Customer Relationship Management: Importance, Features, Misunderstanding, Benefits of CRM Solutions

What is Customer Relationship Management? (CRM)

CRM is the strategy to build strong relations with customers and at the same time reducing cost and enhancing productivity and profitability in business .CRM plays an important role in maintaining and creating relationships with customers. To develop good Customer relationship is a business nonetheless it also idea strong personal bonding within people. CRM drives business to new levels of success.

What is Customer Relationship Management?
What is Customer Relationship Management

CRM is a platform for all business units to interact with their clients. It is very difficult to manage relationship with the customer. It majorly depends on how the systematically and flexibly a CRM system is implemented or integrated.

A CRM system is not only used to deal with the existing customers but is also useful in acquiring new customers. CRM strategies have given a new outlook to all the suppliers and customers to keep the business going under an estimable relationship by fulfilling mutual needs of buying and selling.

We can say that there is change is relationship with the customers from time to time as environment is very dynamic. Below mentioned are the few stages from where the relationship with customers can evolve.


In this stage a customer tries to investigate the supplier’s competency and they cross verify the product or brand usefulness for them. If the test results fail to satisfy customer’s demands, the relationship canend.


Awareness is the process when the customer understands the motivational values of supplier or the products he sells.


Here supplier wins customer’s faith and customer falls under the interdependence of the supplier. Supplier’s business gets expanded and does business with the particular customer.


Commitment is a powerful stage when suppliers learn to adapt business rules and goal to excel.


Dissolution is a stage when customer requirement suddenly changes and he looks for better perspectives. This sudden change is the end of relationship.

There are various reasons due to which relationship comes to an end.

  • Customer is not satisfied with the product-or the service of the supplier.

  • Customer may diverge to other better brands and products.

  • Suppliers can also prefer to break relationships due to customer failing to to increase sales volume.

  • Suppliers are entangled with fraud cases.

Trust and commitment are the two attributes which can develop a strong relationship between supplier and customer.

Relationship is always mutual or reciprocal so it is important for both supplier and customers to stick to common guidelines to attain sustained relationship with each other. There is lot of involvement of cost, efforts and time in developing relationships between the two parties but the outcome is unpredictable.

Different Types of Customers

Customer is the king. Customer use products and services and then judges its quality. Customers are the responsible for the profit of the organisation. Hence, it’s important for an organisation to retain customers or make new customers and flourish business.

Customers can be of following Types are:

Loyal Customers

They are less in numbers, promote sales and profit, are completed satisfied with the product and service of the organisation, frequently visit the organisation. They want individual attention and demand politeness and respect from the supplier. Hence it is crucial to interact and keep in touch with them on a regular basis and invest time and effort with them.

Discount Customers

They are frequent visitors but they visit only when the discounts are provided on regular products and brands. If more discounts are provided, they purchase more. Focus on these.types of customers is important as they also promote distinguished part of profit into business.

Impulsive Customers

This type of customer do not have any specific item in their product list but they urge to buy what they find good and productive at that point of time. Handling these customers is a challenge as they are not particularly looking for a product and want the supplier to display all the useful products, in front of them to choose from.

If impulsive customers are treated accordingly then there is high probability that thay could be a responsible for high percentage of sales.

Need Based Customers

Means that customer purchase that product or service which they are in need of and only tend to buy items to which they are habitual. These are frequent customers but do not become a part of buying most of the times so it is difficult to satisfy them.

These customers should be handled positively by showing them ways and reasons to switch to other similar products and brands and initiating them to buy. These customers could possibly be lost if not tackled efficiently with positive interaction.

Wandering Customers

These are the least profitable customers as sometimes they themselves are not sure what to buy. These customers are normally new in industry and most of the times visit suppliers only for confirming their needs on products.

They investigate features of most prominent products in the market but do not buy any of those or show least interest in buying. To grab such customers, they should be properly informed about the various positive features of the products so that they develop a sense of interest.

