Customer Relationship Management (CRM): Misconceptions Report

This report delves into the concept of Customer Relationship Management (CRM), highlighting its significance as a strategy for enhancing customer satisfaction, marketing, and sales objectives. It identifies and clarifies various misconceptions associated with CRM, such as its perception as merely a database marketing tool or a loyalty program enabler, and the misunderstanding regarding the degree of automation it offers. The report emphasizes the importance of understanding CRM as a comprehensive strategy that integrates technology, processes, and qualified personnel to streamline business operations and improve profitability. It underscores the need for a clear understanding of CRM's functions and objectives, advocating for a strategic approach that aligns with business, customer service, and operational goals. The analysis emphasizes the necessity of pre-execution analysis and the involvement of both managers and users in the implementation process to ensure effective integration of CRM with business functions. The report concludes by emphasizing the importance of discerning CRM as an effective strategy rather than solely an IT application, advocating for a holistic approach to its implementation to ensure that the business organizations gain maximum benefit.

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Misconception Check

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Executive Summary
Customer Relationship Management or CRM is identified as a potential strategy that is
undertaken by firms for meeting the customer satisfaction, marketing and sales objectives. The
implementation of the right type of CRM strategy thus stands as a prerequisite for firms in that
the same contributes in enhancing the profitability and marketability potential of the company.
The report herein highlights on the different misconceptions associated with the CRM concept
that are needed to be discerned and clarified for helping in enhancing the usability of the CRM
system in the organisations.

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Table of Contents
Introduction......................................................................................................................................4
Concept of CRM..............................................................................................................................4
Misunderstandings associated to CRM...........................................................................................5
Conclusions......................................................................................................................................7
References........................................................................................................................................8

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Introduction
The paper focuses on reflecting on the concept of CRM while also aims in identifying
misunderstandings or misconceptions associated with the concept. The paper aims on detailing
facts associated with the different misconceptions regarding the CRM concept for making the
argument persuasive in nature. Considerable amount of secondary research is taken to be carried
out for detailing facts regarding the existence of misconceptions associated to CRM such that the
same helps in taking of quality decisions.
Concept of CRM
Customer Relationship Management commonly known as CRM is identified as an effective
strategy that is undertaken by firms for both managing and also in sustaining the relationship of
the institution with a potential stakeholder group, the customers. Employability of a CRM system
within the business institution ideally helps the firm in sustaining its connection with effective
customer groups and thereby contributes in streamlining the business and operational processes
of the firm for meeting the objectives of customer satisfaction and thereby enhances the
profitability potential of the company in the long run. A total CRM system encompasses
different sub-systems that contribute in serving the needs of contact management, sales
management functions, enhancing operational and business productivity amongst others (Tarla
2016).
The term CRM is coined mainly with three different aspects like technology, strategy and
process. The development of the cloud technological interface has revolutionised the use of
CRM in terms of recording, analysing and also in reporting of interactions carried out by the

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company with its customers. Further, CRM identified in terms of a strategy the tool is used by
the company for managing the relationships and interactions between existing and new
customers. Finally, in terms of a business process the CRM system the tool aims at both
nurturing and also in sustaining effective relationships between the company and its consumer
groups. Effective CRM Software not only entails significant information like contact numbers,
electronic mailing addresses, profiles of social media accounts and other such needed
information but also aims at synchronising its functions with that of the POS (Point-of-Sales)
terminals installed at different checking outlets in that the same helps in providing necessary
details about purchasing behaviour of consumers (Somani 2017).
Inferences gained from the CRM systems ideally help the sales and human resources team of the
company in tracking the progress and performances of the sales persons based on setting of
individual and group targets. The marketing unit of the firm focuses on using the inferences
gained from the CRM systems to design and execute marketing and promotional campaigns
based on the use of different types of media and also in carrying out of forecasting functions.
Again, CRM as a tool also contributes in tracking of consumer information regarding feedbacks
and suggestions rendered based on the use of diverse communication systems used in an
integrated fashion (Helgeson 2017).
Misunderstandings associated to CRM
Several misunderstandings or so-called misconceptions have adhered with the concept of
customer relationship management that needs to be clarified. CRM is often perceived as database
oriented marketing tool, a tool for development of loyalty program for the firm and solely as an

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application in the aspect of information technology. The above identified are some of the gross
misunderstandings that are increasingly associated with the concept of CRM.
In that, CRM is only identified as software the implementation of such in an organisation is
mainly carried out by the information technology department of the institution. The managers
because of their short-sightedness fail to understand the need for redesigning the culture of the
firm with also enhancing and streamlining the personnel and process based parameters for
helping in the effective implementation of the CRM system. Effective implementation of the
CRM process becomes a possibility in that the firm reflects the existence of quality operational,
business and customer servicing processes with also qualified personnel for executing the needed
activities. Thus, in the absence of quality processes and qualified personnel the implementation
of the CRM program in the firm fails to generate needed productivity (Information Resources
Management Association 2017).
Likewise, identifying CRM as a database management tool is also erroneous in that though CRM
functions can be carried out by a firm in the absence of database management tools, the carrying
out of database marketing without the use of CRM becomes difficult. The same reflects that
database associated marketing activities are limited in scope compared to CRM functions (Gelb
2017).
Again, the customer loyalty programs designed by the marketing department of the
organisations are executed based on inputs gained from the CRM processes. Thus, CRM as a
whole has a wider scope than that associated with the designing and execution of loyalty
programs (Chorianopoulos 2016).

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Another significant misunderstanding associated to CRM implementation in a firm is the degree
of automation it tends to share with different functions like sales, marketing and also customer
servicing aspects and thereby the insignificance of carrying out needed analysis. However the
truth is that the degree of automation of CRM with other business functions earns effectiveness
in that a pre-execution analysis is carried out based on interviewing both the managers and also
the user base associated with the CRM software. Inferences gained from the interview ideally
help the management to collaborate with the information technology team in both incorporating
and executing the needed CRM functions for meeting of business and customer servicing
objectives (Goldenberg 2015).
Conclusions
The analysis reflects that the business organisations tend to suffer from potential
misunderstandings associated with the CRM concept. The management and staffs involved with
the identification, designing and thereby the implementation of the CRM program needs to gain
needed clarity ass to the functions and objectives of the system and not merely treat it for
meeting of narrow objectives. It is also required to know and identify CRM as an effective
strategy rather than as information technology based application and thereby focuses on carrying
out needed analysis regarding its fitting with the business, customer servicing and operational
objectives.

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References
Chorianopoulos, A 2016, Effective CRM using Predictive Analytics, John Wiley and Sons,
United Kingdom.
Gelb, MJ 2017, The Art of Connection: 7 Relationship-Building Skills Every Leader Needs Now,
New World Library, California.
Goldenberg, BJ 2015, The Definitive Guide to Social CRM: Maximizing Customer Relationships
with Social Media to Gain Market Insights, Customers, and Profits, Pearson Education, New
Jersey.
Helgeson, L 2017, CRM For Dummies, John Wiley & Sons, United Kingdom.
Information Resources Management Association 2017, Advertising and Branding: Concepts,
Methodologies, Tools, and Applications: Concepts, Methodologies, Tools, and Applications, IGI
Global, United Kingdom.
Somani, D 2017, Mastering Microsoft Dynamics CRM 2016: An advanced guide for effective
Dynamics CRM customization and development, Packt Publishing Ltd, Birmingham.
Tarla, N 2016, Microsoft Dynamics CRM 2016 Customization, Packt Publishing Ltd, United
States.