Customer Relationship Management (CRM): A Deep Dive
Customer Relationship Management (CRM)
Customer Relationship Management (CRM) is a model for managing a company’s interactions with current and future customers. It blends operational processes, methodologies, and technologies to create two-way communication, enabling organizations to better understand and anticipate customer behavior and needs.
CRM Functions
Several key functions operate within the CRM framework:
- Sales
- Marketing
- Customer Service
- Technical Support
These functions work together, drawing information from a central customer database to facilitate interactions and feed new details back into the system.
CRM System Options
There are three primary options when building a CRM system:
- Industry-Specific
- Generalist
- Build Your Own
Industry-Specific CRM
Often called “Go Vertical,” these systems cater to the specific needs of a niche sales cycle or product. They address unique information requirements at certain points in the sales process.
Industry-Specific CRM Drawbacks
Some drawbacks exist with these systems:
- Limited market size can hinder continuous technical innovation.
- They can be too restrictive for some organizations.
- They tend to be more feature-focused than sales-focused.
Generalist CRM
This broad category encompasses the majority of CRM systems. Most can be customized to meet an organization’s needs, often through easy “point-and-click” customization, eliminating the need for IT support. These solutions prioritize the sales process with generic features applicable to a wide range of businesses.
Generalist CRM Sub-Categories
Generalist, or customized, solutions fall into two sub-categories:
- Hosted: Cloud-based solutions where information is stored on the vendor’s database and accessed via the internet. These are cost-effective, easy to implement and use, and benefit from automatic updates.
- On-Premise: Solutions purchased outright and maintained internally. These lack online access without additional configuration or investment, and implementation is typically longer and more expensive. Examples include Goldmine, Microsoft Dynamics, and ACT!
Build-Your-Own (BYO) Solution
Robust, often free, development environments and tools like the open-source LAMP stack (Linux, Apache, MySQL, PHP) make building custom CRM systems feasible. Hosting systems and customer data at secure facilities (e.g., Rackspace, Amazon Web Services) eliminates the burden of maintaining in-house infrastructure.