Customer Relationship Management is very commonly referred to as CRM and it is defined as “the business and technology discipline that uses information systems to coordinate all of the business processes surrounding the firm’s interactions with its customers in sales, marketing, and service” (Laudon and Laudon 2017: p. G-3).  Customer relationships are important to a business for a set of different reasons ranging from the impact on sales from within a warm market all the way to the way that goodwill increases the likelihood of being able to reach a solution for both customer retention and even alternative dispute resolution.  No discussion of Customer Relationship Management is complete without diving into how CRM Systems work and how they can assist organizations to achieve their goals and I will get into how different types of CRM Systems help different businesses to get to know their customers well and how they help businesses make their good customers feel special, almost like running a small-town store (p. 353).

Customer Relationship Management has at its core a goal of putting a customer first and being what is termed a “customer driven organization” which requires a business with different departmentally compartmentalized data silos to put together a type of synchronized, integrated and automated system of managing and utilizing data in a human relatable way (p. 353).  Businesses like Splunk.com have aimed at giving businesses a central optic on their different data silos (Emmett, Online Article) and technology has developed to a point where any of a growing number of different CRM Software systems can be fed into by different collection methods and can then in turn feed into Relational Databases and Unstructured Vector Databases which can then be worked on by different integrated and automated mashups of different AI Neural Networks utilizing Large Language Models and also be the impetus to trigger different less customized and more standardized yet proven business processes like automated email sequences etc.

Proper timing of different business sequences and a slight insertion of more personalized information into things like the body of a prewritten email with AI created responses to prompts that trigger an AI to apply its general LLM to the most appropriate chunks of an overall set of unstructured data from a vector database that fit together based on algorithmic analysis of similarity and all have to do with the different interaction data and comments/responses from a Client and/or Potential Client can become the step by step building blocks for what goes into a Client’s decision to be a Client for Life (Liam Ottley, YouTube).  CRM goes beyond just making a sale and or a second or third sale.  CRM is a science where practitioners are getting better and better at building what its name connotates, namely Relationships.  People feel a much more human level of affinity for businesses that implement more integrated and personalized AI enhanced CRM strategies.  Customers are growing more accustomed to customization of software to the point where they are requiring it as the necessary method of product delivery in order to maintain high customer satisfaction.

CRM Software is becoming more comprehensive and integrated with elements like Partner Relationship Management (PRM) and Employee Relationship Management (ERM) now included in some packages with a wider breadth  (Laudon and Laudon 2017: p. 353).  Parter Relationship Management Software (p. 354) is largely used when a company used sales and distribution partners who in turn then sell to the direct customer and then trade information as well as analyze the performance of the different partners.  CRM Systems now also many times have what is called a Sales Force Automation or SFA module to help sales staff to focus on their past customers who have characteristics that indicate they are most likely to purchase again (p. 354).  SFA entails the ability to drill down through data about past purchases so that personalized recommendations can be delivered to the customer by the sales professionals (p. 354), thus reducing the cost per sale, the cost of acquiring new customers and the cost of retaining old ones.  Sales Forecasting, territory management and team selling are also included in these types of modules.  Customer service is a module that is closely related to SFA because it provides information to and increases the efficiency of call centers, help desks and customer support staff which in turn helps keep clients and make new support sales (p. 355).

Marketing itself has a category inside of CRM for direct-marketing and cross-selling by utilizing prospect and customer data, analyzing product and service information, qualifying potential customers for being put into a category for targeted marketing and/or switching tracks to a cross-sold complementary product (p. 355).  CRM systems support marketing by giving a set of different communication channels through which to promote a campaign which include email, social media, direct mail, telephone and web (p. 355).  Customer Data is utilized inside of the Sales, Marketing and Service processes of business with corresponding functionalities inside of the CRM Software which is business-process driven (p. 356).

Each of the main areas in each category of CRM Software incorporates hundreds of analyzable business processes which can be correlated with best business practices in each area and as a general rule of business philosophy, businesses need to align their business processes within their business model to match up to the best-practice of each type of business process that is tracked by a comprehensive CRM System (p. 356).  Sales business processes that can be monitored include Account Management, Lead Management, Order Management, Sales Planning, Field Sales, and Sales Analytics (p. 356).  Marketing business processes that can be monitored include Campaign Management, Channel Promotions Management, Events Management, Market Planning, Marketing Operations, and Marketing Analytics (p. 356).  Service business processes that can be monitored include Service Delivery, Customer Satisfaction Management, Returns Management, Service Planning, Call Center & Help Desk, and Service Analytics (p. 356).  A Customer Loyalty Management Process Map and helps firms who their high-value customers are (p. 357).

Customer Loyalty and the Customer Lifetime Value (CLTV) of a customer can be tapped into using Operational CRM which is customer facing and then by using Analytical CRM which analyzes the data that is collected using the Operational CRM (p. 357).  Unstructured Data in large data warehouses and also more structured data in relational databases can be analyzed by data platforms and then used for online analytical processing (OLAP), data mining, and other data analysis techniques like determination of Intent using unstructured data collected from comments and chats and stored in vector databases that are then broken into chunks and then analyzed by Intent Trained Instances of AI programs (p. 357).  This all helps increase the CLTV realized by a business with individual customers that then adds up to major profits and is calculated using the revenue produced by a specific customer, the expenses incurred in acquiring and servicing the customer and the expected life of the customer/company relationship (p. 357).

Effective utilized, a CRM system and all of its components will create a benefit to the company that is made up of a combination of increased customer satisfaction, reduced direct-marketing costs, more effective marketing, and lower cost for customer acquisition and retention (p. 357).  CRM Information increases sales revenue by helping a company to narrow the focus of its efforts to the customers who yield the most profitability after focused marketing and cross-selling thus reducing customer churn as sales, service, and marketing are benefitted by a better company response to customer need as determined by the analysis done using a CRM Software System (p. 358).  CRM has become one of the main core software system types in 2024 that assists organizations in achieving their goals.

BIBLIOGRAPHY

Laudon and Laudon (2022). Management Information Systems: Managing the Digital Firm (16th ed., pp. 353-358, G-3). Pearson.

Emmett, B. (2017). How to stop playing the blame game in your IT department. Splunk.com.   www.splunk.com/en_us/blog/it/how-to-stop-playing-the-blame-game-in-your-it-department.html

Liam Ottley. (2023, August 9). How to Build Chatbots | Complete AI Chatbot Tutorial for Beginners [Video]. YouTube. www.youtube.com/watch?v=jCoH82LPgdk&t=4726s