The word “CRM” is in the light for quite a few years now. Companies across industries spend millions of dollars on their CRM system implementation. But is CRM a new concept or is it existing for years and just more organized version of the same old trick? Let’s take a closer look.
What are three essential components of CRM? First, capturing the customer data and transactions. You capture all possible data about the customer – starting from general information such as age, religion, name, gender, telephone numbers to preference of the customer such as his inclination towards a particular product category or brand segment or his interests in different areas. All transactions are captured because you want to keep a track of what the customer wanted, what is his need, how he reacted to your product or service, what can be done better to satisfy him etc. Second, you consolidate the data at one single place to complete the 360 degree view of the customer. You may interact with the same customer across multiple channels. But to appear as a single face, you must consolidate the data received through different channels at one database. Third, Analyze the data to find out the patterns, habits, likings, opportunities etc so that you can take informative decisions on basis of that………………
Plenty of technologies are available in the market which can help you in building the three components described above. But this has always existed without the help of technology, though in a much lower scale.
Think about the mom-and-pop stores that existed in your locality when you were a school kid. The person sitting there knew which school you read in, your name, your buying habit, your friends network who go to the same shop and also your parents. Relate this with the first component of CRM. He captures the data of personal preferences and few transactional details. Surely he does not write it on a piece of paper, but remembers all such key information which are required – may not be from a strategy building perspective, but the bottom line is – information capture and profiling, consciously or subconsciously always existed.
The second part is consolidation of information. It might not be that relevant in this example as the interaction channel is single – your direct interaction with the shopkeeper. However, if your parents go the same shop for buying few things, some words are exchanged about you as well. All these information are consolidated – not in a database, but in the mind of the shopkeeper.
The third part is analysis and taking informative decisions. It was there and will be there. He knows your buying habit more than your parents. So, sometimes when your parents go to buy something for you, he suggests “your son prefers this. Even last week he took one”. Will the parents start arguing that time? Probably no. The other situation is when he cross sells on basis of the same information. “This is a new product that has come to market. Your son prefers chocolate flavor. Intensity of chocolate flavor in this is higher than that in other products. Your son will like it”. The product sells and he sells what he wants to sell.
As the scale expands, we cannot expect the shopkeeper to retain all info about all customers. Shoppers Stop or Manor cannot appoint people for remembering the data. But that’s why we have the system – it does the job for you – easily and efficiently.
CRM is not a new concept at all. It has been tried for years and will be tried for coming many years. We all have been part of or subjected to CRM – some way or the other. With the advent of technology, CRM will evolve and be more sophisticated. For sure, it will. But the basic concept will remain the same. And I am sure it should flourish more – else CRM consultants like me will have to look for something new.