A customer relationship management application solves customer-based business problems, supports the sales process, and advances enterprise resource planning (ERP) initiatives.
Forrester defines customer relationship management (CRM) (link resides outside ibm.com) as “the business processes and supporting technologies that support the key activities of targeting, acquiring, retaining, understanding, and collaborating with customers.”
Customer relationship management software helps companies measure and control their lead generation and sales pipelines. It can also be used for lead management, sales forecasting, and managing communications with potential customers. For example, within a call center environment, a sales CRM system can analyze the frequency, volume, and outcome of follow-up communications with new leads. The data is then used to research and analyze the overall customer relationship and improve workflows.
Today’s CRM solutions include multiple technologies relative to deployment size, business model, and industry verticals. In addition to supporting e-commerce and marketing tools like Mailchimp, CRM applications offer order, revenue, social media, and opportunity management.
Forrester’s recent CRM Playbook (link resides outside ibm.com) indicates that 61% of global software decision-makers were implementing, had implemented, or were expanding their implementation of customer service software. Meanwhile, 58% of software decision-makers intend to do the same for sales force automation (CRM) applications; 17% of decision-makers plan to adopt customer service software within the next year; and 18% intend to adopt sales force automation.
When properly integrated into your system, a good CRM adds value to your business in two significant ways:
When quantifying the business value of CRM, its benefits should address revenue generation and cost-efficiency. Therefore, your CRM should support existing business processes and technological capabilities. According to Forrester, CRM benefits fall into three distinct categories (link resides outside ibm.com):
These benefits help build customer lifetime value, which ultimately increases customer retention. In fact, CRM automation alone increases customer retention by as much as 15% 1.
To remain competitive and achieve customer satisfaction, companies must adopt innovative CRM tools from vendors offering feature-packed products and services that are often industry-specific. With the availability of multiple solutions, it is important to consider what is driving your overall business objectives. Whether it be the technology, architecture, functionality and usability of your application, the overall cost, risk and speed of your project, or the product vision and partner services provided by your selected vendor, your CRM is critical to the present and future development of your enterprise.
The CRM needs and capabilities of a business-to-business (B2B) enterprise differ from those of a business-to-consumer (B2C) enterprise, as the CRM needs and capabilities of small businesses differ from those of large companies. As a result, there are four primary types of CRM solutions specific to large companies, small- to mid-size businesses (SMBs), and start-ups:
According to Gartner, larger organizations must manage a diverse portfolio of CRM applications at different maturity levels. It is advised that companies “engage one core CRM vendor to meet your broader organizational goals, but accept that others will need to be integrated to the core.” 2
Smaller organizations typically only need one CRM tool, whereas larger organizations may require additional CRM applications and third-party integrations. Regardless of company size, versatile CRM platforms that unify data entry, business processes, and security within various departments are becoming more prominent in the market:
The transformation of customer engagement is one of the primary benefits of CRM, and it must be achieved in increments. Forrester identifies three important areas of risk associated with CRM implementation 1:
AI-powered virtual agents use natural language processing (NLP) to interact with business systems and provide new customers with high-level solutions across messaging platforms, applications, channels, or devices. These virtual agents can guide human support agents to the information they need to resolve customer queries, thus improving the overall customer and human support agent experiences. When conversational AI is paired with ML-driven speech-to-text capabilities, first contact information and resolution during voice interactions are significantly improved.
Some virtual agents can integrate with your existing CRM and customer care systems, helping you improve issue routing by connecting customers to the right agents the first time.
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Natural language processing strives to build machines that understand and respond to text or voice data—and respond with text or speech of their own—in much the same way humans do.
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