Monday , October 3 2022

Equal parts strategy and technology, customer relationship management ( is about using data to understand your customers—and boost sales.

What is Software for managing customer data is an abbreviation for customer relationship management, a method for managing a company’s interaction with current and potential customers, and storing and analyzing data about past interactions. Management consulting company Bain defines as “a process companies use to understand their customer groups and respond quickly—and at times, instantly—to shifting customer desires.” But can mean both the process and philosophy for meeting those goals, and the technology used to implement that process.

According to Salesforce, the leading provider (and more on them in a moment), software grew out of the contact management software of the 1980s, which in turn was meant to provide a digital version of the rolodexes that were so important to sales professionals. At first, software lived on individual PCs; later, it migrated to servers where it could provide services to an entire organization, at which point people started using the phrase system,reflecting the fact that it spanned across an enterprise’s infrastructure.

One of the most important things to keep in mind about a system is that it is ultimately less important than the data you put into it. That’s one reason to think of as a philosophy and set of practices for recording data about customer interactions, not just a software package you buy.

Customer relationship management is a strategic process that helps you better understand your customers’ needs and how to meet those needs and enhance your bottom line. systems link up information about customers from a variety of sources, including email, websites, physical stores, call centers, mobile sales, and marketing and advertising efforts. data flows between operational systems (like sales and inventory systems) and analytical systems that sort through data for patterns.

If you don’t have an accurate view of who your customers are and what their needs or desires are or will be at any given stage in their lives, or if you are losing customers to a competitor, that’s a clear indication that you need a system.

There are many technological components to systems, but thinking about in primarily technological terms is a mistake. Instead, should be viewed as a strategic process to better understand and meet your customers’ needs. A successful strategy depends on bringing together lots of pieces of information about customers and market trends so you can more effectively market and sell your products and services.

With an effective strategy, a business can increase revenues by:

These revenue gains don’t happen by simply buying software and installing it. For to be truly effective, an organization must first understand who its customers are, their value, their needs, and how best to meet those needs. For example, many financial institutions keep track of customers’ life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time.

Next, the organization must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used. One company, for instance, may interact with customers in a number of ways, including email campaigns, web sites, brick-and-mortar stores, call centers, mobile sales force staff and marketing and advertising efforts. systems link up each of these points. This collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed. For example, if someone has a mortgage, a business loan, an IRA and a large commercial checking account with one bank, it behooves the bank to treat this person well each time it has any contact with him or her.

Before we move further, we need to clarify the difference between and a couple of other terms you might have heard thrown around in this space: marketing automation and ERP. While there is some conceptual overlap — all three involve storing, analyzing, and making use of customer data to improve business processes — the three actually occupy distinct niches, and learning what those are helps clarify what each tool does:

These three tools can work in sequence — the output of the marketing automation process goes into, and info on completed sales should go into ERP — but each of them represents a distinct domain, and truly the only people who should have login privileges on all three systems are your IT staff. (Read more about the distinction between and marketing automation and and ERP.)

One of the reasons that, ERP, and marketing automation aren’t as distinct as they should be in the popular mind is that Salesforce, the giant in the field, is also trying to work its way into the ERP and marketing automation spaces as well. With 26 percent of the market, Salesforce has a massive lead over its competitors in; other big names in this space include Oracle, SAP, Adobe, and Microsoft.

Beyond the brand names, there are two main types of on-premises, which means the software is installed on a server under the customer’s control, and cloud or on-demand, which runs on the vendor’s cloud infrastructure and follows a more metered or pay-as-you go approach.

The market for on-demand has soared, particularly among small and mid-sized companies, largely because of fears about the expense and complexity of large-scale on-premises implementations. And indeed, on-demand is often a good choice for companies that want to implement standard processes, are able to use out-of-the-box data structures with little or no internal IT support, and don’t require complex or real-time integration with back office systems.

However, on-demand software is not always as simple as the vendors would have you believe. For instance, customization can be problematic and hosted vendors’ API tools cannot provide the degree of integration that is possible with on-site applications. Getting a hosted system working shouldn’t take as long as a traditional software package, but larger and more complex rollouts can still take a year or more. And while the hosted option reduces the need for in-house technical support, upgrades can still sometimes be technically tricky. In addition, some companies with particularly sensitive customer data, such as those in financial services and health care, may not want to relinquish control of their data to a hosted third party for security reasons.

A hosted system will cost in the ballpark of $50 to $100 per user a month. If you want more sophisticated functionality and a greater level of support, you pay a lot more. An enterprise on-premises package can cost anywhere between several thousand to several millions of dollars, depending again on how many functions you purchase and how many computers or “seats” have access to the software. For instance, one company or department might purchase an email marketing management application or a salesforce automation application, while a larger firm might want to purchase an integrated package that includes a database as well as applications for marketing, sales and customer service and support (via call centers and online). Obviously, the integrated software package is much more expensive.

Those costs, even the hosted options, are well beyond the means of many small businesses. Fortunately, there’s a burgeoning niche of free options which, while less sophisticated, are usually more than adequate for the needs of a small or medium enterprise. Included in this category are open source offerings like Suite and Sugar (Read more about the pluses and minuses of seven free options.)

We’d love nothing more than to give you a one-sentence answer that IDs the top offering. Unfortunately, as is the usually the case for complex questions about important software tools, the answer is “it depends.” Or, as CIO writer Matt Kapko puts it, “The best customer relationship management software is the one that has the right capabilities and features for your objectives.” Kapko has a detailed lowdown what the key features to look for to match your needs are, and you should definitely follow him on this deep dive if you’re asking this question.

As we’ve noted, is as much a process and a state of mind as it is a software platform. That’s why the biggest returns come from aligning business, and IT strategies across all departments and not just leaving it for one group to run. The reason for this, as Moira Alexander writes, is that “in most companies, individual departments or teams believe they hold the key to understanding customer needs more than other areas of the business. But the reality is that different departments simply have a different view into customer expectations and none has an all-encompassing view.”

In fact, it’s best for the business departments who actually use the software to take ownership of the project, with IT and the CIO playing an important advisory role. rollouts are very complex and have a certain degree of notoriety as doomed to failure. From the beginning, lack of a communication between everyone in the customer relationship chain can lead to an incomplete picture of the customer. Poor communication can lead to technology being implemented without proper support or buy-in from users. For example, if the sales force isn’t completely sold on the system’s benefits, they may not input the kind of demographic data that is essential to the program’s success. One Fortune 500 company is on its fourth try at a implementation, because it did not do a good job at getting buy-in from its sale force beforehand and then training sales staff once the software was available. (Read moreon what to do if your project crashes and burns.)

The final thing you need to keep in mind when managing your project is that you need to eliminate data silos to succeed. Users need access to data beyond what they themselves enter into the system. That means integration — across users and across departments — and integration projects are always difficult. But trust us: the payoff is worth it.

Ready to see some examples of in action? Check out this post from the Teamleader blog. They’ve got some great detailed stories on how real-world companies are deploying to boost their bottom lines.

This story, “What is Software for managing customer data” was originally published by



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