CRM TYPES

Types of CRM

When it comes to application of CRM, three broad classifications are possible. They are:

• Operational CRM
• Analytical CRM
• Collaborative CRM

Operational CRM :

·         The operational application of CRM enables effective interaction with customers. For this purpose various tools are used. These contact management tools aim to reduce costs by improved process efficiency and use of media based communication channels. These are also aimed to provide customers with a consistent interface across all communication channels. To achieve this relevant customer data is collected and also displayed at all customer touch points. This is the customer master data. Another set of data where employees' contact with customers is also logged. This has information like topics discussed, customer requirements, soft customer data like hobbies, preferences, interests, details about children and other minor stuffs.

·         Banks are an exemplary implementation of CRM as customer contact management. Channel management tools aim to understand how customer interacts with the company. It aims to deliver products and services across multiple channels in effective, efficient, and consistent manner. Content management tools enable the company to manage what is visible to the customers i.e. what the customers are able to see when they interact with the company. The various processes undertaken are: campaign management, sales management, service management, and complaint management.

Analytical CRM:

The data collected in operational management is analyzed to segment customers. The valuable information thus obtained is used to satisfy customers. Analytical CRM is composed of:

1. Pattern discovery component
2. Product and customer analysis component
3. Multitude component
4. Sorting and customer fractionation component
5. Customer value evaluation component

Analytical solutions provided for most companies are integrated view of customer across all channels and applications, campaign performance analysis, customer profitability analysis, cross-selling and up selling. The analytical solutions help answer questions like:

1. Who are their best customers?
2. Whom they are likely to loose?
3. How to retain them?
4. How to attract new customers?
5. How to improve profitability of customers?

Examples are data warehousing, online analytical processing (OLAP), and data mining systems.

Note : Concept of customer segmentation : the value of customer is judged based on RFM analysis i.e. focusing on Recency, Frequency, and Monetary value from customer purchasing data in retail business. Accordingly the customers are divided into various levels. The four main segments of customers are:

• At the top is the VIP customer whose expenditure is most and form 1% of all customers in a certain period.
• Then the main customer forming 5%.
• Next the ordinary customer forming 20%.
• And at the bottom is the scattered customer an overwhelming 80%.

The first three categories create more than 80% of all profits for the company and as a result they are differentiated as the best customers. They are the real targets of Customer Centralization.

Collaborative CRM:

The various departments of company like the sales, technical support, and marketing, share the information they collect about customers. The objective is to improve the quality of customer service and increase customer loyalty.

It allows the company to synchronize and manage efficient, productive interaction with customers, prospects, partners, and internal associates across all communication channels. The customers' viewpoint is taken care of at every transaction level thus enabling better service to the customer. Collaborative CRM also reduces web service costs by enabling web collaboration.