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An Executive's Guide to CRM Software

An Introduction to CRM


The Acronym CRM is a contraction for the term Client (or Customer) Relationship Management.

Three simple words made nebulous and contrary by different organizations, expert pundits, and the media. In today’s business environment, CRM relates to the management of the interactions between an entity and its clients. The underlying implication is that the entity controls and manages each aspect of the association with its clients.

It is helpful to analyze the past meaning and assumptions regarding CRM and CRM’s present day purpose and value. The term's past refers to CRM prior to the advent of widespread Internet adoption, which dates to sometime in the mid 1980’s, and present day CRM from the post mid-eighties to the current day.

Past or present, the three letters, CRM, encompass the three aspects of managing a client; recruiting the client or Marketing, Selling to the client or Sales, and nurturing and retaining the client, via Support or Service.

Although it can first appear a bit of an oxymoron, the most exemplary scenarios of excellence in CRM prior to the adoption of the Internet are often in the Not for Profit (NFP) sector. At this point, every single Vice President in the consumer or capital sector is snorting in disbelief.

Think about it. 

Not for Profit entities compete not only with every single consumer-oriented business for the same disposable income, but with every other NFP. The principal difference between the Not for Profit and the For Profit sectors is that NFP entities concentrate on CRM from their very inception. A hospital foundation, for example, cannot execute its duties without donors. A museum cannot be built without patrons. A Performing Arts Center cannot produce entertainment without benefactors.

An NFP relies on non-materialistic funding for its existence to be realized and for its continued existence. Profit plays no part in the equation.

A consumer business can be founded on vision, belief, and progress. The Golf Channel is a perfect example of all three. Without the advent of Cable TV, there would be no Golf Channel. Without the vision of the founder, Joseph E. Gibbs, and the belief of supporters, such as Arnold Palmer, it would never have hit the airwaves. This entrepreneurial entity required a significant capital investment to exist and raised it via venture seeding. Materialistic funding underscores the realization of a capitalistic organization, but its continuity requires profit.

Contrast this to a foundation, such as, the American Lebanese Syrian Associated Charities (ALSAC). This organization supports the St. Jude’s Children Research Hospital, which came into being as a direct response to the needs of a specific community - children with cancer. For St. Jude’s to continue to operate and grow, it relies on funding. Existing donors fund the current functions of the hospital, and new donors underlie the expansion of the hospital’s services and patient depth and breadth. Donors, in the presence or absence of surplus funds, provide the means for the continuity of St. Jude’s Children Research Hospital.

NFPs have managed the relationships of their clients, patients, and donors, remarkably well for centuries. Their very existence depends upon this crucial interaction, and they have honed these skills over the years. Almost every single NFP has at its core, a department dedicated to developing, maintaining, and expanding the interaction between its donors and the foundation.

Contrast this to the emergence of formal Client Relationship Management departments and concentration on the CRM functions within the past few decades in consumer oriented companies. Who ever heard of the term CRM prior to the 1970’s?

Today, CRM is the business buzzword of the new millennium. But make no mistake, this buzzword has strategic implication and staying power.

Consumer industries have finally cottoned on to the fact it costs much more to attract a new client than to retain an existing one. Not that this was an unknown factor before today, but it has taken on a new emphasis with the advent of the technological development of the Internet, the emerging Global Market Place, and diminishing opportunities, or plain old capitalism. In other words, businesses worldwide are all contending for the same client pool, and the single most important competitive tool any capitalistic entity can utilize is CRM.

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