Orientation of Customer

Orientation of customer means how the customer’s preferences are possessed or in what areas of business the customers are conscious. A customer can be cost oriented, value oriented or technology oriented as discussed below :

Cost Oriented Customers

Customer focuses on low cost product and is ready to compromise on efficacy, performance and quality.If the problem arises in the product, they blame the supplier instead of blaming themselves as they have selected the cheap product.

They try to get problems fix by the local vendor as the product is a low–cost one. These vendors work with marginal profit, so accountability is low. What they do is not quality work as they are not actual manufacturer of that particular product and may lack many aspects in repairing the machine.

In case the machine fails again, these customers blame the original supplier and he then has reimburse. In some cases, these customers are ready to buy second hand products and expect it to perform as a new one.

Hence the suppliers should focus on strategies which are not only performance or quality driven but also self–driven, otherwise they will find themselves in payment problems for which they have to put extra effort and cost of recovery of payment from these customers.

Value Oriented Customers

These type of customer prefer efficient and high performing products rather than low–cost ones. They are aware that in a long run it would be a profitable deal. They believe in one time investment and repair free benefits in future. These customers tend to maintain a healthy relationship with suppliers as they are the satisfied customers.

Technology Oriented Customers : These types of customers are interested in making use of best technology good quality and performance. They feel that using the latest technological products, they can sustain in the dynamic environment. Supplier who are developing new technological product can do business by capturing these types of customer.

They also have a tendency for experimenting with new things and do interact with people of same nature. The suppliers are helped by them in creating new referrals and increase the business. These customers are also satisfied customers and end up by making worthy relationships with suppliers.

It is important for the supplier to study orientation of the customer. It will help them to identify specific customer needs and transact accordingly. They can develop strategies to grab customer by fulfilling their aspirations and turn them to satisfied customer.

Importance of CRM

CRM is the final goal of a new trend in marketing that focuses on understanding customers as individuals instead of as part of a group. Marketer makes there communication more customer specific.

CRM plays an important role in maintaining and creating relationships with customers. To develop good Customer relationship is a business nonetheless it also idea strong personal bonding within people. CRM drives business to new levels of success.

Most organisations have dedicated world class tools for maintaining CRM systems in their workplace.Now, look at some broader perspectives given below from which we can easily determine why a CRM System is always important for an organisation.

  • A CRM system consists of a historical view and analysis of all the acquired or to be acquired customers. This helps in reduced searching and correlating customers and to foresee customers’ needs effectively to increase business.

  • CRM contains every bit of details of a customer, hence it is very easy to track a customer accordingly and can be used to determine which customer can be profitable and which may not be.

  • In CRM system, customers are grouped according to different aspects, the type of business they do or the physical location. They are allocated to different customer managers often called as Account Managers. This helps in focusing on each customer separately.

  • A CRM system is not only used to deal with the existing customers but is also useful in acquiring new customers. The process starts with identifying a customer and maintaining all the corresponding details in the CRM system which is also called an ‘Opportunity of Business’.

    The Sales and Field representatives then try getting business out of these customers by rigourougly following up and converting them into a winning deal. This is very easily and efficiently done by an integrated CRM system.

  • The strongest aspect of CRM is that it is cost–effective. The advantages of implemented CRM system are that there is less need of paper and manual work which means lesser staff to manage and lesser resources to deal with. The technologies used in implementing a CRM system are also not costly.

  • All the details in CRM system are kept centralized which is anytime on fingertips. This reduces the process time and increases productivity.

  • Efficiently dealing with all the customers and providing them what they actually need increases the customer satisfaction. This increases the chance of getting more business which ultimately enhances turnover and profit.

  • If the customer is satisfied, they will be loyal and will remain in business forever resulting in increasing customer base and ultimately enhancing net growth of business.

