CRM and Information Technology
As we have discussed, CRM is more than just software. For the purposes of this introduction – Information Technology (IT) and CRM have three key elements, namely Customer Touch Points, Applications, and Data Stores. This section is based loosely upon Raisch (2001) The eMarketplace.
*Data Mining is where an organisation evaluates large Data Stores for patterns, or relationships between groups or individuals (or segments). Applications present ‘patterns’ in a format that can be used for marketing decision-making.
** Permission Marketing is where a customer elects to accept (or ‘opt-in’ to) marketing material from an organisation e.g. where you buy insurance and the vendor asks if you wish to receive further details from them, or similar organisations. It is so called because marketers need your ‘permission’ to market to you. Permission marketing can occur at any of the Customer Touch Points.
CRM is a term that is often referred to in marketing. However, there is no complete agreement upon a single definition. This is because CRM can be considered from a number of perspectives. In summary, the three perspectives are:
- Information Technology (IT) perspective
- The Customer Life Cycle (CLC) perspective
- Business Strategy perspective
Our model is a hybrid of many other commonly cited models from a number of sources. If you are undertaking higher-level academic work you need to clarify with your tutor, the nature of his or her preferred model.
Customer Touch Points are vital since your business has a marketing orientation and focuses upon the customer and his or her current and future needs. This is the interface between your organisation and its customers. For example you buy a new car from a dealership, and you enter a showroom.
The dealership is a contact point. You meet with a salesperson whom demonstrates the car. The salesperson is a contact point. You go home and look at the car manufacturer’s website, and then send the company an e-mail. Both are contact points. Other contact points include 3G telephone, video conferencing, Interactive TV, telephone, and letters.
Applications are essentially the software and programmes that support the process. Incidentally, this is what some would call CRM – but we know better. Applications serve Marketing (e.g. data mining software* and permission marketing**), Sales (e.g. monitoring Customer Touch Points), and Service (e.g. customer care).
Data Stores contain data on every aspect of the customer, and the Customer Life Cycle (CLC). For example, an organisation keeps data on the products you buy, when you buy them, and where they are sent. Data is also kept on the web pages that you visit and the products that you consider, but then do not buy. Leads are stored here. Data on the life time value of individual customers is stored here, as well as details of how and when the customer was recruited, how – and for how long – individuals have been retained, and details of any products that have been extended to individuals are also stored. The data is analysed using Applications.