Customer Relationship Management (CRM) is a term that refers to procedures and processes used by companies to manage relationships with their customers through gathering, storing, and analyzing information about their customers. It's about understanding, anticipating and responding to customers' needs. To manage the relationship with the customer, a business must to collect the right information about its customers and organise that information for proper analysis and action. The information must be kept up-to-date, make it accessible to the right employees, and provide the know-how for employees to convert that data into products and services better matched to customers' needs. 

The key to an effective CRM package is not just in what data is collected but in the organising and interpretation of that data. That's where computers come in handy (apart from the Solitaire you can play on them :-)) Computers can't, of course, transform the relationship you have with your customer. That requires a cross-department, top to bottom, corporate desire to build better relationships. But a robust computer-based CRM solution can increase sales by as much as 40-50% - as some studies have shown. 

An example of a CRM application would be in a clock manufacturing business (assuming they sell directly to end users). If the business maintained a database of which customers buy what type of product, when they buy products, how often they make that purchase, what type of options (color, size, etc.) they choose with their typical purchase, method of payment, as well as other information, the manufacturer will better be able to tailor the marketing effort - what marketing material to send out, what new products to promote to each customer, what preferences/options may swing the sale, and when would be a good time to target each customer. They could use the information to build a relationship with the customer by reminding customers of product recalls, updates, and maybe even to send the customer a birthday card. 

So how do you go about choosing a CRM software solution? 

Using a consultant could save you time and money. Software resellers are often good first line advisers as they have experience and feedback from selling competing CRM packages. Some resellers offer wider packages including strategic planning and process management.