Customer relationship management (CRM). A dynamic business strategy designed to reduce costs and increase profitability by encouraging customer loyalty. After all, its cheaper to retain current customers than to acquire new ones. And the latest CRM software applications are designed to help companies seamlessly manage each step in the process.

What Is Small Business CRM?
Small business CRM is a customer-centric philosophy designed to learn more about customers needs and behaviors to help cultivate stronger relationships. CRM combines information from all internal and external data sources to give one, holistic view of each customer in real time. The result is an improved ability of sales, customer support, and marketing departments to make quick yet informed decisions on everything from cross-selling and up-selling opportunities to target marketing strategies and competitive positioning tactics.

According to ComputerWorld, there are three distinct areas of small business CRM that every company should consider:

• Sales force automation. Includes such components as field sales, call center telephone sales, third-party agents, retail and e-commerce, which is sometimes referred to as technology-enabled selling.
• Customer service/call center management. Includes field service and dispatch technicians, Internet-based service or self-service via a Web site, and call centers that handle all channels of customer contact.
• Marketing automation. Includes components such as data-cleansing tools, business intelligence tools, a data warehouse to support strategic decisions, content-management applications, and a campaign management system.

CRM Application Techniques
CRM is a complex process that, typically, should be incorporated in phases as opposed to one fail swoop. According to industry professionals, organizations looking to implement a new customer resource management system should consider each of the following application techniques:

• Developing a Customer Strategy. What makes customers buy repeatedly from a business that they can trust?
• Customer Lifecycle Management. Valuating the lifetime customer and creating processes for improving retention.
• CRM Flexibility. Using CRM software and other high-tech applications for smooth integration in multiple departments.
• Operational CRM. Aligning management and sales force team members with CRM goals and objectives.
• Analytical CRM. Tracking and reporting results in real time. Using data to guide future processes and action strategies.
• Collaborative CRM. Incorporating customer and call center strategies into the CRM lifecycle.
• CRM Project Management. Identifying opportunities for recruiting and retention.

Defining CRM Systems: Hosted vs. On-Premises
Like most businesses, CRM systems come in a variety of shapes and sizes. Selecting the right CRM software package depends largely on the current and future wants and needs of the business in question. For example, small- and medium-sized businesses (SMBs) may benefit the most from a hosted CRM solution. With a hosted system, an external CRM vendor stores and manages a companys customer data via the Web. Here the company has access to the information 24/7, and doesnt have to worry about maintaining expensive equipment on-site.

For larger businesses that have more resources than SMBs, however, an on-premises solution may be a better option. Although on-premises CRM requires a company to manage its own hardware and software, it has complete control, and can customize its system to align with specific customer/client goals.

CRM in Perspective
Regardless of company size, shape, or strength, CRM software has become an excellent tool for maximizing the collection, management, and sharing of customer data. In turn, this increased efficiency has helped companies better understand that data, and use it to elevate customer service, boost sales, and increase the all-important bottom line.

Sources
Certified e-Business Professional
ComputerWorld
Customer Resource Management Association