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

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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.

Table of Content

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.

Importance of E-CRM

To get a detailed knowledge of the importance of CRM let us discuss one example.

Tesco is a supermarket chain that offers loyalty cards to its customers. When customers of Tesco use the loyalty cards during pay transactions for goods, the purchases details gets stored in their database which enables Tesco’s to check all the purchases done by the customers.

Tesco sends its customers money saving coupons at regular intervals, by post for the products purchased in the past to encourage customers to continually return to Tesco to do their shopping.

The importance of e-CRM is explained as follows:

Awareness of web customer needs

Companies may gain a comprehensive understanding of their customers’ requirements. Through e-CRM it is feasible to gain access to the store and track the user’s activity and personal information across the entire organisation.

To increase the efficiency of sales representatives’ performance, marketing and support managers will benefit from communication and purchasing histories that are up to date. Furthermore, having access to social media allows businesses to keep track on the current interests of their customers.

Workflow automation

Earlier, sales managers were primarily concerned with the transactions they were involved in. A lot of their time was wasted following up with the customer. Companies can use e-CRM to automate follow-up and email distribution.

In addition to a variety of information, they may set time limits. A customer, for example, has purchased a laptop. This client may be the subject of a newsletter from the company’s sales rep. Proposals for various accessories will be included. Another example is to set up alerts for clients who leave the site without purchasing anything. Discount coupons or other special offers can be sent to them.

Effective business data management

To find the necessary contact or document, there is no need to waste time searching. By taking use of the relationships between different types of information, CRM makes it possible to organise and link all the company’s data in one place.

Detailed reporting and forecasting

Analysing the efficiency of internal processes has a significant impact on the company’s future goals and budget. Reporting features in CRM software provide a wide range of customisable choices for showing both successful and unsuccessful actions. Return on Investment or ROI and revenue levels can be traced back to these records, which also highlight opportunities for improvement.

Improve customer loyalty

The additional CRM capabilities will aid companies in providing their customers with secure and accurate hosting. Companies will be able to identify and prevent fraudulent transactions, as well as a simple checkout process. ‘Where is my order?’ is the most often asked question by customers. Customers will want the easy-to-use order status and detailed history search. Customers that have left a business can be tracked and sent special offers.

Other benefits

Other benefits of e-CRM include:

  • Customer interactions, service and support have all been improved.
  • Identifying and responding to client behaviour to make appropriate offerings
  • Customer satisfaction and loyalty have increased as a result.
  • Increased efficiency and cost savings are the goals.

Different Levels of E-CRM

The different levels of e-CRM are:

Foundational service

This comprises the bare basic services such as the effectiveness and responsiveness of a website, the fulfilment of customer orders, services that are essential to the operations of an organisation such as an IT support desk.

For example, Big Basket has a responsive website for showing products and getting orders from customers.

Customer-centred service

Order tracking, product configuration and customisation, as well as security and trust, are all examples of customer-centred services. These are the services that are most important to most clients.

For example, Big Basket assists its customers to check the progress of the ordered items (1. Order processed, 2. Items packed, 3. Shipped, 4. On the way, 5. Delivered). ‰ This service provides some relief to the customer as they can track their order anytime, anywhere.

Value-added service

The term “value added services” refers to supplemental services such as online auctions, online training and online education.

For example, Big Basket has implemented a no-questions-asked return policy. It has also introduced BB Daily and a no-minimum order feature.

A customer service knowledge base enables customers to self-serve answers to frequently asked questions, lowering the high costs associated with additional workload for living as customer service agents.

Self-services such as search functions and order delivery status are becoming increasingly significant in CRM activities. The advent of the Internet and the use of e-CRM has increased the number of possibilities for self-service activities available. The integration of such activities into traditional channels is a vital success factor in achieving success. A good illustration of this was Ford’s proposal to sell automobiles directly to customers through its website, which sparked widespread opposition among the company’s dealer network.

Active CRM operations fall into two categories: reactive service and proactive service.

When a consumer has an issue and calls the company, this is referred to as reactive service. An example of proactive service is one in which the management does not wait for the customer to contact the company. The manager makes direct contact with the consumer to build a dialogue and resolve issues.

Goals of E-CRM

E -CRM is the newest trend in CRM today . Organisations can no lon- ger expand or improve their business without embracing the Internet and relying solely on old-fashioned methods. It is crucial for them to evolve with the trending technology and adapt to e-CRM, whether it B2B or B2C enterprises.

E-CRM systems, in general, have diverse elements that retain customer-business interactions related with internal processes across various domains for various operational and analytical purposes. One collection of data and a set of business rules determined by the organisation are used to handle all client interactions, regardless of what type of channel they use.

E-CRM is no more just a means to an end, but a must for today’s businesses to remain competitive. It employs a variety of technological methods and tries to incorporate CRM into the way businesses operate. The goal of e-CRM is to improve customer connections rather than replace them.

The goals are explained as follows:

Enhanced customer reliability

The primary purpose of an effective e-CRM system is to make it simple for a business and its customers to communicate on a consistent level of professionalism, regardless of the medium of communication used to communicate.

