Electronic Customer Relationship Management (ECRM) performs all CRM operations using information technology and network facilities.
All organizations involved in online business and business or consumer-to-consumer business need to educate themselves on the phenomenon of electronic customer relationship management. ECRM, also known as e-commerce customer relationship management, is concerned with attracting and retaining economically valuable customers and losing economically valuable ones (Romano 2001). Romano is convinced that ECRM will continue to be an important area of study in MIS and related reference disciplines such as computer science, marketing, and psychology (Romano 2001).
So, what is the relationship between customer behaviors and corporate opportunities to implement ECRM? Customers shop online for various reasons. A Forrester Research study of 70 retailers found that convenience is the number one reason (84%) for shopping online over offline. The fact that customer service ranks seventh in the list of reasons for shopping online (11%) suggests that customers are willing to provide better levels of “offline” service to businesses by using online services.
Online sellers must acknowledge that first-time buyers on their sites do not necessarily, or even likely, become repeat customers. A study by the Boston Consulting Group found that 65% of online customers who purchase on a particular website will never make a second purchase. These facts should be a wake-up call to web-based companies that there is a real service gap to fill, and additional profits await companies that quickly find a way to fill the gap.
ECRM can help companies solve this challenge. The convenience of online shopping may bring customers through the virtual portal, but what keeps them coming back is the overall quality of the customer experience. Web-enabled organizations need to understand this because it costs $6.80 to market to an existing customer over the Internet versus $34.00 to acquire a new Web customer (Karpinski 2001). Investment in ECRM solutions It gives them the tools they need to create, maintain, and expand competitive advantage in their market spaces. After establishing the necessity of ECRM, this article will discuss the benefits of ECRM systems and discuss five focal points to consider before implementing an ECRM solution.
Table of Contents
What does customer relationship management (CRM) mean?
CRM is a strategy by which companies optimize profitability by increasing customer satisfaction. CRM is about automating and enhancing customer, sales, marketing, and service business processes. CRM also results in increased customer loyalty and this directly affects the organization’s bottom line. CRM works to ensure that all customer-facing organizational functions (eg, sales, marketing, technical support) are efficient and coordinated and ensures that current and potential customers are adequately and appropriately served. The most important purpose of CRM is to manage every instance of interaction with the company’s customers.
CRM manages, stores, and distributes customer information with many built-in tools that can be used for raw data about a customer or any given category of customers. For example, data may be analyzed to segment customers according to demographic, occupational and age characteristics, etc. CRM plays a fundamental role in the marketing and research departments of the organization. For example, if data indicates that most customers are from Texas, a sales and marketing department can tailor strategies for that state. These and other data mining efforts may reveal trends to help businesses make better strategic decisions and use technology wisely to meet customer needs and wants.
What does electronic customer relationship management (E-CRM) mean?
e CRM is the process of maximizing sales with existing customers and encouraging ongoing relationships through the use of digital communication technologies such as operational databases, personalized web messaging, customer service, email, and social media marketing. ECRM is the focused management of the entire e-commerce relationship with each customer to measure, create, and increase revenue and reduce costs for each customer and segment, thereby generating more positive lifetime value. In simple terms, eCRM means accessing the CRM database through the web. This means intranet access for internal users, extranet access for business partners and customers, and of course internet access for them in general.
e-CRM extends traditional CRM techniques by integrating new electronic channels, such as web, wireless, and voice technologies, and integrates it with e-commerce applications into an organization’s overall CRM strategy. Traditional CRM + Internet = e-CRM
Electronic customer relationship management provides a way for a business to interact with its customers and employees through web-based technologies. This process is a combination of software, hardware, processes, and management commitments that support CRM business strategies at the corporate level. , forums, and other channels to achieve CRM goals. It is a well-structured and coordinated CRM process that automates marketing, sales, and customer service processes. Effective e-CRM increases the efficiency of processes as well as interactions with customers and enables businesses to customize products and services that meet individual customer needs.
A typical E-CRM strategy includes collecting customer information, transaction history, product information, click flow, and content information. It then analyzes customer characteristics to provide a transactional analysis consisting of customer profile and transaction history, and an activity analysis consisting of exploratory activities that reveal customer navigation, shopping cart, purchase patterns, and more. Electronic customer relationship management is regulated through easy access to the Internet through various operating systems and devices such as laptops, mobile devices, desktop computers, and televisions. This software is not software, however, but the use of web-based technologies to interact, understand, and ensure customer satisfaction. An effective E-CRM system tracks customer history through multiple channels in real-time, and creates, maintains, and optimizes an analytical database. Customer relationships in three aspects attraction, expansion, and maintenance.
