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What is Customer Relationship Management?

Malcolm Tatum
By
Updated: May 17, 2024

Customer relationship management has to do with any methods, policies, and procedures that are utilized by a company to provide a high level of customer care to existing clientele, orient new customers to the products and services offered by the business, and encourage general customer retention. Sometimes referred to as CRM, customer relationship management is a subject that is covered in a number of training manuals, inn house training, and continuing education seminars that are aimed at helping companies develop healthy relationships with the client base.

Generally, competent customer relationship management involves providing customer assistance on a variety of levels. These levels are usually classified into three main categories, usually referred to as operational, collaborative, and analytical. Companies of just about every size will incorporate elements of each classification into the business strategy, helping to ensure an ongoing rapport with the customer base.

The operational aspects of customer relationship management involve processes that provide for direct interaction between the client and a customer care specialist. Many of these processes are time honored methods, such as on site visits with the customer, contacts by telephone, and letters and other printed matter that is exchanged between the client and the customer support staff. Today, such vital means of communication as email, audio and video conferencing, and instant messaging also provide this direct link between customer and support specialist.

Collaborative methods of customer relationship management allow for direct contact between the client and the company, but do not include the presence of customer support staff. These methods may include automated online access of the customer to his or her account information, the ability to order new products of services online, and to submit changes to account information using automated tools provided by the vendor. Generally, these tools are available for use around the clock, making it possible for a customer to manage the relationship in his or her own time.

The analytical aspect of customer relationship management has to do with the systematic analysis of customer data. This is an internal process, and does not initially involve interaction with the customer. Instead, historical data on the purchasing patterns of the customer, including which goods or services are purchased and at what intervals, is used to determine if there is some sort of new product or service that the vendor can develop and offer to the customer. Analyzing past usage of the client base in general can also help the company develop new strategies to educate existing customers about other products that may be of interest, which can translate into additional ties of loyalty between supplier and customer.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including WiseGeek, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
By mdt — On Apr 21, 2008

CRM is utilized by many different types of companies, both large and small. The exact methods and devices employed will vary from one business environment to another. To get an idea of how a given company employs CRM, try looking for information on their customer service structure, or general customer care strategies.

Open source CRM is a term often associated with the use of software or automated processes to provide customer care. Again, companies of many different types and sizes will make use of this tool to keep customers happy.

By mmsudhikk — On Apr 21, 2008

Hi,

I am sudheer kumar, i am doing MBA. which type of companies using CRM, recently i listen about open source CRM, are any companies using these open source CRM?

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
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