In today's competitive business environment, a successful CRM strategy cannot be implemented by only installing and integrating a software package designed to support CRM processes. A holistic approach to CRM is vital for an effective and efficient CRM policy. This approach includes training of employees, a modification of business processes based on customers' needs and an adoption of relevant IT-systems (including soft- and maybe hardware) and/or usage of IT-Services that enable the organization or company to follow its CRM strategy. CRM-Services can even replace the acquisition of additional hardware or CRM software-licences.

The term CRM is used to describe either the software or the whole business strategy (or lack of one) oriented on customer needs. The main misconception of CRM is that it is only software, instead of whole business strategy.

Major areas of CRM focus on service automated processes, personal information gathering and processing, and self-service. It attempts to integrate and automate the various customer serving processes within a company.

Architecture of CRM

There are three parts of application architecture of CRM:

1. operational - automation to the basic business processes (marketing, sales, service)

2. analytical - support to analyze customer behavior, implements business intelligence alike technology

3. co-operational - ensures the contact with customers (phone, email, fax, web, sms, post, in person)

Operational CRM

Operational CRM means supporting the so-called "front office" business processes, which include customer contact (sales, marketing and service). Tasks resulting from these processes are forwarded to employees responsible for them, as well as the information necessary for carrying out the tasks and interfaces to back-end applications are being provided and activities with customers are being documented for further reference.

Operational CRM provides the following benefits:

• Delivers personalized and efficient marketing, sales, and service through multi-channel collaboration

• Enables a 360-degree view of your customer while you are interacting with them

• Sales people and service engineers can access complete history of all customer interaction with your company, regardless of the touch point

According to Gartner Group, the operational part of CRM typically involves three general areas of business:

• Sales force automation (SFA): SFA automates some of the company's critical sales and sales force management functions, for example, lead/account management, contact management, quote management, forecasting, sales administration, keeping track of customer preferences, buying habits, and demographics, as well as sales staff performance. SFA tools are designed to improve field sales productivity. Key infrastructure requirements of SFA are mobile synchronization and integrated product configuration.

• Customer service and support (CSS): CSS automates some service requests, complaints, product returns, and information requests. Traditional internal help desk and traditional inbound call-center support for customer inquiries are now evolved into the "customer interaction center" (CIC), using multiple channels (Web, phone/fax, face-to-face, kiosk, etc). Key infrastructure requirements of CSS include computer telephony integration (CTI) which provides high volume processing capability, and reliability.

• Enterprise marketing automation (EMA): EMA provides information about the business environment, including competitors, industry trends, and macroenviromental variables. It is the execution side of campaign and lead management. The intent of EMA applications is to improve marketing campaign efficiencies. Functions include demographic analysis, variable segmentation, and predictive modeling occur on the analytical (Business Intelligence) side.

Integrated CRM software is often also known as "front office solutions." This is because they deal directly with the customer.

Many call centers use CRM software to store all of their customer's details. When a customer calls, the system can be used to retrieve and store information relevant to the customer. By serving the customer quickly and efficiently, and also keeping all information on a customer in one place, a company aims to make cost savings, and also encourage new customers.

CRM solutions can also be used to allow customers to perform their own service via a variety of communication channels. For example, you might be able to check your bank balance via your WAP phone without ever having to talk to a person, saving money for the company, and saving you time.

Analytical CRM

In analytical CRM, data gathered within operational CRM are analyzed to segment customers or to identify cross- and up-selling potential. Data collection and analysis is viewed as a continuing and iterative process. Ideally, business decisions are refined over time, based on feedback from earlier analysis and decisions. Business Intelligence offers some more functionality as separate application software.

Collaborative CRM

Collaborative CRM facilitates interactions with customers through all channels (personal, letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and channels. It is a solution that brings people, processes and data together so companies can better serve and retain their customers. The data/activities can be structured, unstructured,conversational, and/or transactional in nature.

