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The Big Business of Customer Relations

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The concept of customer relations being an integrated process built around flow charts and spanning industries is turning into a fast-growing multi-billion-dollar software business.

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Sounds pretty basic today, but it wasn't until the '90s that the phrase "customer relationship management" was coined, and more comprehensive versions of the software were written. Everything that could be automated was.

CRM, however, is not just about technology. As it has evolved, it has also become more complex, more of a two-way street. While gathering information for the purpose of decision-making remained primary in order to drive increasing profits, companies also put some effort into building strong, enduring relationships with their clients in order to build loyalty. Many began giving back to favored customers, in the form of gifts, discounts, perks, and sometimes even cash.

Customer support, integrated into a CRM system, became more solid, even as machines were taking over much of the heavy lifting. Management began to treat the old saw, "the customer is always right," with greater respect. That was more difficult before the computer revolution.

Now it's a cinch. When customers complain, their grievances can be handled quickly and efficiently, on an individual basis. And the mistakes that caused the problem can immediately be rooted out so that they don't happen again.

Sales, once made, can be logged into the database and tracked. They can be cross-referenced to any number of other areas, and analysis can proceed from different angles. Customers' interests and buying patterns can be identified.

Sales managers can have direct access to information that allows personalization of the buyer's experience. Electronic sifting of sales data can help drive product development in the best possible direction. And customer follow-ups can be generated automatically, according to any criteria desired.

The Rise of Salesforce
Salesforce (NYSE:CRM) established its position by targeting smaller to mid-sized companies, an area largely neglected by its bigger rivals-primarily because the high cost of the CRM solutions of the day was affordable only by big-budget outfits.

It also pioneered the delivery of subscription-based CRM software online. Put the two together, and you have one of the biggest corporate success stories of the new century.

And no wonder. According to its web site "With Salesforce, every step of a sale-from phone calls and e-mails to collaboration with colleagues-is tracked in one place, so reps stay on top of deals and build stronger relationships with their customers. The average Salesforce.com customer experiences: +29% increase in sales; +34% increase in sales productivity; +42% increase in forecast accuracy."

Salesforce currently has more than 82,000 customers and over 2 million subscribers. It's international-with regional headquarters in Switzerland, Singapore, and Tokyo-and its software supports 16 different languages. It is annually recognized as one of Fortune's 100 best companies to work for, with a ranking that vaulted from 52nd in 2011 to 27th in 2012.

No positions in stocks mentioned.
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