Customer Relations Management (CRM) is the value of the prospective and existing clients. In fact, new entrants in any industry present the existing companies with competition. The entrants weaken both the solid and the existing corporations in the market. This arises from the new ways of doing and advancing businesses. Among the factors that drive these changes are the emergence of advanced technologies and continuous changes (Maroofi, 2013).
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CRM has emerged as a product of these changes and has evolved in a drastic way that it is currently viewed as a strategy towards maintaining long-term relationships with the client. CRM is a business philosophy, tactic, a process and a technical tool. This study explores the successful factors in the implementation of CRM programs. In reviewing the success factors, it is imperative to understand the key components of CRM programs.
CRM acquired prominence in the 1990s as a marketing sub-discipline. It was driven by the publications of ‘the loyalty effect’ and ‘the one to one future’ (Roberts et al., 2005).
The pursuit of competitive advantage and profitability prompted a rush to employ CRM programs in the emerging, existing and prominent businesses in all corners of the world. More than two decades afterward, the issue of whether or not such businesses could generate profits from the ventures made on Customer Relations Management systems appeared as a subject of discussion.
In some studies, out of three businesses that made investments in Customer Relations Management schemes, two regard the tool as discontenting in the future’ (Roberts et al., 2005). IBM carried out a survey on the managerial reporting and concluded that eighty five out of hundred enterprises in the Asian, European and American countries athwart all industries hardly achieve the projected outcomes with CRM.
However, an industry-specific survey conducted by McKinsey presented a different perspective. The company investigated deeper into the CRM status in the insurance industry and emerged with positive results on CRM programs. A benchmarking study concluded that CRM is strategically important and is controlled by technological potentials.
The place of technology in the success or failure of CRM remains contested. Customer Relations Management ought to be information managed within the least dominant businesses where the dealing has real connection to the client. For CRM to be complete it must contain a variety of components. These components include people management, lead management, sales force automation, customer service, marketing, workflow automation, business reporting and analytics.
These components represent the foundation of all high quality activities with clients. The application of technology creates close interactions between the business and customers. Thus, any CRM program seeks to gather information from all relevant data sources within the organization. When appropriate the business may gather such information from outside. This enables the business to have a precise outlook of every customer in real time.
People Management regards effective utilization of human resources in the correct place at the correct time. This ensures that resources contribute towards the attainment of organizational and personal goals. It is important to espouse the correct parameters to ensure that the individual qualifications, abilities and skills fit well with the designated positions and job profiles.
The individuals will be willing to utilize their capabilities to enhance their competence and consequently the performance of the organization. For the success of CRM programs, people management is a prerequisite for very large companies as well as the small and medium-sized businesses.
Lead Management typically entails tracking and supply of sales leads. This is essential in marketing, call centre and sales industries. When a business makes a follow-up on its customers, the clients feel valued hence become open to do further transaction with the business. This is unlike when the businesses entirely forget about a customer once a successful sale is made. The job of this component entails the management of marketing promotions, creating tailored forms, and other activities.
Sales Force Automation is among the most fundamental components of CRM largely used by almost every business that seeks to acquire and maintain competitive advantage. The component involves a software solution designed to forecast, track the prospective transactions and process sales. In any business, it is essential to collect data that will help the organization in identifying the potential revenues.
Customer service component is an important component of the CRM. In fact, CRM is focused on the collection of client data, information regarding purchasing trends and availing information to the relevant business departments. The information is important as it helps the business to understand the customers.
The central departments including human resource, marketing and sales are presented with the opportunity to acquire familiarity from preferences and purchasing trends of the customers. With decisive knowledge, relevant departments are able to avail appropriate solutions to individual customers. This may include alerting the customer when a new product is introduced in the business via email or even phone call. This enhances customer satisfaction which leads to retention and loyalty.
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Marketing component in the context of CRM includes activities that involve promotions, which bring a product or service to the attention of the public or target group. It is imperative to note that marketing is different from both sales and advertising. Sales refer to the actual selling of commodities while advertising concerns the approach used to make such sales (Razvan, 2013). CRM assists the marketing function towards increasing the efficiency of marketing via the comprehension of the prospective target customers.
Work Flow Automation involves the reduction of costs and rationalization processes. The component primarily saves a number of people from executing similar role time after time. It cuts work and help the workers from performing avoidable tasks. The automation involves the reduction of paperwork. This is achieved by automating the system to perform tasks such as filling out of forms at the touch of a button.
However, employees often perceive this component as a threat as it significantly reduces workload. The component attracts resistance from workers who feel that their job security is threatened. With sufficient structures for the implementation of CRM programs such as assurance by the management that jobs are secure through regular communication, the employees are likely to embrace CRM implementation. They will have time to engage in other activities that are beneficial to their career.
Business reporting component is simply the ability to recognize the position of the business at any time. In this view, data collected through CRM program provides continuous information about public relation, marketing, product endorsement, and trade. It typically represents business activities and performance.
The component enables the management to access the information gathered instantly whenever it is needed. CRM technology ensures that accurate data is gathered regarding the customers. Consequently, the data is analyzed and any inaccuracies deleted.
The final data provides accurate information hence the reports produced are accurate. Forecasting as central part of CRM technology is another feature. The forecasted information can be exported together with past information and reports to other systems for comparison. The reports and historical information can be saved for the business to use in future when reviewing failures and success of the business.
