The two most commonly used terms in the customer management parlance are CS and CRM. Both form hot topics of study for management students (MBA / Online MBA). The term customer service (CS) could be over a century old (Hint: A 1890 quote on CS attributed to Gandhiji); whereas CRM or Customer Relationship Management is relatively new (believed to have been coined in 1980). Though used interchangeably, CS and CRM are two distinct approaches.
The two most commonly used terms in the customer management parlance are CS and CRM. The term customer service (CS) could be over a century old (Hint: A 1890 quote on CS attributed to Gandhiji); whereas CRM or Customer Relationship Management is relatively new (believed to have been coined in 1980). Though used interchangeably, CS and CRM are two distinct approaches.
Why CRM Matters
Market landscapes are constantly evolving, and so too are customers’ needs and demands. Modern customers act, react and respond in most unpredictable ways. Their aspirations transcend the limits. This calls for proactive and precise means with speed to deliver customer satisfaction. CRM technology tries to achieve this. Though CRM inputs the customer care angle, it looks beyond that and eyes towards profitability.
Integrative Approach
Simply put CRM digitally records every business interaction with the customers. The data also captures fields like contact and purchase history. This database provides functionality to segments like sales, marketing, customer service and the like. For e.g. sales team can identify potential customers, the marketing team can launch targeted marketing campaigns or the digital marketing team can decide on the right channel mix.
CS & CRM
CS is often described as a subset of CRM. Though CRM’s goal is revenue generation, the route is customer relations. Customer relation is achieved through customer service. The service is not all about complaint redressal but includes certain goodwill gestures (e.g. Health advisory – A TATA 1mg (health care platform) post reads, “Are the daily stressors affecting your mental health? Don’t delay, address it immediately.”) The company engages the customer using health concerns and provides information about health issues whereas, in effect, it is using this to promote products (expert consultation and sale of medicines) behind-the-scene. There are other areas too, where CS & CRM collaborate:
Seamless data flow: CRM helps personalized and proactive service (e.g. if a customer calls the service desk, CRM data helps the CS personal with necessary inputs)
Coherent customer experience: CRM facilitates a consistent and continuous engagement with the customer (e.g. reminder on a scheduled service by automobile service centres)
New Product Updates: Based on past customer interactions, companies can offer product updates to the customer (e.g. communication about new arrivals of a particular category by cloth stores)
Proactive Engagement: CRM data helps to proactively address potential issues (E.g. Online grocery stores alert customers about the arrival of stock of an item which was not available at the time of placing the order)
Characteristics
- CRM activity is ongoing, covering perhaps the entire customer lifecycle (you have an option of unsubscribing if needed) E.g. Kalyan Jewellery sends periodic tips on the home care of old jewellery. Though this does not prompt an immediate purchase, the engagement lasts.
- CRM focuses on overall customer engagement with a view to improve sales: Indigo sends e mail to customers highlighting “This is where you should travel next based on your zodiac sign” A novel concept to gain engagement; can drive sales as well.
- CRM provides metrics like sales revenue, conversion rates and customer acquisition costs which are vital for arriving at profitability.
Social CRM
Modern customers opt for social media channels to communicate with the brands due to convenience (No more phone number/e-mail search) and impact (wider, precision reach). Social CRM ties together all the social channels (X, Facebook, Instagram etc.) with CRM so that their interactions on any of these channels are integrated in one place. The advantage of social CRM includes: –
- Achieves conversation history & direct messages. Customers need not repeat the details all the time.
- Enables marketing to create precise personas for targeted campaigns.
- Social CRM enables relevant pop-ups when the customers hang out online.
Frequently Asked Questions:
1. Why is CRM important in today’s market?
Ans: CRM is crucial because it helps businesses keep pace with rapidly changing customer needs and expectations. It allows companies to record and analyse customer interactions, personalize services, and make data-driven decisions that enhance customer satisfaction and loyalty while also focusing on profitability.
2. How does studying CRM in an Online MBA benefit career prospects?
Ans: Studying CRM in an Online MBA equips students with in-demand skills for managing customer relationships in a digital-first world. It prepares graduates for roles in sales, marketing, and customer service management, where they can apply CRM strategies to improve customer satisfaction, increase profitability, and drive business growth. This knowledge is particularly valuable as companies increasingly prioritize customer-centric approaches to stand out in competitive markets.
3. Can CRM be used to improve marketing efforts?
Ans: Yes, CRM plays a significant role in enhancing marketing efforts. By leveraging customer data, businesses can create precise personas for targeted campaigns, decide on the most effective channels, and even develop personalized content that resonates with individual customers. Social CRM, in particular, helps in placing relevant pop-ups and advertisements based on customer behaviour on social media, making marketing more effective and engaging.