Useful CRM Glossary

The terms listed here are defined as they pertain to Customer Relationship Management. In many cases the definitions are much broader when taken in context with other systems or environments.

ASP (Application Service Provider)
Refers to companies that will "rent out" or host applications to customers that do not want to purchase, develop or manage the software themselves. Also referred to as outsourcing or hosting.

Back Office Solution
Software applications designed to assist organizations with the management of behind the scene  tasks and processes related to accounting, human resources, distribution and manufacturing. These processes do not usually have direct interaction with customers, however when integrated to a front office application such as CRM, they increase the benefits of your back office and CRM solution.

BPR (Business Process Re-engineering or Redesign)
This strategy combines process and system change to achieve company goals. Through a fundamental analysis and the redesign of business processes and management systems, companies can often make large gains in productivity and performance.

BI (Business Intelligence)
An interactive process of exploring and analyzing customer data in order to discern trends or patterns resulting in gains such as identifying new sales opportunities and employee commitment.

Call Center
Outbound and inbound facilities that house either telemarketing or customer service personnel. Call Center software is one of the three main components in a standard CRM solution. In order to differentiate it from the other components, it is often referred to as the Customer Service  module.

CRM (Customer Relationship Management)
An enterprise-wide strategy and solution that impacts customer-facing departments and processes in a company. It is designed to improve customer service, loyalty and retention, optimize profitability and help companies better manage communication and interaction between their employees and their customers, partners and suppliers. A standard CRM solution includes three modules, Sales Force Automation (SFA), Marketing Automation and Customer Service.

Customer-Centric
Refers to a strategy or focus, which is closely aligned with CRM and the fusion of a company s people, process and technology. A Customer-Centric strategy is meant to measure and monitor all accessible and valuable customer information.

Data Cleansing
The process of ensuring that a company s CRM data is consistent, accurate and recorded correctly. Data Cleansing is often performed on existing legacy  systems that have duplicate records or that are plagued by poor querying and reporting due to dirty  data. It is also a critical component of any new CRM implementation in an effort to ensure that the new system starts with clean  data.

Data Migration
Also referred to as Data Conversion or Data Import. This process involves moving data from an old system into the new CRM system. Existing data from the old system will be cleansed and mapped to the new CRM system prior to starting this process.

Dirty Data
A common problem found in applications that employ databases. Dirty data may include incorrect or missing data values, and duplicate records, which can lead to problems such as inaccurate queries and reports. Dirty data may be the caused by badly managed data imports, poor entry standards for end users, poor coding or customization of the CRM system. When implementing a CRM system, one critical component is to ensure that your existing data is cleansed and properly migrated to the new system.

eDM (Electronic Direct Marketing)
Refers to marketing through CRM software and the internet. The CRM software provides the marketing department with the ability to analyze, select and target prospects and customers for marketing campaigns. It then creates the marketing piece in an email using text, flash or other multimedia. The marketing piece is sent out via email and is tracked and reported on using the CRM software.

ERM (Enterprise Relationship Management)
An enterprise-wide strategy and solution that impacts a company s back office . It is designed to improve the management and flow of these operations by integrating and automating back office departments and processes.

ERP (Enterprise Resource Planning)
Equivalent to ERM, although it refers more specifically to operational planning and resource optimization.

Field Sales
Refers to a company s sales force that normally works outside of the main offices. These employees often lack continuous PC connection with their company s network and therefore perform many of their tasks offline . They require access to customer data and CRM functionality, as well as the ability to easily synchronize their CRM systems with the company s main CRM system.

Front Office Solution
Software applications designed to assist organizations with the management of tasks and processes related to customer-facing departments. This is usually a CRM solution, but may include any other applications used in the customer lifecycle.

Knowledge Management
The formal strategy and software designed to manage and leverage a company s intellectual assets. This strategy promotes a collaborative and integrative approach to the creation, capture, organization, access and use of information assets. In CRM systems, a product information Knowledge Base is used by customer service or by customers directly in a self-service model.

Marketing Automation
Software applications designed to aid in marketing by automating many of the processes that are normally manually performed. These solutions often add new marketing capabilities not available in a traditional marketing environment such as eDMs, or they can automate existing processes such as lead and campaign management. Marketing Automation is a main component of CRM software.