With a uniform transaction history and client database, calculating the entire cost of maintaining a connection with a single customer becomes much simpler. It also makes the notion that all consumers are not on the same level and should be treated differently depending on their specific qualities and requirements, among other things. Customer loyalty and satisfaction will certainly rise because of this.

Efficient marketing strategies

Given that it has become a simple and effective technique for predicting consumer demands and requirements, firms can develop better, more organised and well-planned marketing strategies for desired products to attract a suitable customer range based on product preferences.

These e-CRM tactics, when properly implemented and supported by targeted marketing and thorough customer data analysis, can produce remarkable results in terms of increased sales and profitability. Customers can be classified based on their similarities and wants and marketing methods can be tailored to each group to achieve certain goals.

Superior quality customer service and support

Because an e-CRM system produces a single customer database, it allows the business to service customers’ requirements at their highest level of efficiency and with the greatest amount of ease. It prevents the enormous time gaps that can occur because of a lack of knowledge about the customers.

Customer relationship management technologies such as live support, search engines, news feeds and content management are just a few examples of the numerous options available.

Increased efficiency with total cost of ownership

Data mining is one of the most important strategies for condensing enormous amounts of data into an only source. It brings together diverse teams such as marketing, sales and other departments to share information and work together to achieve common corporate objectives. It is no surprise that this would result in a reduction in the overall cost factor as well.

Application of E-CRM

The following are the applications of e-CRM:

Customer interaction centres

This type of facility is designed to deal with customer support issues that come in through a variety of different channels. Using this method, clients can communicate and interact with a company in whatever way they choose — via phone, fax, email and the Internet’s interactive features (e.g., Web chat). Customers can be served better if customer support employees have access to information about their past purchases, transactions and previous interactions.

This is how a multi-channel CIC works: ‰

  • One or more channels are used by a customer to contact the company.
  • The system gathers data and integrates it with a database before deciding what service to provide in response.
  • The system directs the customer to either a self-service option or a live agent. In this step, the customer’s problem is solved or their query addressed.
  • The service is offered to customers. When it comes to customer service,

Automated response to E-Mail

E-mail is the most used online customer support method. E-mail is a low-cost and quick way to send and receive information and correspondence on a wide range of issues, including customer service responses. Cus- tomer e-mails have been flooding in because of the simplicity of sending e-mails. Every week or even every day, some organisations receive tens of thousands of emails. Manually respond- ing to these e-mails would be time-consuming and expensive.

Customers want answers within 24 hours, on average (a policy of many organisations). The term “autoresponder” refers to a system of pre-programmed email responses designed to answer frequently asked inquiries. Infobots and e-mail-on-demand are other names for autoresponders: text files that are automatically e-mailed back to the person who requested them. To help with customer service, marketing and promotional efforts they can provide standard information.

Sales force automation

One of the most important areas of communication between businesses and their clients is through their sales representatives (both the individuals and the businesses). The better, faster and more accurate service they can deliver to clients is directly proportional to the amount of computer support they have.

SFA systems enhance the selling activities of a company’s sales team by helping salespeople manage leads, prospects and customers via the sales pipeline. A wireless gadget that connects quickly to the company intranet is an example of such an application.

Field service automation

Employees in field service, such as sales agents, are constantly on the go and engage with consumers. Repair technicians (such as those from the telephone or electric companies, for example) are examples of field service representatives. Increasing client satisfaction may be facilitated by equipping service personnel with mobile devices.

Field service reps and service managers benefit from the use of field service automation applications. Customers’ service inquiries, service orders, contracts, schedules and service calls are all handled by these software programs Agents in the field can use these tools to organise their workdays, manage dispatches and generate reports. Wireless gadgets, such as those in SFA, are good examples.

Personalised web pages

For example, My Yahoo! and other such services let clients establish their own personal web pages. When a consumer logs on to their personalised page, companies may quickly and easily send customised information, such as product information and warranty information.

Additionally, a vendor’s website allows customers to push information to the vendor’s site. Customers’ purchases and preferences can also be saved on these web pages. Bank, stock portfolio, credit card and so on. Customised web pages are common examples. Users may view their account balances, past and present transactions and much more on these types of websites.

Web self-service

It is possible for clients to self-serve in the Internet era. This method, known as web self-service, allows users to perform tasks previously performed by corporate cus- tomer care professionals. Ekart’s package tracking system is a company providing web self-service platforms.

Tracking num- bers are entered into the Ekart website and clients can see the status of their packages. Applications for self-service can be used with customers, employees, suppliers and any other business partners

Self-configuration and customisation

The ability to personalise products and services is a great approach to win over new clients and keep existing ones happy. If a product has a lot of possibilities, this is especially true. Dell and Mattel are among the many companies that allow customers to configure their own products or services.

Production decisions are made based on actual consumer demand when the order is linked directly to the production process. It is common for customers to be connected to the company and, if necessary, to product designers.

Analytical tools

Analytical reporting, OLAP (Online Analytical Processing), data mining and web analysis are the most used technologies in CRM analytics as a data mining company, Microsoft is just one of several (with their SQL Server database). Customer data can be subjected to data mining and other advanced analytical techniques, as the report has found several examples of this being done.

Customer relationship management (CRM) analytics improves not only sales and service but also advertising planning and analysis, marketing strategies a

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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