Customer relationship management (CRM) is essentially a strategy to increase profit by augmenting customer loyalty. Collecting information from a variety of data sources can help provide a company with a fuller picture of its customers, and this information in turn influences the company's decisions on areas such as marketing, positioning and development. While CRM began primarily as a technological initiative, it has blossomed into a more encompassing philosophy. Unfortunately, CRM comes with some inherent disadvantages.
CRM requires additional work inputting data. This can bcomee menial and repetitive. Employees must input a large amount of data at the outset, and the database requires continual maintenance, which takes up company resources.
Difficult to Work With
Learning CRM requires training. Workers may complain about its complexity, and your company will have to use resources teaching workers how to use it.
Many CRM processes require human thought, not mechanised reaction. The dehumanisation of these processes can lower their effectiveness. While CRM can certainly prove useful, it still takes a human brain to create optimal website designs, analyse and apply the data, and build loyalty with the customer. Often, business managers who invest in CRM expect it to take care of their customers magically and dramatically increase their revenue, but it takes human resources to make CRM run effectively.
CRM can prove difficult to integrate with other systems. If a certain CRM system is not compatible with your other systems, such as your e-mail or accounting systems, your CRM system will not be effective.
Cost and Profit
CRM is not always profitable. The overhead needed for CRM can become extremely large, since you must pay for its set-up, maintenance and, often, server. CRM has a different value for each business; the assumptions underlying CRM systems may not apply to all businesses. For example, some businesses may not profit from having more loyal customers but rather from having a larger volume of customers.
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