Customer Relationship Managemnt
...and assimilate it in a way that it can be used in planning, analyzing and making organizational decisions. Most companies probably have numerous databases setup throughout their organization, but they are not use effectively. By have a central storage unit, all member of the organization will have access to the information collected by the company regardless of who actually collects the data. This will allow for better business decisions and customer service. Once the information is stored in the central data warehouse, it must then be analyzed in some way. The analyzing of this data is called data mining. It is the process of evaluating the information in the warehouse by looking for specific patterns. It will take unrelated data and then match against other data in order to find similarities between the two sets of data. By doing this, the user will most likely acquire information that they were not aware of when they starting mining the data. They can then take this data and use it in determining marketing campaign objectives and target specific markets. It will also provide the company with specific information that can be used to meet customer needs and ultimately help in providing a highly customized product or service. Data mining is very important in any CRM approach and highly beneficial to the organization. By using proper mining techniques, the user will be equipped with the necessary information to accurately predict future customer behavior. So what are some of the outcomes of implementing CRM throughout the business organization? One of the initial outcomes of using CRM is that it should be put to use throughout the entire organization. This allows all members of the organization from top to bottom to view the data collected on a daily basis. This allows for employees to be able to use information collected by other departments to spend less time collecting data and spend more time on using the data to make decisions that will enhance the relationships with current customers. One of the most important outcomes is that it will allow you the opportunity to target your most profitable customers. By continuously collecting and analyzing data, a company should be able easily figure out what customer is profiting them and what customers are not. Knowing this information allows for the business to make sure the needs are met for those profitable customers and it also gives the information to look towards providing that customer with a personalized product. The reason a company should primarily focus on its most profitable customers is due to the 80/20 principle. The principle says that 80% of your revenue will come from 20% of your customers. So if a company wants to make a profit, they will benefit from learning about their most profitable customers, finding out what they want and then using that information to retain those customers. This leads to another outcome of the CRM approach, which is customer retention. Most companies know that acquiring new customer is a very expensive expenditure while retaining customers is much cheaper. In order to retain these customers, companies will have to be able to distinguish themselves from their competitors. By actively learning about your customers and nurturing that relationship, customers are more likely to stick with the company even if they have higher prices. Customization of products then becomes very important for any business. People are looking for products and services that meet their own needs. Considering that not all people are the same and want the same things, a company who can find a way to provide a personalized product will have a great advantage over their competitors. Personalized products give the customer a sense of being important and knowing that the company really cares about what you want and what product will satisfy you. Is CRM worth the cost? In my opinion the benefits of CRM will outweigh the costs in the long run. While the initial cost of implementing the CRM system is very expensive, these can be overcome very easily. By actively learning what your customers want, you are more likely to build a long lasting relationship. This gives you a better chance of repeat purchases from those same customers. This is also very important because retaining profitable customers is much cheaper than trying to acquire brand new customers. When CRM is practiced properly, all employees will be given the tools to access all customer information and know ho...