Pareto's Principle and The Infinite Value Of CRM
In 1906, Italian economist Vilfredo Pareto developed a mathematical formula to explain his country’s uneven distribution of wealth – now commonly referred to as the 80-20 rule. So what does this economic phenomenon have to do with managing your Web customers and your online business community? Well, it turns out… quite a bit.
In its simplest form, Pareto’s 80/20 rule (if applied to today’s Internet business world) means that only a few your visitors and customers are vital while most are meaningless. Now while that may seem harsh to some, both business owners and managers of the digital age should understand that as such, it is prudent to align overall business strategy to customer relationship management (CRM) policies and practices to ensure a positive result for their Web-based enterprises.
In its simplest form, the goal of CRM (Customer Relationship Management) is to identify, build, enhance, and manage relationships with customers (preferably the most valuable customers) based on those customers unique needs. Satisfying those needs and building long term trust through that satisfaction is increasingly the mark of a successful company. By focusing more resources on the twenty percent of consumers that create 80 percent of the revenue, website owners will be more capable of securing the long term attention of their most profitable clients.
What is Customer Relationship Management…Really?
CRM is an information-industry term for the methodologies, software and capabilities that assist an enterprise in managing customer relationships in an organized way. Typically encompassing all aspects of the interaction a company has with its customers (whether that be sales or service related) CRM has garnered the attention of major corporations and small and medium sized enterprises as well. The infinite nature of the definitions surrounding CRM often renders it a confusing undertaking however regardless of business size.
CRM can be understood by recognizing its components, an existing integration of enterprise development forces: sales and sales management, time management, telemarketing, customer service and support, marketing, executive information sharing, ERP integration, customer portals, data synchronization, e-commerce platforms and access to field service support.
For example, an enterprise might build a network-based database about its customers that describes relationships in sufficient detail so that management, salespeople and customer support staff can access information, match customer needs with product plans and offerings, send reminders of service requirements, know what other products a customer had purchased, and all in a methodical, organized manner.
Putting Pareto’s Principle and CRM In Action
There are a multitude of CRM solutions available to website owners and online business managers. From the comprehensive sales automation infrastructures developed by Salesforce.com to the custom integrations of CRM and marketing automation provider WebAntiphon.com, there is at least some aspect of customer relationship management that can be integrated into the day to day operations of your online business.
Most, if not all, CRM providers focus on providing sales force automation and dynamic lead management solutions.
Sales force automation is the streamlining of sales functions within an organization. A comprehensive CRM package with sales force automation usually provides such functions as contact management, information sharing, proposal and presentation generation, calendars and to-do lists. When sales functions are integrated with marketing and customer service, it is known as "enterprise relationship management" or ERP.
Instant Survey: CRM Integration
To actively organize and maintain customer data generated by the automated sales force, lead management software provides the ability to share and track those leads across an enterprise. Instantly adding or updating leads, tracking conversions, running reports and printing labels are just some of the reasons that CRM has experienced a surge of interest from small businesses and Fortune 500 companies alike.
Those organizations which utilize CRM applications effectively are those which establish logical management processes and then analyze and control the client data that has been acquired. Consumers need to feel as though you are providing a comprehensive, end-to-end solution so CRM applications must empower businesses to properly manage interactions if there is any hope to improve interaction processes, performance, targeting or operational management.
Manage This Issue: How CRM Can Help
CRM applications and procedures can help online enterprises accurately identify the twenty percent of their customers that are really important to their bottom line. When an online business works within an organized structure based in technology, both customers and businesses win. What CRM policies and software can provide an organization is the ability to increase the few vital customers they have and reduce the many clients which do not produce revenue for your organization. Pareto would be pleased.