dashboards in Insightly CRM may be customized using drag-and-drop action to produce visually appealing reports. Its Zapier interface allows to link more than 1,500 apps for quick data sharing and aggregation. The monthly fee for each user starts at $29 per month.
The operational CRM provides three main features-
- Sales automation
- Marketing automation
- Service automation
The goal of sales automation is to acquire new customers and deal with existing ones. It generates more ways for businesses to meet customer needs and requirements so that they can improve sales more efficiently and effectively. It includes contact management, sales management, lead management, and quote-to-order management.
The main goal of marketing automation is to find the best way to provide services to potential customers. Campaign management is the main module of this automation. It helps businesses and organisations decide the best channel (like emails, phone calls, face to face meetings, video conferences, or virtual meetings ) to interact with customers.
Service automation is used to provide the best quality of service and to build strong relationships between company and customer. It enables the business to retain the customer by giving them the best facilities. This automation service solves customer issues and fixes them. The customer call management service handles incoming or outgoing calls for the customer. The service label management system provides a means to monitor the quality of service based on key performance indicators.
Analytical CRM is the third type of Customer Relationship Management. It helps in determining the better way to serve customers. The main function of this CRM is data analysis. It analyses customer data that come from various sources to derive useful insights. Analytical CRM can be used -
- To collect information that comes from various channels and analyze them in a structured way.
- To set business strategies in sales and marketing and to improve customer relationship
- To improve CRM system's effectiveness and to evaluate key performance indicators set by the business.
Application of analytical CRM - HubSpot and ZOHO
The dashboard reporting and analytics tools in HubSpot CRM helps in tracking the performance of the whole sales funnel. In order to perform more sophisticated analytics, HubSpot CRM can be used with Marketing Hub, Sales Hub, or Service Hub, all of which have their own reporting and analytics tools.
Using powerful real-time analytics, Zoho CRM helps teams to make smarter, data-driven decisions. Dashboards and reports can be customized with widgets such as goal metres, funnels, and charts.
Generally, students are confused as they fail to understand the fundamentals of CRM. The major difference is that operational CRM is focused on customer-facing processes, customer comments, and reviews, while analytical CRM is more compatible with developing the organization's systems through customer awareness. Collaborative CRM creates communication between different organizations and enterprises related to the customer. It can include various company divisions, such as marketing, sales, technical support, external customers, and customer service.
Concepts and Applications
This topic is significant in the professional exams for both graduate and postgraduate courses, especially for:
- Bachelor of Technology in Computer science
- Bachelor of Technology in Information Technology
- Master of Business Administration in Customer Relationship Management
- Customer relationship.
- Strategic management.
- Virtual marketing.
- Business environments and ethics.
Q1. The part of the collaborative CRM is:
- Sales automation
- Channel management
- Service management
- Product management
Correct answer- Channel management
Explanation- There are two parts of collaborative CRM namely interactive management and channel management.
Q2. What are the types of operational CRM software-
- Sales, service, and marketing automation
- Channel and service automation
- Service management
Correct answer: sales, service, and marketing automation
Explanation- There are 3 types of operational CRM. That is sales, service, and marketing.
Q3. What are the features of CRM systems?
- CRM systems manage the relationship between the customer and the organization.
- CRM systems are used to improve customer service.
- CRM systems help the organization to take decisions related to customer service.
- All of the above
Correct answer: All of the above.
Explanation- CRM is a tool that companies use for developing, retaining, and acquiring customers' information. The enterprise uses a combination of practices, strategies, and technologies to manage or analyze customer interactions and data throughout the customer lifecycle.
Q4. Customer Relationship technology helps in:
- Processing transaction faster
- Developing new pricing models
- Designing direct marketing effect
- All of the above
Correct Answer: All of the above
Explanation- Customer Relationship technology helps in processing transaction faster, developing new pricing models, designing direct marketing effect.
Q5. Company's customer relationship capital is known as:
- Customer conversation
- Dissatisfied customers
- Satisfied customers
- Customer retention
Correct Answer: Satisfied customers
Explanation- The strategies a firm takes to engage with its customers and improve the customer experience are referred to as customer relations.
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