What is E-CRM? Benefits, Limitations, Working, Components, Implementing, Vendor Solutions, Metrics

  • Post last modified:2 May 2023
  • Reading time:32 mins read
  • Post category:Business

What is E-CRM?

E-CRM stands for Electronic Customer Relationship Management, which refers to the use of digital technologies to manage and enhance a company’s interactions with its customers. E-CRM aims to improve customer satisfaction and loyalty by providing personalized and timely services through various digital channels, such as email, chat, social media, and mobile devices.

E-CRM is based on the principles of traditional CRM, which focuses on building and maintaining long-term relationships with customers by understanding their needs, preferences, and behaviors. However, E-CRM expands the scope of CRM by leveraging the power of digital technologies to create more efficient and effective communication and collaboration between businesses and customers.

Before delving deeper into E-CRM, it is important to have a clear understanding of what CRM is.

What is Customer Relationship Management (CRM)?

Customer Relationship Management (CRM) refers to the practices, strategies, and technologies used by businesses to manage their interactions with customers and improve customer satisfaction and loyalty.

CRM involves collecting and analyzing customer data to gain insights into their needs, preferences, and behavior, and using this information to personalize marketing, sales, and customer service interactions. By leveraging CRM, businesses can provide a seamless and consistent customer experience across multiple touchpoints, such as email, phone, social media, and in-person interactions.

Organizations adopt the Customer Relationship Management (CRM) program as a strategic, growth-oriented program to build one-to-one relationships with customers so that they become long-term and loyal customers.

The fundamental need for CRM is based on the following three paradigms:

  • It costs less to keep an existing customer than to acquire a new one.
  • It is easier and more profitable for a company to sell to a satisfied customer.
  • Some customers tend to be more valuable than others.

The main purpose of CRM is to emphasize the cooperative and collaborative relationship between an organization and its customers. CRM enables better customer service by combining all the interactions with customers into one integrated unified interaction. Hence, CRM provides benefits to both the organizations and their customers, as shown in Table:

Can build profitable relationships by taking advantage of customer interactionsInteract with organizations directly to specify preferences and convey grievances
Access customer information easilyRemain well-informed owing to focussed marketing efforts
Identify new opportunitiesAchieve better coordination and cooperation with sales executives
Evaluate performance and business metricsReceive administrative support for any issue related to products or their delivery
Identify the potential issues in business processes and improve them
Modify the system to integrate it with customer preferences
Table: Benefits of CRM to Organisations And Customers

CRM Approaches

Operational CRM

This approach allows a smooth integration of the customer interface with back-office transactions. It provides automated support to front-office business processes, such as sales, marketing, and customer service.

Analytical CRM

  • This approach allows an organization to analyze its relationship with customers based on data from a data warehouse.
  • It analyses the data gathered as part of operational CRM or other sources to identify the means for enhancing the company’s relationship with its clients.

Collaborative CRM

  • This approach enables an organization to work closely with selected customers, suppliers, and business partners.

  • It focuses on interaction with customers through personal contact, letter fox, phone, or email.

CRM Process Framework

CRM process framework refers to the decisions taken by an organization for initiating relationship-building activities with a single customer or a specific group of customers to develop long-term cooperative or collaborative relationships.

Social CRM

Social CRM is a new component of CRM. It is conducted by communicating with customers via social networking sites, such as Facebook, Twitter, and LinkedIn. Instead of only dealing with data and information as is done in CRM, social CRM enables organizations to engage customers in conversations and relationships.

Social media enables marketers to search, track and evaluate conversations on the web about their brands. On social media sites, users express their opinions about brands, organizations, and customer service. This information is disseminated among other members via social media sites. Marketers can use this information to get a realistic picture of the organization, enabling them to direct their activities toward ensuring increased customer satisfaction.

E-customer Relationship Management (E-CRM)

CRM activities in an organization focus on establishing, developing, and maintaining successful one-to-one relationships with customers. When CRM activities are conducted using web technologies, such as e-mail, chat rooms, and social media networking, they are referred to as e-CRM. It is also known as web-enabled or web-based CRM.

e-CRM refers to the use of information technology in building and retaining relationships with customers. It integrates web applications, such as e-mails, chat rooms, and e-forums into the enterprise CRM strategy. It allows customers to directly interact with organizations, which helps in maximizing customer satisfaction, loyalty, and profitability of the organization.

e-CRM is an extension of traditional CRM techniques and integrates electronic channels with traditional CRM. This helps organizations to operate in real-time and respond promptly to customers’ inquiries. Since the interactions are transparent, organizations can analyze customer behavior and measure the success of activities.

E-CRM System

All activities in an e-CRM system revolve around customer selection, acquisition, retention, and extension.

Customer Selection

  • Who to target?
  • What value do these customers bring to your objectives?
  • Where do we find these customers?

