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THE BUSINESS CASE FOR CRM

In an interesting Harvard Business Review article about customer retention and the direct relationship to company profitability, the study found that for many companies, an increase in customer retention rates of just ten to fifteen percent can double company profits. This comes as no surprise to business executives that know well that their best source of income is their customer base. However, the challenge not as easily understood is how to identifying the most profitable clients and then implement a system that assures their retention and increased customer share over time – all while increasing the total customer base.

CRM (Customer Relationship Management) is a business strategy focused on customer management, retention, growth and profitability. It is a specifically designed and systemic method to help companies implement customer facing business processes to better accommodate customers, enhance customer relationships and increase revenues and profitability from customers. Information systems facilitate CRM business objectives and processes by using powerful software applications to automate customer facing tasks, activities and processes. In most cases, CRM systems integrate with back office sales order processing and inventory management functions in the accounting software application. This front-to-back office significantly increases automation and efficiencies. CRM systems enable today’s business managers and executives with increased visibility to real-time information and permit them to better control their businesses – without negatively impacting current staff or needing to hire more people.

For many Russian companies experiencing growth or incurring challenges in increasing customer share, a sought after benefit of CRM software is business process efficiency. Every executive and sales person knows it is faster to improve the bottom line by decreasing costs as opposed to increasing revenues. CRM software systems can help with both. CRM software systems leverage the time and activities of nearly all customer facing staff. However, depending upon the CRM application and particular implementation objectives, companies will likely differ as to who are the primary benefactors of CRM software automation and efficiencies. For some companies, the most benefited staff are the users, such as customer support representatives, marketing staff or sales people. Their real-time access to information and leverage of software automation permits them to more easily achieve their measured objectives, key performance indicators, financial metrics and quotas. CRM software often results in users becoming much more self-reliant and productive.

For other entities, the most significant benefits are achieved at the decision-making and managerial level. CRM applications empower decision makers with key dashboards, metrics and clear business process visibility in real-time. Graphical dashboards deliver detailed snapshots of operations from customer service operations to marketing campaigns to daily sales performance. Real time visibility into the business details is a major competitive advantage for today’s Russian executive. More so, with growing competition and rapid market changes posing constant challenges and pressures – it is critical that Russian managers be empowered with information in order to make the right decisions. The real time visibility provided by Customer Relationship Management software gives a company new flexibility and new strategic advantage by allowing for near real-time action and reaction in order to be proactive in meeting customer demands and growing the business. CRM software systems also permit executive management with competitive intelligence (CI) visibility, 'what-if' business strategy modeling and the added time needed to outperform the competition.

How companies’ plan and execute new market initiatives is another make or break business proposition. Not that long ago, companies had a limited number of effective methods to contact prospects, measure responses and view trends. Today, there are multiple customer contact and distribution methods that with real-time reporting and analysis can be effective. Example include e-mail campaigns, nurture campaigns, faxes, Web 2.0 and social media, online media, print advertising, network marketing, various Internet promotions, trade shows, VARS, distributors, seminars, radio and much more. Complicating the efforts, prospects and customers are overwhelmed with media noise and only certain customer touch points will be effective with each type of customer. Within a powerful on-premise or on-demand CRM system, companies can cut through the noise, target specific markets, collect and group consumer or customer data and then design, test and automate marketing initiatives that are based on quantifiable analysis – resulting in the most cost effective marketing programs and highest marketing budget ROI.


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