Analytics entail the analysis of the gathered data to generate information that is easy to comprehend thus making it useful and relevant for studying market trends. With CRM technology, it is possible to observe market trends given the ability to generate diagrams, graphs and figures for both the historical and present data.
The most recent development relating to CRM components is the employment of web service that enable businesses to borrow diverse components from diverse industries and employ them collaboratively in a way that meets their business requirements.
Data-driven CRM demands huge databases and analytical systems. It must also possess the capacity to distribute information to the users as necessary. This approach may appear irrefutable but raises the issue of serious technical resolution in the triumph or collapse of Customer Relations Management programs. In fact, the historical proof may be present from either faces.
It is possible to mention nations where the implementation of this tool plainly became unsuccessful and resulted into the crash of the complete project. In other conditions, pointers equally blame organizational shortcomings as being behind the collapse of CRM implementation (Roberts et al., 2005). However, many studies have been conducted recently in an effort to unearth the observed evidence regarding the drivers of failure or success of CRM programs.
Organizational factors are as important as technical factors of CRM program implementation. It has been argued that the failure or success of CRM programs is mostly due to organizational and social factors (Lawson-Body, 2011).
These include organizational change and disruption, changes in business processes and the diverse perspectives regarding client information. CRM programs often present significant changes to a business. Employees often view these changes as threats to their job security. Hence, the resistance from many quarters faces the changes.
In fact, the resistance to changes creates hurdles to the overall CRM implementation. In this view, the success factors are diverse. Variables including top management support, communication with employees, advocating for change internally and establishing a change infrastructure play a central role in the success of the CRM programs. Other contributors to the success include the provision of effective end-user guidance, creating reward systems and re-configuring of business processes.
When the relevant business stakeholders support the initiative with sufficient information to the employees that their welfare is secured, the CRM initiative is likely to succeed. This calls for the human resource function, resource allocation and organizational structure to be in harmony with the central organizational goal. The extent of the CRM should be reflected in the size of the business, the capability of the information technology staff and the innovativeness of the top managers.
Individual factors are other components that influence the success or failure of CRM programs. Previous research has utilized subjectivity psychological theory and behavioral theory to explore the underpinning elucidation to the user conduct and the success in the implementation of CRM programs. When those expected to facilitate effective implementation of CRM programs possess sufficient usage capability, they indicate positive response to CRM technology.
The users of the CRM technology vary in terms of individual dispositions and acquired knowledge. The individual factors that impact on the success of CRM programs include resistance to change, individual’s innovativeness, willingness to learn and computer anxiety. In view of computer anxiety, the individuals who undergo fatalism or negative affectivity are likely to look at the implementation of CRM programs negatively.
Individual innovativeness regards the willingness of the individual to discover new methods, attempt new methods and willing to explore how new changes will advance their career by presenting new challenges. Such individuals positively contribute to the success of CRM programs since they are receptive to the implementation process and more flexible to change. Resistance to change regards the deficiency of engagement of the same individuals expected to use the technology after the implementation of the CRM program.
Other CRM success factors have been discussed including the stages of the business maturity for CRM program. These involve the maturity of the customers, processes, systems, people and motivation. These factors determine whether the implementation of the CRM program will be successful or not. Although they form a good basis for exploration of the subject, these factors are somewhat overshadowed by the key components of success factors of CRM program.
By availing information on client purchase history, profiles and data, the program support essential areas of the business’ core processes particularly in services, sales and marketing divisions. CRM programs not only put the needs of the customer first, but also concerned with the profitability of the business. It enables the business to keep the customers under control. This is achieved by ensuring that the clients feel that they are considered as an important element in the progress of the business.
For CRM program to be successful, it becomes imperative for the management of the company to outline particular trade returns and paybacks, which are projected to be distributed by the project. In most of the business that fail with CRM programs, the management assumes that it is obvious for the program to work. The solution that the CRM is expected to realize must be well defined. The business must prioritize the objectives the initiative is expected to deliver. The selection of the appropriate technology is also important.
Customer Relations Management is focused on the value of the current and prospective clients. CRM programs are essential for any type of business that seeks to create a competitive edge and maintain competitive advantage realized through retaining and attracting new customers. CRM approach is dynamic and is significantly impacted by technological changes. The evolution of technology means that business has to keep pace reaching to customers who constantly become technology-oriented in finding goods and essential services.
Business are hence obliged to use advanced and appropriate technology to reach the customers, observe their purchasing history and gather relevant information that will help in providing services that are needed by the customers. The CRM concept has evolved drastically to be viewed as a strategy to attracting and maintaining a long-term relationship with clients.
The failure or success of CRM programs depend on a variety of factors. When the management critically explores all the key components of CRM, the initiative is likely to succeed. These involve people management, lead management, sales force automation, customer service, marketing, workflow automation, business reporting and analytics. The business must also be clear regarding what the initiative is expected to achieve.
Lawson-Body, A 2011, “The critical success factors for public sector CRM implementation”, Journal of Computer Information Systems, vol. 1 no. 1, pp. 4-50.
Maroofi, F 2013, “Effective factors on CRM development”, Asian Journal of Business Management, vol. 5 no. 1, pp. 52-59.
Razvan, B 2013, “CRM applications: components”, The Young Economists Journal, vol. 1 no. 2, pp. 129-134.
Roberts, M 2005, “Strategy, technology and organizational alignment: key components of CRM success”, Database Marketing & Customer Strategy Management, vol. 12 no. 4, pp. 315-326.