Role of IT in CRM

CRM is more than just software. Information Technology (IT) in CRM has three key elements—customer touch points, applications and data stores.

Customer touch points are vital if the business has a marketing orientation and focuses upon the customer and his or her current and future needs. This is the interface between the organization and its customers. For example, when you buy a new car from a dealer­ship, the dealership is a contact point. The salesperson is a contact point. You go home and look at the car manufacturer’s Web site, and then send the company an e-mail. Both are contact points.

Applications are essentially the software and programmes that support the process. Applications serve marketing (for example, data mining software and permission market­ing), sales (for example, monitoring customer touch points) and service (for example, cus­tomer care).

Data stores contain data on every aspect of the customer and the customer lifecycle (CLC). For example, an organization keeps data on the products you buy, when you buy them and where they are sent. Data is also kept on the web pages that you visit and the products that you consider, but then do not buy. Leads are stored here.

Data mining is where an organization evaluates large data stores for patterns, or rela­tionships between groups or individuals (or segments). Applications present “patterns” in a format that can be used for marketing decision making.

Permission marketing is where a customer elects to accept (or “opt-in” to) marketing mate­rial from an organization. For example, when you buy insurance and the vendor asks if you wish to receive further details from them or similar organizations. It is called so because mar­keters need your “permission” to market to you. Permission marketing can occur at any of the customer touch points.

e-CRM

Many companies have used the opportunities offered by the Internet to reduce customer- service costs, tighten customer relationships, further personalize marketing messages and enable mass customization. Along with the creation of Sales Force Automation (SFA), where electronic methods were used to gather data and analyse customer information, the Internet can be seen as the foundation of what we know as e-CRM today. We can define e-CRM as activities designed to manage customer relationships by using the Internet, web browsers or other electronic touch points.

Channels, through which companies can communicate with its customers, are growing by the day, and as a result, getting their time and attention has turned into a major challenge. One of the reasons e-CRM is so popular nowadays is that digital channels can create unique and posi­tive experiences—not just transactions—for customers. An extreme example of the creation of experiences in order to establish customer service is the use of virtual worlds such as Second Life. Through this so-called e-CRM, companies are able to create synergies between virtual and physical channels and reaching a very wide consumer base.

Furthermore, Information Technology has helped companies to even further differenti­ate between customers and address a personal message or service. Some examples of tools used in e-CRM are:

  • Personalized Web pages where customers are recognized and their preferences are shown.
  • Customized products or services (Dell).

CRM programmes should be directed towards customer value that competitors cannot match. However, in a world where almost every company is connected to the Internet, e-CRM has become a requirement for survival, not just a competitive advantage. Box 15.4 discusses the e-CRM implementation at Aviva Life Insurance.

Source: Poornima M. Charantimath (2017), Total Quality Management, Pearson; 3rd edition.

One thought on “Role of IT in CRM

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