CRM definition - customer relationship management

CRM definition: Customer Relationship Management integrates all business processes, communication channels and company departments that have direct contact with customers. This primarily includes the marketing, sales and service departments. Customer contact has thehighest priority throughout the entire duration of the cooperation with the customer.

However, the CRM definitions of individual companies always differ slightly from one another, depending on the respective corporate concept: because CRM is not an isolated instrument and must be incorporated into the processes as part of the company's philosophy, the respective structure of the company also determines its own CRM definition.

In times before digitalization, the focus was on a company's products and services, and buyers were sought and found through advertising.

This has changed. Today, companies focus on their customers and their product requirements, provide an appropriate offer including good advice and ensure that customers can trust their company in order to retain them in the long term.

Part of the CRM definition: CRM objectives

The following 7 objectives are the most important:

Lasting customer relationships:
The goal of a customer relationship is long-term customer loyalty to the company. This primarily serves to increase profits, secure market share and thus the growth of the company, e.g. by customers recommending the company to colleagues, friends and acquaintances through their satisfaction and making repeat or follow-up purchases.
Individual customer relationship:
Differentiating customer relationships in terms of products or services, which are recommended in individual consultations, promotes customer loyalty to the company.
Customer orientation:
A targeted orientation of all company activities towards the needs and wishes of potential and existing customers in the sense of comprehensive processing is elementary.
Focus on profitability:
The focus should always be on those customers who are particularly profitable for the company. However, this does not mean that less profitable customers should be treated less favorably.
Systematization:
Systematic customer processing, which is geared towards the customer's needs and extends across the customer relationship cycle, is of great importance.
Increasing efficiency:
By simplifying administrative work, optimizing processes, integrating and analyzing data, a company can increase its efficiency according to the CRM definition.
Optimized processesthrough CRM software:
The more customers a company has, the more difficult it becomes to know the individual needs of each customer. This also makes it more difficult to make them individual offers and provide them with needs-based support. The acquisition ofCRM software helps to optimize the customer relationship according to the CRM definition. Customer data can be called up in the software at any time via integrated databases. This means that processing procedures or customer meetings can be customized. In addition, resources are used more efficiently and wastage is avoided.

CRM definition: the four forms of CRM

Within the CRM definition, four forms of CRM can be distinguished:

Analytical CRM:
evaluates the data from the operating business. This evaluation takes place on the basis of KPIs (Key Performance Indicators) in order to analyze and interpret the requirements of the products. Analytical CRM also includes the components collection, system integration, data warehouse and evaluation routines such as data mining or OLAP.

Collaborative CRM:
This form of customer relationship management deals with collaboration, as the name suggests. This takes place both within the company and with external partners. This means that collaborative CRM is used throughout the entire CRM process.

Operative CRM:
This uses the supporting function of the customer relationship management system for the specialist departments to initiate contact and maintain the customer relationship. At the same time, according to the CRM definition, customer-relevant data is continuously obtained and collected in operational CRM so that it can be processed in analytical CRM.

Communicative CRM:
controls all communication channels. The focus on the customer is a top priority here. In the CRM definition, communicative CRM is often seen as part of the operational orientation, as contact initiation also comes into play here.

Strategies - also part of the CRM definition

With the CRM strategy, the company management and the internal CRM team develop the guidelines and objectives based on customer and market requirements.

The strategic objectives must then be translated into concrete, operational measures and CRM processes, e.g:

Facilitate access to customer information and make data more quickly accessible
Departments such as service and sales should be able to share information with each other
Enable control of interactions between customers and employees
Faster responses to customer inquiries

Improve master data quality
Simplify and improve in-house organization
Optimize sales planning and control
Faster visit preparation and effective visit planning
Set up a complete, clear reporting system

New CRM definition: Empathic CRM

In addition to the four familiar forms of CRM, a new form of CRM definition has emerged in the last two years: Empathic CRM. As a person-centered approach to unrestricted customer management, it is playing an increasingly important role. Individual decision-making and action motives are the basis for the development of new or existing customers. The aim of empathic CRM is to take into account all touchpoints between the company and the customer (customer journey) as well as all relevant information about the customer and make it usable for the development of a sustainable customer relationship.

Additions to the CRM definition

Retention marketing

Retention marketing is a strategic marketing approach with the aim of increasing customer loyalty. For this purpose, important customer groups are segmented in the company in order to bind them to the company in the long term with targeted measures (example: payback cards).

To this end, data from the CRM software and systematic market research is collated and evaluated as the basis for database marketing. Subsequent activities are designed to increase customer value, extend the customer life cycle and thus increase revenue per customer for the company.

Social CRM is a relatively new trend that extends operational CRM. The main focus is on potential and existing customers, who are more strategically involved in a collaborative dialog via the Internet and social media platforms (such as Facebook, WhatsApp, Twitter or Instagram). The aim is to find out what customers want, but also to disseminate quick responses and reactions to customer satisfaction.

Mobile CRM

Mobile CRM enables the sales force to access customer data from anywhere. To this end, modern technologies are used that enable work via the browser (CRM in the cloud) or in a native CRM app.allow. As the availability of mobile data cannot yet be guaranteed across the board, mobile CRM is viewed critically in some companies. However, there are already CRM apps that are offline-capable.

Elementary for CRM

The right system, CRM analysis and the use of the insights gained

CRM systems are tools for optimizing customer relationship management. They improve this according to one of the CRM definitions mentioned above by recording customer data and processes that are relevant to the company's success.

The CRM software supports all areas of the company that are in contact with customers. CRM is used particularly frequently in sales, but also in marketing or for service & IT. To decide which program best suits your company, get a CRM software function overview in advance.

The introduction of a CRM system offers great potential for intensifying existing or developing business relationships. However, the prerequisite for this is, on the one hand, the analysis of buying and decision-making motives and, on the other hand, the use of these findings in customer care and acquisition for individual communication through adapted strategies, processes and technical solutions on the part of the company.

Data is collected and analyzed on an ongoing basis and produces data for the evaluation and consideration of future developments. This data and the associated decisions in turn form the basis for further analyses and new decisions.

CRM analysis covers the following areas:

Customer segmentation(for example, subdividing customers according to purchase probability)
Profitability analysis(which customers have the greatest potential?)
Personalization(targeted approach to customers based on existing data)
Purchase probability(analysis to place targeted offers based on purchases made (cross-selling and up-selling))
Prediction models(analysis of customer questions and complaints to identify products that promise success)

Is your current CRM system not sufficient or do you not yet have a CRM at all?

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15 steps to CRM