Collaborative CRM provides the following benefits:

• Enables efficient productive customer interactions across all communications channels

• Enables web collaboration to reduce customer service costs

• Integrates call centers enabling multi-channel personal customer interaction

• Integrates view of the customer while interaction at the transaction level

• Improving customer service

CRMs are to improve customer service. Proponents say they can improve customer service by facilitating communication in several ways:

• Provide product information, product use information, and technical assistance on web sites that are accessible 24 hours a day, 7 days a week.

• Help to identify potential problems quickly, before they occur.

• Provide a user-friendly mechanism for registering customer complaints (complaints that are not registered with the company cannot be resolved, and are a major source of customer dissatisfaction).

• Provide a fast mechanism for handling problems and complaints (complaints that are resolved quickly can increase customer satisfaction).

• Provide a fast mechanism for correcting service deficiencies (correct the problem before other customers experience the same dissatisfaction).

• Identify how each individual customer defines quality, and then design a service strategy for each customer based on these individual requirements and expectations.

• Use internet cookies to track customer interests and personalize product offerings accordingly.

• Use the Internet to engage in collaborative customization or real-time customization

• Provide a fast mechanism for managing and scheduling followup sales calls to assess post-purchase cognitive dissonance, repurchase probabilities, repurchase times, and repurchase frequencies.

• Provide a fast mechanism for managing and scheduling maintenance, repair, and on-going support (improve efficiency and effectiveness).

• Provide a mechanism to track all points of contact between a customer and the company, and do it in an integrated way so that all sources and types of contact are included, and all users of the system see the same view of the customer (reduces confusion).

• The CRM can be integrated into other cross-functional systems and thereby provide accounting and production information to customers when they want it.

Improving customer relationships

CRMs are also claimed to be able to improve customer relationships . Proponents say this is so because:

• CRM technology can track customer interests, needs, and buying habits as they progress through their life cycles, and tailor the marketing effort accordingly. This way customers get exactly what they want as they change.

• The technology can track customer product use as the product progresses through its life cycle, and tailor the service strategy accordingly. This way customers get what they need as the product ages.

• In industrial markets, the technology can be used to micro-segment the buying centre and help coordinate the conflicting and changing purchase criteria of its members.

• When any of the technology-driven improvements in customer service (mentioned above) contribute to long-term customer satisfaction, they can ensure repeat purchases, improve customer relationships, increase customer loyalty, decrease customer turnover, decrease marketing costs (associated with customer acquisition and customer “training”), increase sales revenue, and thereby increase profit margins.

Technical functionality

A CRM solution is characterised by the following functionality:

• scalability - the ability to be used on a large scale, and to be reliably expanded to whatever scale is necessary.

• multiple communication channels - the ability to interface with users via many different devices (phone, WAP, internet, etc)

• workflow - the ability to trigger a process in the backoffice system, e. g. Email Response, ...

• assignment - the ability to assign requests (Service Requests, Sales Opportunities) to a person or group.

• database - the centralised storage (in a data warehouse) of all information relevant to customer interaction

• customer privacy considerations, e.g. data encryption and the destruction of records to ensure that they are not stolen or abused

CRM in Business

In this day and age the use of internet sites and specifically e-mail, in particular, are touted as less expensive communication methods, compared to traditional methods like telephone calls. This revolutionary type of service can be very helpful, but it is completely useless if you are having trouble reaching your customers. It has been determined by some major companies that the majority of clients trust other means of communication, like telephone, more than they trust e-mail. Clients, however, are not the ones to blame because it is often the manner of connecting with consumers on a personal level making them feel as though they are cherished as customers. It is up to the companies to focus on reaching every customer and developing a relationship.

CRM software can run your entire business. From prospect and client contact tools to billing history and bulk email management. The CRM system allows you to maintain all customer records in one centralized location that is accessible to your entire organization through password administration. Front office systems are set up to collect data from the customers for processing into the data warehouse. The data warehouse is a back office system used to fulfill and support customer orders. All customer information is stored in the data warehouse. Back office CRM makes it possible for a company to follow sales, orders, and cancellations. Special regressions of this data can be very beneficial for the marketing division of a firm.