Metrics
A set of traditional and non-traditional business measurements such as rating customer satisfaction and order throughput time. A critical aspect of a CRM strategy and solution is the definition, tracking and reporting of a company s metrics.

One-to-One Marketing
A relational marketing strategy conducted at the individual level. Messaging, content and offers are often personalized based on information about the prospects or customers that has been captured in the CRM system. This strategy was born out of the desire to regain the personal relationships typically found in small business environments such as a corner store, which have been normally absent in larger company-to-customer relationships.

PRM (Partner Relationship Management)
This piece of a CRM solution extends sales, marketing, customer service and other content to partners in order to promote better collaboration and improve channel sales effectiveness.

Project Sponsor
Also referred to as Project Champion or Executive Sponsor, this position is normally held by a senior client staff member involved with the CRM project. This critical role must be in place prior to starting a CRM initiative. The sponsor has overall decision-making authority and project responsibility. Much of this person s focus should be to promote the CRM solution and Customer-Centric vision to your entire company.

Relationship Marketing
This is the ongoing strategy and process of identifying and creating new value with individual customers over the lifetime of the relationship. Utilizing a CRM solution in order to track, anticipate and react to customer s requirements will lead to enhanced loyalty and retention.

ROI (Return on Investment)
The calculation of how much money will be saved or earned as a result of the investment in a CRM solution. An ROI analysis should be prepared at the start of a CRM initiative. After a predetermined period of time has past from the date the CRM solution was launched, measurements are made to compare the benefits gained against the implementation costs.

SFA (Sales Force Automation)
This component of a CRM solution allows the sales department to better manage the sales cycle and their sales forces. SFA may include territory management, forecasting, lead and opportunity management, quoting, sales literature and order entry. It also electronically manages all sales activities within a company.

Sales Methodology
A sequence of steps or predefined process put in place by management that is meant to increase the department s sales effectiveness. It promotes the tracking of customer activities and communication and the regular updating of the opportunity pipeline. This is meant to provide management with better insight into the pipeline and more accurate forecasting.

Segmentation
The division of a company s prospects and customers based on predetermined characteristics that are tracked throughout the sales cycle and customer lifecycle. This process enables a company to query, segment and cluster  their prospects and customers. Segments may be geographical, socio-demographical, behavioural or any other criteria that are defined by the CRM system. Segmentation allows a company to conduct target marketing.

Territory Management
This feature is found in the sales module of a CRM solution. It allows companies to more effectively manage sales personnel, distribute leads and align resources with opportunities.

Workflow
The automation of a process or series of processes through the linking of tasks and activities. The CRM software automatically routes tasks, notifications and records to predefined or user selected destinations such as users, departments, or business units.

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CRM stands for Customer Relationship Management

CRM is a new business approach based on an old business approach -- of knowing your customer. Like the neighborhood butcher of 40 years ago. It's a marketing, sales and customer service business approach that intregrates company wide information about your customers.

CRM when well planned and managed it helps organizations improve sales and marketing effectiveness, increase customer service, loyalty and retention, and optimize profitability.

CRM is not a software solution, but includes your people, your business process and your technologies. A company must embrace and maintain a customer-centric approach to have a successful CRM program.

Why is CRM Important? It's the money honey!

When your priority is faster and less expensive sales and customer service CRM make sense. It's six times cheaper to retain a customer then acquire a new one. This simple fact is propelling CRM into center stage at businesses worldwide. With the heightened cost of customer attention, new customer contact methods are catching on -- fast.

The power of the purse string belongs to the consumer. As Sam Walton said, "The customer has all the answers ... and all the money." In a tight economy, the ability to do repeat business is more important than ever.

Customer-Centric Focus. Time to start thinking like your customer.

Communication, Collaboration and Cooperation. 3 "Cs" critical for CRM project success.

Improve Business Processes. Don't pave the cow path.

Key Performance Indicators. Strive to benchmark, measure and benchmark again.

Data Cleansing > Data Standards > Data Quality. Remember to take out the garbage first.

CRM is not just about Technology. Implementation is about strategy not software.

Knowledge Transfer and Effective Training. CRM solutions are only as powerful as the people using them.

Segment the CRM Strategy. Not all customers are created equally.