What is a CRM?

Customer Relationship Management (CRM) is a software/ tool that helps a business to manage its relationship with its customers, clients, and vendors. In other words, CRM software assists businesses in improvising their relations with their customers throughout the buying process. It is an end-to-end solution comprising service cloud, commerce cloud, marketing cloud, AI-based Customer Data Platform (CDP), and sales cloud.

Importance of CRM

As customers have various products or services to choose from, it becomes challenging for businesses to position themselves in the market. As a result, customers make their purchase decisions based on their experience with the business. Hence, it becomes necessary for a company to offer an excellent customer experience (CX). For that, businesses require complete knowledge of customer data.

CRM systems collect necessary data from several sources such as email, websites, marketing campaigns, advertising campaigns, and physical stores. All these data are placed together to develop CRM solutions and enhance the customer experience.

Role of CRM

Customer relationship management software has become a necessity, especially after the development of e-commerce businesses and the growth of the internet. However, CRM plays a vital role in the daily customer relationship management of several companies.

Organizations use CRM software to find solutions to unknown problems related to sales, marketing, and support departments. Listed below are the applications of CRM in different types of businesses.

Role of CRM in the hotel business

Businesses need to develop strategies to position themselves in the market amongst their competitors in the hotel sector. They need to create a brand to attract customers and retain them. It creates a need for flexible software that can respond to the guests' needs and adapt to the changing industrial conditions.

CRM solutions for hotels consider customers as an integral part of the business. They assist in attracting new customers and promote loyalty and satisfaction. CRM is equally beneficial to business owners for the following reasons.

• Market and integrate processes of hotel services
• Plan and organize target campaigns
• Attract and retain customers
• Transparent reports
• Deduct costs of marketing and sales
• Record all contacts with guests in any area
• Keep records of the customer
• Analyze competition and enter new markets

Generally, hotels use CRM to record customer data for the purpose of creating marketing or advertising campaigns to boost the business. It is used to respond to customer inquiries, track bookings, view customer history, communicate with guests, and provide offers to customers.

Role of a CRM in the banking sector

The banking sector is highly competitive, so banks find it difficult to distinguish themselves from their competitors. One primary reason behind this struggle is that banking services are similar across all banks. Likewise, customers select a bank based on their convenience. For instance, customers choose a bank that is close to their office or home. To deal with this high competition, banks have to maintain their relations with the customers and offer them excellent service.

CRM software for banks offers multi-channel communication with the customers. This helps the bank to establish its name and collect user data efficiently. The bank also gets an idea of handling each client, the product design, and sales. As a result, its revenue increases by using customized sales and customer support interactions. This way, banks can gain new customers and create new products for them.

CRM solutions enhance customer service, give satisfaction, solve issues faced by customers, and help to offer high-quality banking services. If a CRM is successfully implemented, banks can collect important customer information and use it to create effective marketing campaigns. However, banks will have to determine the type of customer information they want and how to handle or interpret the data to achieve good results.

Role of a CRM in the insurance industry

The insurance sector has a special relationship with its customers. The CRM solutions of this sector offer several benefits to the company, such as identifying the product price. This way, the company can know how to determine the insurance cost, what questions should be asked, the impact of changes in the price, and so on.

After identifying the basics, the company can proceed to find other answers such as,

• The level of reserve needed for liquidity and to cover losses
• How to reduce frauds
• Identifying services and controlling costs to improvise customer satisfaction
• Risks in the case of disasters
• Analyze the agent's sales based on the productivity

In the insurance sector, customers are placed at the central part of the business. The organization should also utilize the existing customer data to ensure customer satisfaction and improve client and customer relationships.

Role of a CRM in education

Customer relationship management solutions are required in the education sector to make fast, dynamic, and affordable solutions that make it easy for universities to handle daily activities. The CRM gives a proper understanding of the students and activities carried out in the university. It also lets students communicate with the university.

In a custom CRM for a university, students get information about enrollment, registration, financial help, accommodation, and so on. They are considered as the customers, and the goal is to provide top-quality services to students.

With CRM solutions, universities can manage their students effectively. CRM also collects the management records such as student attendance, course curriculum, extracurricular activity records, and so on. It also maintains data privacy by automating processes. By analyzing the CRM information, solutions to problems can be found.

A CRM increases productivity, allows communication between students and alumni, and reduces administrative tasks in the education industry. Eventually, it helps the institute to establish itself as a brand in the educational sector.

Other application areas of CRM

Since CRM is a helpful software for businesses and customers, it is widely used in most industries apart from the ones listed above. Some of these include:

• Healthcare
• Agriculture
• E-commerce
• Legal industry
• Fitness industry
• Marketing
• Telecommunication
• Travel and tourism
• Real estate
• Call center

Context and Applications

Applications of CRM software is an important topic in:

• Bachelor of Science in Information Technology
• Bachelor of Computer Application
• Master of Science in Information Technology
• Master of Business Administration

Practice Problems

1. What does a CRM emphasize in the long run?

1. Business-to-business relations
2. Customer value
3. Cross-sell
4. Sales pipeline

Ans: Option b

Explanation: One of the objectives to develop or use CRM software is to provide customer value and support. This helps large and small businesses to retain loyal customers.

2. During which phase does a successful CRM system enhance the production and profit?

1. Entire customer lifecycle
2. Social media
3. Sales support
4. None of the above

Ans: Option a

Explanation: Large and small businesses use CRM systems to give better user experience and customer service to their customers. Using a CRM system throughout the entire customer lifecycle, a company can help the customers to make their purchase decisions better; and this, in turn, will be beneficial to the organization.

3. What is the purpose of customer relationship management?

1. Attracting the right customer
2. Implementing the best processes
3. Motivating the employees including the sales team
4. All of the above

Ans: Option d

Explanation: An effective and successful CRM software considers all the points and processes that improve the business relationships with the customers or clients. It also keeps the employees and sales team motivated toward their work.

4. What are the benefits of a customer relationship management tool?

1. Creating marketing campaigns
2. Generating new pricing models
3. Handling transactions quickly
4. All of the above

Ans: Option d

Explanation: Using CRM software, organizations can collect and evaluate customer data. Based on the evaluation results, they can handle marketing campaigns, set prices of their products and services, and manage transactions. It also helps in maintaining good customer relationships.

5. Which of the following is an example of customer relationship management?

1. Software-as-a-service
2. Zoho mail
3. Low-code collaborative CRM system
4. customer-facing app

Ans: Option b

Explanation: Zoho CRM is an e-mail marketing software (CRM). It is an all-in-one software used to manage e-mail marketing services like sending e-mails, receiving e-mails, creating marketing campaigns, etc., in large and small businesses. The tool works on the drag-and-drop model and is very simple to use.

Common Mistakes

Students should not misinterpret the types of CRM applications - Operational CRM, Analytical CRM, and Collaborative CRM with CRM applications in businesses.

Related Concepts

• Types of CRM applications
• Types of CRM tools
• Applications of E-CRM
• CRM strategy