  • In today’s commercial world, practice of dealing with existing customers and thriving in business by getting more customers into loop is predominant. Installing a CRM system can definitely improve the situation and help in challenging the new ways of marketing and business.In an efficient manner. Hence every organisation should be recommended to have a full–fledged CRM system to cope up with all the business needs.

Features of CRM

Customer Relationship Management is primarily entangled with the following features are:

Features of CRM
Features of CRM

Customer’s Needs

It is very important for the organisation to identify the customer needs by knowing the customers (likes and dislikes), and interviewing them, thereby enabling organisation to satisfy their needs. Without identifying the needs, it is an arduous task to serve the customer effectively and maintain a long–term deal.

Customers Response

Customers response means Organisation reactions towards the queries and activities of the customer. It is very important for the organisation to deal with these queries in a competent way in order to minimize misunderstanding.

Success of the organisation depends on the how tactfully they deal with these queries and provide the best solution. If the supplier solves customers’ queries proficiently, he can able to succeed in developing professional and emotional relationship with him.

Customer Satisfaction

Customer satisfaction is defined as a measurement that determines how happy customers are with a company’s products, services, and capabilities. In today’s competitive business marketplace, customer satisfaction is an important performance exponent and basic differentiator of business strategies. Hence, the more is customer satisfaction; more is the business and the bonding with the customer.

Customer Loyalty

This type of customer is loyal towards supplier and buy products on the regular basis. If the customers are satisfied with the service of the supplier, then they visit the organisation more frequently or he rebuys a particular product or brand many times by that supplier.

To continue the customer loyalty the most important aspect an organisation should focus on is customer satisfaction. Hence, customer loyalty is an influencing aspect of CRM and is crucial for business success.

Customer Retention

Customer retention is a strategic process to retain the existing customers and not letting them to diverge or defect to other suppliers or organisation. Usually a loyal customer is tended towards sticking to a particular brand or product as far as his basic needs continue to be properly fulfilled.

He does not opt for taking a risk in going for a new product. More is the possibility to retain customers, the more is the probability of net growth of the business.

Customer Complaints

Always there exists a challenge for suppliers to deal with complaints raised by customers. Normally a raising complaint indicates the act of dissatisfaction of the customer. There can be several reasons for a customer to lodge a complaint.

A genuine reason can also exist due to which the customer is dissatisfied but sometimes complaints are lodged due to some misunderstanding in analysing and interpreting the conditions of the deal with the supplier. Handling these complaints to ultimate satisfaction of the customer is important for any organisation. Hence it is essential to have predefined set of process in CRM to deal with the complaints and efficiently resolve it quickly.

Customer Service

It is the process of delivering information and services regarding all the products and brands. Customer satisfaction depends on the quality of the service delivery. If the quality and trend of service go beyond customer’s expectation, the organisation is supposed to have a good business with customers.

Misunderstanding of the CRM

Many companies have misconceptions about CRM in regard to assessing customer satisfaction in order to enhance business. There are several misunderstandings in CRM to be checked otherwise these may cost the organisation revenue and profits.

Identifying CRM With A Software System

Three important aspects plays important role in the success of CRM business strategy – people, business process and technology. It is not possible to implement the CRM successfully without these three. So, CRM is not an IT issue only to be simply equated to software.

It would be improper to have a successful business purely ‘technology– centric’ ignoring the importance of people and processes. Software is only an enabling or a facilitating device.The process is implemented and enabled by the software only when it is properly designed and developed by people. Only then it can deliver customer and company value.

CRM Is A Complicated System, Difficult To Understand

The meaning of CRM is simple – to fetch customers, retain them and maximize profitability. Because of the fast–developing technology there is pressure on IT professionals to cope up with the new developments. So, the ‘how’ part of implementing CRM may be felt difficult.

But the ‘why’ part of the CRM concept is also not difficult to understand. If we look back when there was no IT implementation, customer relationships were being managed then by keeping in mind a customer database.