Customer Acquisition

  • Focus on the right segments and target them
  • Minimise acquisition costs
  • Prioritise customer relationships and service quality
  • Approach appropriate platforms

Customer Retention

  • Know customers’ needs individually to develop a good e-CRM strategy
  • Offer value continuously to retain online interest and improve customer relationship
  • Focus on delivering unsurpassed service quality
  • Choose the right channels for your strategy

Customer Extension

  • Recognize the customer’s interests
  • “Cross-sell” to customers by persuading them to buy additional products
  • “Upsell” to customers by persuading them to upgrade their purchase
  • Provide good service quality
  • Use appropriate platforms to expand the customer base

Benefits of E-CRM

E-CRM enables organisations to respond to the needs of customers more effectively and serve them on a one-to-one basis. Moreover, it helps organisations to personalize their customer interactions through e-mail, telephone, and live web chat. Apart from this, application of E-CRM also helps different departments of an organisation to perform their activities effectively.

The following are the benefits of E-CRM:

Direct Benefits

Imply that E-CRM helps an organisation to reduce costs incurred on manual processes, achieve maximum output, and improve business performance. Moreover, E-CRM enables organisations to reach out to maximum number of customers, which, in turn, increases overall organisational revenue.

Indirect Benefits

Include benefits, such as reduced lead times for ordering products, minimum risk of obsolete stock, customer satisfaction, and effective communication. For example, achieving a high level of customer satisfaction is not direct and cannot be attained in a single day, but it can be experienced through an appropriate application of E-CRM.

Strategic Benefits

Refer to long-term benefits of E-CRM that can be achieved through close interaction with customers, suppliers, and employees of an organisation. These benefits are often non-quantified, unseen, and valuable. For example, E-CRM helps marketers to formulate effective marketing strategies, which may provide benefits in the long run.

Scope of E-CRM

The scope of e-CRM encompasses:


Supports key capabilities including contact management, opportunity management, forecasting, and a 360-diploma view of all consumer money owed and interactions. Automate and prepare area carrier sports for in depth sales and closing.


Detailed schedules and tasks, maintaining contact lists and part time logs, automated hyperlinks to leads, money owed or contacts, control of product and useful resource records, advertising alerts, etc.

Channel control

Support for key capabilities including marketing campaign control and analysis, consumer demographic analysis.

Customer service

Provides green workflow and smooth get admission to records whilst consumer records are synchronised throughout all verbal exchange channels.

Partner management

Track and examine sales from companions and song touch with dealers, distributors, and different sales companions.


Creating and adapting consumer-orientated websites that permit clients to generate and guide requests from the company’s website.

Limitations of E-CRM

Despite all the benefits that e-CRM offers, it can be a challenge to provide consistent and timely customer service when customers make inquiries through multiple channels and contact points. This leads to some disadvantages in the use of e-CRM.

Organizations using e-CRM may encounter the following problems:

  • It can be a challenge to design an e-CRM structure to integrate it with an existing or older system.

  • To create an e-CRM platform for customer contact, organizations need different tools to implement the platform.

  • It is difficult to ensure the optimal performance of the system against the expected outcomes.

  • To manage workflow in e-CRM, there is a need for continuous technical knowledge, which leads to training costs for employees.

  • It might be expensive to update the system with continuous development and evolution in e-CRM technology.

Working of E-CRM

The working of an e-CRM system involves two types of activities:

  • Primary Activities: These are customer-centric and include customer acquisition, retention, and expansion.

  • Supportive Activities: These are more CRM-related. Primary activities might need some supportive activities, such as channel integration and information management.

Information management in e-CRM involves the creation of a customer database based on the following information:

  • Of the customer
  • For the customer
  • Provided by the customer

Components of the E-CRM Framework

The common components of an e-CRM framework are displayed.

Strategy Formation

To make the existing strategies custom-er-centric, organizations need to identify their key capabilities and the different ways in which they can offer value to their customers. e-CRM enables organizations to have one-to-one relationships with their customers, satisfy their expectations and solve their problems. In such ways, strategy formation is related to the integration of business and customer strategies.

Multiple Channel Integration Activity

A major challenge of e-CRM is to develop an integrated strategy for the existing channels as well as new, web-based ones to improve customer relationships. Multiple channel integration should:

  • Provide integration to all channels
  • Get integrated into the customer base

Information Management Activity

Organizations use e-CRM to collect customer data from all points of contact. Thereafter, they use a database to create an updated and comprehensive profile of customers. This enhances the quality of interaction with customers.

Customer Acquisition

e-CRM enables customer acquisition through the web by converting website visitors into customers.

Customer Retention

Organizations use customer retention strategies to effectively maximize their return on investments in customer acquisition. Customer acquisition requires more investment than customer retention. Therefore, organizations find methods to extend the duration of their relationships with customers, focusing on the most profitable ones.

Customer Expansion

In several organizations, the most valuable customers actively participate in two-way interactions through e-CRM. Moreover, companies expand their existing customer base through ‘word-of-mouth’ marketing. Feedback or reviews from existing customers increase the customer base. This also helps organizations to introduce new products, enhance business processes and meet customer needs through e-CRM.