Businesses that strategize and implement an E-CRM solution can align their processes around the technology to effectively deliver a seamless and high-quality customer experience across all channels. Businesses that strategize and implement an E-CRM solution can align their processes around the technology to effectively deliver a seamless and high-quality customer experience across all channels. Customers have the power to help themselves through personalized online services that are available on demand. The Internet provides a simple and ideal medium where customers can find information on websites, purchase products, and find answers using FAQ sections, forums, or chat rooms.
Difference between CRM and CRM
CRM uses telephone, fax, and retail stores to contact customers while eCRM uses wireless, PDA technology, the internet, and email. CRM system design is related to products and business functions while eCRM system design is related to customer needs. Maintaining a CRM is very expensive while maintaining an eCRM is cheaper and only takes less time.
benefits
A recent McKinsey and Company study found that a 10% increase in repeat customers can add about 10% to a company’s profits. On the other hand, a 10% reduction in the total marketing costs required to attract new visitors only adds up. 7% down e-commerce 842 2001 – 7th American Conference on Information Systems (Sims 2000). Delighting existing customers is more profitable than attracting more new customers, even when a company can reduce the cost of acquiring new customers. The best way to delight existing customers is to provide them with value on their terms (Jutla et al. 2000). Anderson Consulting found that 64% of the difference in sales performance between mid-sized and high-performing companies was attributable to ECRM performance (Sims 2000). Improvements in the overall customer experience lead to greater customer satisfaction, which in turn has a positive impact on company profitability. The following benefits can be realized with the proper implementation of ECRM:
- Increase customer loyalty
An effective ECRM system allows a company to communicate with its customers using a single, consistent voice regardless of the communication channel. This is because, with ECRM software, everyone in an organization has access to the same transaction history and customer information. The information obtained by an ECRM system helps a company identify the true costs of winning and retaining individual customers. Having this data allows the company to focus its time and resources on its most profitable customers (epiphany.com). Categorizing the “best” customers in this way allows an organization to manage them more effectively as a superior group, with the understanding that not every customer needs to be treated the same.
One of the tools that a company can implement in the direction of customer loyalty is personalization (Waltner 2001). Personalization software tools create real-time profiles for each customer using data from many sources, including customer databases, click-stream data, and transaction systems. This tool selects the best offer based on what it knows “about that customer” every time a particular customer purchases from the company’s website. As a person accepts or declines an offer, the personalization engine builds this customer knowledge into their profile, allowing for better-informed future offers (Greenberg, 2001).
- More effective marketing
Having accurate customer information from an ECRM system allows a company to predict the type of products a customer is likely to buy, as well as when to buy. In the short and medium term, this information helps an organization create more effective and focused marketing/sales campaigns to attract the desired customer audience (epiphany.com). ECRM allows for more targeted campaigns and tracking of campaign effectiveness. Customer data can be analyzed from different perspectives to understand which elements of a marketing campaign had the greatest impact on sales and profitability, for example (Greenberg 2001).
- Improve customer service and support
An ECRM system provides you with a single repository of customer information. This enables a company to quickly and efficiently address customer needs at all potential touchpoints, eliminating the frustrating and time-consuming “hunting” of the customer for help (epiphany.com). ECRM-enabled technologies include search engines, direct assistance, email management, news or content management, and multilingual support. With an ECRM system, a company can:
- Receive more accurate, update and approach remote orders,
- Entry of materials, costs, and time related to service orders,
- View customer service agreements,
- Search for proven solutions and best practices.
- Subscribe to product information and software patches.
- and access to knowledge tools useful in completing service orders (com).
All of these enhanced capabilities work together to keep the customer where they belong: at the center of the company’s attention.
- More efficiency and cost reduction
Customer data mining automation saves valuable human resources. Integrating customer data into a single database allows marketing teams, sales forces, and other departments within a company to use the same underlying statistics (epiphany.com) to align their information and work toward common company goals. to share Examples of these are identifying unproductive and unusable resources, accurately tracking costs, better forecasting the pipeline, and determining actual project metrics and measurements to determine ROI.
Types of CRM in organizations
CRM should inject different aspects of a business (in the same way that marketing should inject different aspects of a business), but it’s useful to look at different ways of implementing CRM.
