Misunderstandings about Customer Relationship Management (CRM)

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

  1. Identifying CRM with a software system- CRM is a business strategy which consists of people and business processes in addition to technological implementations. A successful implementation of CRM is not possible without each one of them. 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. Then only it can deliver customer and company value. Therefore the right implementation sequence has to be followed and it must include proper competencies and people’s attitudes, the right business strategies and then the right IT implementation.
  2. 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 recent 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 go back to the times when there was no IT implementation, still customer relationships were being managed then by keeping in mind a customer database. Now, in the present times technology is more advanced and the quality of customer management have been 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.
  3. 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 have been introduced to 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 utilize software at the end part only.
  4. 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? It is the wrong way to think so. In fact the probability of poor ROI is more if CRM is not deployed and the opportunity costs are more. 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 acquirement of opportunities etc. These are the points to ponder before implementing a CRM.
  5. Who is responsible for CRM implementation - The Marketing, Sales, Customer Service, or IT officials?- It is not at all advisable to lay the responsibility on all of them individually. The result will be that none of them will feel his responsibility. The responsible person should be the CEO who is the leader of the enterprise and it is he who formulates and manages the business strategies. Why the other person should be pressurized? In order to have a better success index, the CEO and his immediate deputy should be well educated and trained for a better implementation of CRM.

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


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Customer Relationship Management