Implementing E-CRM

To implement e-CRM successfully, three factors are necessary. Let us now study these factors in detail.

Process Appropriateness

The processes in an organization should support e-CRM technology. To evaluate the appropriateness of a process, the organizations can consider the following criteria:

  • Communication (frequency, volume, style, medium, and purpose) between the organization and customers in the system

  • The ability of the process to link to different geographical regions

  • Personalization of the customer service ability of the process

  • The problem-solving ability of the process

Customer Information Quality

While implementing e-CRM, the organizations assess the quality of customer information based on certain parameters. These include honesty, output timeliness, applicability, reliability, awareness, completeness, and relatedness of the processed information. Organizations can use the following methods to evaluate customer information quality:

  • Database Management System (DBMS)
  • Information effectiveness
  • Proper classification of information
  • Predicting customer needs

Technology System

The organizations can evaluate the technology system for e-CRM based on the functional specifications of the system, such as:

  • Resource exploitation
  • Resource reliability
  • Response time
  • User-friendliness
  • Data Accuracy
  • Data reliability
  • Comprehensiveness
  • User contact ability
  • Documentation quality and ability

Together, these factors support each other to ensure a successful e-CRM implementation in organizations.

Vendor Solutions in E-CRM

e-CRM solutions are designed and developed to enhance customer satisfaction, improve customer loyalty and increase profitability. Customers prefer simple, straightforward, honest, and consistent interaction with the organization. Considering this, user-friendly vendor solutions can be categorized into three types.

Let us now discuss these three vendor solutions in detail.

Customer-facing CRM Applications

In this category, customers directly use applications to interact with the organization. These e-CRM applications help in automating information flow along with supporting the employees in sales and service. One such application is the Interactive Voice Response (IVR) system. This is an automated telephony system that uses a computer to interact with customers for acquiring information and route calls to appropriate personnel.

This system can respond to users with pre-recorded or dynamically generated audio responses to guide them on how to proceed further. An IVR system uses a combination of voice and keypad input selection to provide appropriate responses in the form of voice mails, fax, telephonic conversations, or e-mails.

Customer-touching CRM Applications

In this category, customers interact directly with an application. They use interactive computer programs to find solutions, rather than interact with people in the organization. These include self-service activities, such as Frequently Asked Questions (FAQs), personalized web pages, and e-mails.

Customer-centric CRM Applications

These applications are also referred to as CRM analytics. They use Business Intelligence (BI), such as data mining and online analytic processing, to evaluate and gain insights into their customers, products, markets, and operations. For example, data warehousing, mining, and reporting help organizations in achieving one-on-one targeting of customers and delivering personalized deals to increase sales and improve customer relationships.

Metrics for Evaluating E-CRM

To evaluate the success of e-CRM implementation, an organization can use certain criteria based on customer satisfaction and operational performance. However, it is difficult to evaluate tangible returns on resources extended to plan, develop, implement, and operate e-CRM. Therefore, the organizations assess the intangible benefits of e-CRM.

  • Customer loyalty
  • Customer Acquisition and Retention
  • Channel Management
  • Operational Excellence
  • Service Quality
  • Value Enhancement
  • Effectiveness of Processes
  • Innovation of Operation
  • Service Improvement
  • Competitiveness
  • Trust
  • Efficiency

To evaluate an organization’s financial performance, the most important criteria are:

  • Cost reduction
  • Increase in revenues
  • Value of stock

In traditional models, customer satisfaction is assessed through surveys or grievances and complaints registration systems. Nowadays, web technologies used in e-CRM enable organizations to get prompt feedback after an interaction, in minimum time. Customer satisfaction leads to customer loyalty, which is another criterion for evaluating the success of e-CRM.

To assess the success of e-CRM, organizations need an evaluation tool that can assess both tangible and intangible elements. e-CRM metrics follow the principle of a cause-and-effect relationship between e-CRM activities and their effect on business objectives. The steps for evaluating e-CRM are as follows:

  • Determine the objectives and goals of CRM.

  • Find inter-relationships between CRM activities and business goals.

  • Analyze the outcomes of the inter-relationships to identify the effectiveness of CRM.

  • Decide perspectives and metrics in the evaluation method based on the customer-centric evaluation.

  • Analyze the effectiveness of CRM based on the evaluation results.

Quite often, many organizations consider the implementation of e-CRM an expensive investment project. Hence, it is important to evaluate the actual effectiveness of e-CRM as a function of customer satisfaction. This can be done by evaluating the organization’s CRM objectives against the changes brought about by e-CRM.

Article Source
  • Awad E.M. (2004). Electronic commerce. 1st ed. Boston, MA: Pearson/Prentice Hall.

  • Manzoor A. (2010). E-commerce. 1st ed. Saarbrücken: LAP Lambert.

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