Presently, with advanced technology the quality of customer management has entirely changed. But the core of CRM and the target remain the same – to maximize business profits. Keeping this perspective in mind, proper techniques must be employed to access its utility.

CRM Is Expensive And Unaffordable By Small Enterprises

It is a myth that IT maintenance cost is unaffordable by small and medium class entrepreneurs. Nowadays Application Service Providers with simple and limited functions provide CRM at affordable prices. Its operation is easy without involving expensive IT professionals. Therefore, to target good results emphasis should be on people and procedure strategies and in the end utilize software.

Wrong Assessment For The Return On Investment In CRM

In CRM implementation, Return on Investment means the evaluation of returns with the costs incurred. CRM is sometimes regarded as giving a poor ROI. In fact, the probability of poor ROI is more if CRM is not deployed and the opportunity is lost.

The main causes of poor ROI are ignoring people and procedure strategies, absence of quantified benchmarking to measure the results, lack of vision in strategic gain of opportunities etc. These are the points to ponder before implementing a CRM.

Who Is Responsible For CRM Implementation-The Marketing, Sales, Customer Service, or IT officials ?

It is not advisable to lay the responsibility on all. The result will be that none of them will feel responsible. The ultimate responsible person should be the CEO as he formulates and manages the business strategies. In order to have a better success index, the CEO and his immediate deputy should be educated and trained for implementation of CRM.

A better understanding of different dimensions of CRM therefore is a must to potentially enhance the benefits of CRM implementation.

The Benefits of CRM Solutions

There are many benefits of CRM or Customer Relationship Management software. Let’s discuss one by one in detail.

Better Customer Service

There are various functions of the CRM software, but the main function for which it is created is to improve business customer relationship. All the information of your customer is stored at one place, which makes CRM software most power tool.

The type of Information stored are like contact’s full name, email address, telephone number, postal address, website and social media accounts.CRM also helps to save all the activities, projects, sales, live chat messages, email exchanges, etc. CRM allows you to know your customer better.

Better Customer Segmentation

Every business wants to deal with the perfect audience. List of the contact may be enormous and large. It makes it difficult for the employee to decide whom to contact on the basis of criteria.CRM system helps you know better who is really interested in what you have to offer, who is still sitting on the fence, and who is cold as ice.

Increased Sales

In order to streamline your sales process CRM will provide your sales team with one place where they can track leads, prospects, and customers over any duration of time, automate key tasks and analyze all of your sales data, potentially increasing sales and productivity in one centralized place.

A CRM helps you establish a step–by–step sales process that your employees can rely on every time and that you can easily tweak as issues arise. Sales managers can then use this data to identify patterns and see which sales processes are working for their team and which ones could be improved. This is how your sales team can use information stored in the CRM to scale your processes as your business grows.

Improved Customer Retention

CRM plays a very important role to keep your customer happy. CRM will help you to keep the promises by reminding you about appointments or when to send follow up emails. It also helps you to reach those customers who have been neglected or not contacted for a long time.

The CRM will provide sentiment analysis, automated ticketing, customer support automation and user behavior tracking to help you determine problems and quickly address them with your customers.

Better and Speedier Communication

Without wasting time of the customer and giving them a prompt reply is the sign of the professionalism. CRM helps to save your time and your customer time, as it offer customizable ready to use various types of templates like letters, documents, proposals, quotes, etc.

A CRM automatically manages the process, sending your employees alerts when they should reach out to the prospect and tracking every interaction, from emails to phone calls.

Better Anticipation of Needs

CRM system helps salespeople to sell more and sell faster, because they have access to history (buying habits) of the entire customer journey which allows them to anticipate customer needs. If you know the buying habits like what they bought, what contracts they were offered, you can be more proactive and come up with new or better offers at the right time.

Just with a few clicks and you would know whether a contact had any problems with your product, how their service requests were handled, and whether they were satisfied or not. And if they had past complains – it’s your chance to redeem your reputation and offer a much better customer experience.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.