CRM
Other Types of Customer Relationship Management System
Graphics courtesy of Spencer CooperOpens in new window
Haven previously examined operational and analytical CRM systems, the focus shifts to other types of CRM systems. Three exciting developments in this area are:
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On-Demand CRM Systems
Customer relationship management systems may be implemented as either on-premise or on-demand. Traditionally, organizations used on-premise CRM systems, meaning that they purchased the systems from a vendor and then installed them on site.
This arrangement was expensive, time consuming, and inflexible. Some organizations, particularly smaller ones, could not justify the cost of these systems.
On-demand CRM systems became a solution for the drawbacks of on-premise CRM systems.
An on-demand system is one that is hosted by an external vendor in the vendor’s data centre. This arrangement spares the organization the costs associated with purchasing the system.
And because the vendor creates and maintains the system, the organization’s employees need to know only how to access and use it. The concept of on-demand is also known as utility computing or software-as-a-service.
Despite their benefits, on demand CRM systems have potential problems. First, the vendor could prove to be unreliable or go out of business, in which case the company would have no CRM functionality at all.
Second, hosted software is difficult or impossible to modify, and only the vendor can upgrade it. Third, vendor-hosted CRM software may be difficult to integrate with the organization’s existing software. Finally, giving strategic customer data to vendors always carries risks.
Salesforce is the best-known on-demand CRM vendor. The goal of SalesforceOpens in new window is to provide a new business model that allows companies to rent the CRM software instead of buying it.
The secret to Salesforce’s success appears to be that CRM has common requirements across many customers.
One Salesforce customer is Häagen-Dazs ShoppeOpens in new window. Häagen-Dazs estimated that it would have had to spend $65,000 for a custom-designed database to remain in close contact with its retail franchises. Rather than spend this amount, the company spent an initial $20,000 to establish service with Salesforce. It now pays $125 per month for 20 users to remotely monitor, via the web or a smart phone, all the Häagen-Dazs franchises across the United States.
Other vendors also offer on-demand CRM software. Example X-1 demonstrates the advantages that McKesson CorporationOpens in new window gained from deploying Oracle’s CRM On Demand application.
| Example X-1 |
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The McKesson CorporationOpens in new window specializes in the distribution of branded, generic, and over-the-counter pharmaceuticals and products.
McKessonOpens in new window wanted a CRM system that would enable it to perform the following functions:
In addition, the system had to be easy to use. McKesson ultimately implemented Oracle’s CRM On Demand application to standardize the sales and marketing systems across all of its product lines. The new system enabled the company to consolidate reporting across product lines, and it provided the necessary flexibility to accommodate multiple sales processes. Further, it allowed the organization to monitor and track issues that arose in the resolution process. In essence, Oracle’s CRM On Demand application provided McKesson with a 360-degree view of customer account information across the entire organization, which has proved to be very useful. In addition, McKesson was able to deploy the system in less than 90 days. |
Mobile CRM Systems
,A mobile CRM system is an interactive system that enables an organization to conduct communications related to sales, marketing, and customer service activities through a mobile medium for the purpose of building and maintaining relationships with its customers.
Simply put, mobile CRM systems involve interacting directly with consumers through portable devices such as smart phones.
Many forward-thinking companies believe that mobile CRM systems have tremendous potential to create personalized customer relationships that may be accessed anywhere and at any time.
In fact, the potential opportunities provided through mobile marketing appear so rich that many companies already have identified mobile CRM systems as a cornerstone of their future marketing activities. Example X-2 shows how retailer Harry Rosen implemented CRM.
| Example X-2 |
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| Harry Rosen Inc.Opens in new window is a Canadian retail chain store that sells high-end men’s clothing in 15 stores across the country, with more than 700 sales associates. Since its beginnings 60 years ago, Harry RosenOpens in new window has been committed to providing excellent customer service. In order to do so, the company relies on a one-on-one sales approach where customers are encouraged to book an appointment with a sales associate who will help them make purchasing decisions, for both off-the-track and custom-tailored garments. Once the appointment is scheduled, the sales associate prepares for the meeting by consulting any customer information that they already collected such as the customer’s body measurements and purchase history. However, this system suffered from a number of problems. For example, sometimes during the appointment with the customer, the sales associate would have to leave the customer to access the information on a workstation at the other end of the store. Also, sales associates were not able to help customers by locating merchandise in another store, showing them what other patterns or fabrics were available to order, or letting them know when particular merchandise would be available in the store. In addition, the system would not work with customers who did not make an appointment. It was clear that for top-notch customer service, some changes needed to be made, starting with sales associates being able to access real-time information from other stores as well as a new way to assist customers who did not make an appointment. Harry RosenOpens in new window realized that customer relationship management software could help solve some of its problems. After researching several options, the company selected the SalesLogix CRM system. The system combined applications for web deployment, mobile devices, and system integration capabilities. The company acquired new mobile devices and launched a customized application on pocket PCs to provide sales associates with quick access to customer data and product preferences, such as how often a customer shops, average purchase price, and brands most often purchased. The devices also allow them to look up inventory across the company’s locations in real time, know when a new shipment of merchandise will arrive, and schedule tasks such as suit tailoring — all while still on the sales floor. |
Open-Source CRM Systems
The source code for open-source software is available at no cost.
Open-source CRM systems, therefore, are CRM systems whose source code is available to developers and users.
Open-source CRM systems provide the same features or functions as other CRM software, and they may be implemented either on-premise or on-demand. Leading open-source CRM vendors include SugarCRMOpens in new window, ConcursiveOpens in new window, and vtigerOpens in new window.
The benefits of open-source CRM systems include favorable pricing and a wide variety of applications. In addition, these systems are easy to customize. This is an attractive feature for organizations that need CRM software designed for their specific needs. Finally, updates and bug (software error) fixes for open-source CRM systems are rapidly distributed, and extensive support information is available free of charge.
Like all software, however, open-source CRM systems have certain risks. The most serious risk involves quality control. Because open-source CRM systems are created by a large community of unpaid developers, there sometimes is no central authority responsible for overseeing the quality of the product.
Further, for best results, companies must have the same information technology platform in place as that on which the open-source CRM system was developed.
See Also:
- Gamble, P., Stone, M. and Woodcock, N. (1999). Customer relationship marketing: up close and personal. London: Kogan Page; Jain, S. C. (2005). CRM shifts the paradigm. Journal of Strategic Marketing, 13 (December), 275 – 91.
- Evans, M., O’Malley, L. and Patterson, M. (2004). Exploring direct and customer relationship marketing. London: Thomson.
- Kotler, P. (2000), Marketing management: the millennium edition, Englewood Cliffs, NJ: Prentice-Hall International.
- Engle, R.L. and Barnes, M.L. (2000). Sales force automation usage, effectiveness, and cost-benefit in Germany, England and the United States. Journal of Business and Industrial Marketing, 15(4), 216 – 42.
- Buttle, F. (2004). Customer relationship management: concepts and tools. Oxford: Elsevier Butterworth-Heinemann.
- Payne, A. and Frow, P. (2013). Strategic customer management: integrating CRM and relationship marketing. Cambridge: Cambridge University Press, P. 211. See also Payne, A. (2005). Handbook of CRM: achieving excellence through customer management. Oxford: Elsevier Butterworth-Heinemann; Payne, A. and Frow, P. (2005). A strategic framework for customer relationship management. Journal of Marketing, 69 (October), 167 – 76.
