Exercise 22.4

Question 4.
Describe the CRM Life Cycle and the different segments of CRM software.

CRM software systems automate customer-related business tasks.

The life cycle of CRM consists of three phases - customer acquisition, customer relationship enhancements and customer retention. CRM software streamlines CRM activities at each phase of customer relationship management.

Customer Acquisition
This phase includes Contact management modules and direct marketing modules to allow companies to effectively promote and market their products and services to prospective clients. Those modules help speed up the process and reduce the cost of acquiring new customers.

Customer Relationship Enhancements
This phase of CRM helps companies better understand existing customers' needs and behaviours and enhances the profitability from existing customers by cross-selling. Companies can direct their selling efforts to a customers' existing needs and preferences.

Customer Retention
This phase is about providing customer service and support. Software can be used to increase customer satisfaction while reducing the cost of support. Customer retention is critical to the overall profitability of an organisation as a customer can leave a company in seconds as a result of poor customer service.

References
Zhang, B. (April,2005). CRM and Customer Life Cycle. Retrieved from http://www.crmnewz.com/crmnewz-18-20050407CRMandCustomerLifeCycle.html