Customer Relations Management

The Basics of Customer Relations Management

Every company has cliental so, at a minimum, they should maintain basic information about their customers such as a name, an address and all past purchases. So basically, every company has already created a basic CRM database to better understand and serve their customers.

This paper will first identify the concept of the CRM concept; find comparative advantages for CRM in-house and outsourcing functions; and will spotlight a company and how they effectively use CRM techniques to meet operational requirements.

CRM Concept

Whether it’s sales, customer service or just gathering statistical data; CRM covers all interactions between a company and its customers. Emerging technology and the ease of self-service has changed the methods in which companies employ CRM strategies but the concepts still remains the same; knowing what the customer wants and what their habits are going to be. “Organizations are therefore looking for ways to personalize online experiences (a process also referred to as mass customization) through tools such as help-desk software, e-mail organizers and Web development apps.” [1]

“CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers.” [2]

In-House and Outsourcing CRM - Comparative Advantages

Even though each CRM method (in-house and outsourcing) can function independently and provide a different management strategy to better understand clientele, they often share similarities and/or advantages. Table 1 below illustrates the comparative advantages associated between in-house and outsourced CRM methods.

• Provide better customer service • Improved Responsiveness to gain Loyalty

• Ability to personalize relationships • Cross sell/Up Sell products more effectively

• Make call centers more efficient • Simplify marketing and sales processes

• Help sales staff close deals faster • Increase Customer Revenues

Table 1. Common advantages amongst in-house and outsources CRM [3]

Spotlighting a Company – Southwest Airlines

Great Customer Relation Management is knowing what it takes to please the consumer; so it came as no surprise to learn that Southwest Airlines leads the airline industry in Customer satisfaction (Diagram 1). I could not discover which method of CRM Southwest employs but they’re one of the best by offering low fares, great customer service, and employees who genuinely care about their clients.

Diagram 1 – Raw Satisfaction Scores [4]

“While a number of airlines may attempt to imitate Southwest, none of them can duplicate the spirit, unity, can do attitudes, and marvelous esprit de corps of the Southwest Employees, who continually provide superb Customer Service to each other and to the travelling public.” [7]

Through the implementation of a successful CRM program, Southwest Airlines, along with other US airliners, places emphasis on seven main areas (Diagram 2).

Diagram 2 - Satisfier/Dissatisfied Profile [5]

Southwest prides themselves in providing high quality aircraft; in-flight service; on time performance; and baggage handling to please its customers. Since the implementation of their CRM program they have consistently scored high on the Air Travel Consumer Report [6] (except for recently due to FAA halting flights to ensure airplanes received scheduled quality checks).

Once Southwest earned the customer’s trust they were able