Understanding CRM, Function and Purpose, Components, and Stages of CRM

What is CRM (Customer Relationship Management) ? The definition of CRM  is integration and strategy used by companies to handle interactions with customers. Through this CRM you can find out the most updated information about customers, ranging from complaints, product requests, and types of services that need to be improved.

For some divisions, information from CRM is very important where you can see the problems faced by customers to the trends that are popular. Today many companies are trying to be active on social media so they can get closer to their customers. From here also can see, like whether customers define the company (read: the understanding of the company ) in social media; satisfying or vice versa?

This form of CRM has traditionally been a customer service that is connected via telephone, but now it is in the form of software that can also be connected to social media so that it is easier and does not need to lose track. Even more flexible functions.

Understanding CRM According to Experts

Customer Relationship Management (CRM)  in Indonesian means Customer Relationship Management. Some management science experts have explained about customer relationship management, including:

1. Kalakota and Robinson

According to Kalakota and Robinson, the notion of CRM is the integration of coordinated sales, marketing and service strategies.

2. Laudon and Traver

According to Laudon and Traver, understanding CRM is the process of storing customer information and recording all contacts that occur between customers and companies, as well as creating customer profiles for company staff who need information about these customers.

3. Kotler

According to Kotler, understanding CRM is the process of supporting companies to provide services to customers in real time and establishing relationships with each customer through the use of information about customers.

4. Haryati, S

According to Haryati S, the notion of CRM is a series of systematic activities that are managed as an effort to increasingly understand, attract attention, and maintain customer loyalty that is profitable (Most Profitable Customer) to achieve healthy company growth.

Also read:  Definition of Management

CRM / Customer Relationship Management function

Whatever form of  Customer Relationship Management (CRM), the  system of CRM must be able to perform the following functions:

  • Identify various important factors for customers
  • Has a customer-oriented philosophy (customer centric)
  • Can serve and handle customer complaints
  • Make a measurement basis based on the customer’s point of view
  • Providing perfect customer support
  • Record and follow all aspects of sales
  • Providing holistic information (read: holistic understanding) about service and sales information from customers.

Customer Relationship Management (CRM) Components

In practice, the main component of customer relationship management is Sales Force Automation (SFA). SFA can help Sales Representatives to manage customer accounts and track opportunities, manage contact lists, manage work schedules, and so on.

Referring to the understanding of CRM, here are some components in customer relationship management:

1. Customers

Customers are all parties who will, ever, and are currently using the services or services provided by the company, both in the process of seeing, making purchases, and maintenance.

For the record, only a small proportion of customers are potential customers. Generally, 80% of company profits are derived from 20% of potential customers.

2. Relationship

When building relationships with customers, companies must pay attention to two-way communication. The purpose of the relationship is to provide long-term satisfaction between the two parties, the customer and the company.

3. Management

Customer relationship management focuses on managing and enhancing relationships between companies and customers. A solid relationship between the company and the customer will help the company in developing competitive advantage.

Also read: Understanding Communication Management

Stages in CRM

After understanding the notion of CRM  then we also need to know what the stages are. According to Kalakota and Robinson there are several stages in customer relationship management, including:

1. Get New Customers (Acquire)

This can be achieved by providing easy access to information to prospective customers. In addition, the existence of innovations and interesting services also provide an important role in the process of getting new customers.

2. Improve Customer Relations (Enhance)

In this case the company is trying to improve its relationship with existing customers by providing the best service, for example receiving and handling complaints, giving rewards to loyal customers.

Furthermore, implementing cross selling or up selling will increase the company’s sales and reduce the cost of finding new customers.

3. Retain Customers (Retain)

There is no business that wants to lose its customers. Companies must try to get customer loyalty by trying to meet customer expectations.

Also read:  Understanding Management Information Systems

Terms in CRM

There are two terms that must be known in customer relationship management, namely ” CRM on-premise ” and ” Cloud CRM “. Both have many advantages and there are also disadvantages. But for several reasons, companies often choose the first.

ON-Premise CRM is a customer relationship management software tool that is carried out on the company’s own server. The company can customize the system as needed. Because it is managed by itself, the company feels the data is safe. Unfortunately, this system cannot use cloud.

1. Cloud CRM

Coud CRM is also known as CRM Online, CRM SaaS and CRM on-Demand which are managed on an external server or service provider. This server can be accessed through a browser on the internet and can be accessed anywhere so that work is more flexible.

Even the cloud server does not require installation and maintenance. As long as there is internet, everyone can reach CRM from certain devices and places.

2. CRM Entity

CRM Entity is software used to manage customer data in the system. So the contents are about the company database, from telephone numbers to Lead records.

In addition, CRM also has a template name. Usually companies use the Lead and Contact template or usually called the Account . In addition there Deal ( opportunity), quotes , orders and more. Everything can be customized.

  • Lead; In terms of customer relationship management, leads also mean potential customers. This potential customer can be a person or organization interested in the company’s offer.
  • Contact; Contact usually refers to customers who have already purchased company services.
  • Deal; Deal is a term in CRM that refers to the pre-purchase stage. Usually a deal is also a status when someone becomes part of a customer. In terms of customer relationship management, this field provides many significant effects. There will even be many problems when the company does not have this management.

Consideration about the benefits of using another CRM system is a matter of flexibility where all data is managed automatically and work can be done anywhere. In addition, CRM is able to be a source of company information about product trends that are less liked or less than the maximum, so the company can determine more advanced steps to improve performance both in terms of service, and its real products.

Also read:  Change Management

Thus an explanation of the understanding of CRM or customer relationship management, the  purpose of CRM, CRM components, CRM functions, and some terms in CRM. May be useful.


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