Operational CRM refers to the most obvious channels that relate to customers: the front of a business and customer service. From a web technology perspective, operational CRM informs the website a customer views as well as their entire online user experience. Technology also enables effective customer service, from providing multiple contact channels to providing technologies that record all customer contacts.
Analytical CRM analyzes the data collected by a business to determine information about the customer that can inform sales and marketing decisions. Data mining is an essential step for effective CRM. Web analytics and conversion optimization can be considered part of the CRM process. The data collected about the nature of your website visits can be used to make informed decisions about where to focus your attention based on customer behavior. Past buying behavior of customers can be analyzed to predict future buying behavior. Data can be used to segment customers, so communications can be tailored.
For example, Amazon.com uses a customer’s purchase history to recommend future purchases to that customer. Therefore, a customer who has purchased several cookbooks in the past will be sent cookbook offers. Amazon.com also looks at the buying behavior of customers who buy the same book and uses that data to recommend books based on the preferences of similar customers. This process is referred to as common filtering.
Sales force automation uses CRM software to manage the sales cycle and collect customer sales data. This software enables businesses to follow up, plan deals communicate with potential and existing customers, and generate detailed reports on sales trends. There are countless software providers such as Salesforce.com.
Collaborative CRM refers to a process that combines customer data across all aspects of a company. For example, it was shown that regular scanning of the liquor store is provided to technical support or customer service to inform the website update (update the content on the website to address the query that is sent regularly) and is used to inform product development. Instead of different departments collecting and using their customer data in isolation, the data collaborates in such a way that all channels make informed decisions based on a complete customer experience.
- ECRM pre-implementation focal points
Once a company recognizes the need for ECRM, it can begin planning for implementation. The following focal points should be considered in the pre-implementation phase:
- Developing customer-focused business strategies
The purpose of this stage is not to try to create a customer to achieve the company’s goals but to listen to the customer and try to create beneficial opportunities for each. It is important to give customers what they want now and to anticipate what they will want in the future. This can be achieved by providing a variety of access channels for customers, such as e-mail, telephone, and fax, as well as by providing further access channels such as wireless communications.
- Business performance again
To start doing business through ECRM, requires making changes in the organization to determine which departments/functions really serve the customer and which ones just add overhead. After identifying and cutting the excess amount, administrative time and cost should be reduced. An important factor here is that the changes required during ECRM implementation will only be possible with buy-in from the top levels of management and the company. Extensive accountability of all stakeholders. It is the responsibility of senior management to ensure that all employees understand the need for change, how the new structure will benefit them, and how it will enhance their ability to serve customers.
- Work process reengineering
The roles and responsibilities of departments of business functions are reworked, and adopting new work processes is essential. The options here are to take a traditional step-oriented or integrated approach to improving work efficiency. According to the step-by-step approach, departments are considered separate functional units. This rarely works well because the goals of each department can become too narrow and departments tend to compete for their benefit at the cost of what is best for the company. We recommend an integrated approach. It tends to produce superior results because it recognizes the interdependencies between different functions and departments of the company and how these create a bigger picture for the whole organization.
- Technology options
The focus here is to consider the company’s industry, the company’s position in its industry, and what ECRM settings are good candidates for the particular company. Technology selection criteria include the following:
- Software scalability
- Tool flexibility for customization
- Stability of existing ECRM application code
- Compatibility of the ECRM application with legacy systems and the Internet
- Level of technical support available during and after implementation
- Upgradeable support
- Availability of additional modules (Sims 2001).
We cannot stress enough that an in-depth study of the compatibility of a proposed ECRM system with a company’s existing ERP system is necessary. Client applications must be coherently linked to the transactions they create behind the scenes. Without the integration of ERP and ECRM systems, organizations face increased data risk, increased response time, and lost customers due to delays and transaction losses. However, with such integration, improved business intelligence is possible by capturing information at every point of customer contact, from order entry to fulfillment, across multimedia channels.
- Training and preparation
This focal point is probably the most important in ECRM implementation. Employee training should be done before implementing the new ECRM system to ensure a seamless transition for customers. Anyone who needs to access the system should receive thorough, appropriate, and timely training. Training must be an ongoing and managed activity because systems must constantly change and evolve. All training and tools used must be documented for current, new, and future employees. Without a document management program, the value of an ECRM system can quickly decrease. A company should plan to spend about 5% of its entire ECRM implementation on training (computerworld.com).