Customer Relationship Manager(CRM) Interview Questions & Answers

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Operational CRM is oriented towards customer-centric business processes such as marketing, selling, and services. It includes the following automations: Sales Force Automation, Marketing Automation, and Service Automation.

Salesforce is the best suitable CRM for large established businesses and Zoho is the best CRM for growing or small-scale businesses.

Service automation involves service level management, resolving issues or cases, and addressing inbound communication. It involves diagnosing and solving the issues about product.

With the help of Interactive Voice Response (IVR) system, a customer can interact with business computers by entering appropriate menu options. Automatic call routing to the most capable employee can be done.

Consumer products are serviced at retail outlets at the first contact. In case of equipment placed on field, the service expert may require product servicing manual, spare parts manual, or any other related support on laptop. That can be availed in service automation.

Customer intimacy is generated and developed by understanding customer requirements, offering customized products, creating best outlet ambience, the warmth and interest of business staff while communicating with customers, and putting the customer first.

A Scandinavian services marketing group, named The Nordic School, emphasizes on supplier-customer relationship. It identifies the triplet of relationship marketing as −

Interaction − As customers and suppliers interact, each one provides a service to another. Customer provides information and supplier provides solution.

Dialogue − Communication is bilateral and is essential for the survival of the relationship.

Value − The business needs to generate something that is perceived as value to the customer.

It involves the engagement of the business in continuous product innovation for improvement, large share of investment in product research and development along with the risk. The business creates value by providing the best quality product or service solution in adequate time.

That's always a tough question, given that applications vary widely in price based on whether it's a hosted or installed delivery model, user-based or organization-wide subscription model, or a per-gigabyte or other data model. I would use the cost-per-sale and cost-per-lead values to help determine what a system is worth to a business. For most customers, services are going to be anywhere from $20 to $350 per month per user.

They concentrate on products with least costs and are ready to compromise on efficacy, performance, and quality. They are ready to blame the supplier on the occurrence of fault in product without thinking that they are responsible for choosing less quality product. Some customers tend to fix problems with a local, less-skilled dealer or by themselves without taking a supplier's direct help as it is cheaper. These customers also at times buy second hand products and expect it to perform as efficiently as a new one. The suppliers always find themselves arrested in payment-related issues with these customers.

Here, the interviewer is looking to gauge your engagement skills. What lengths would you go to to make sure that you leave no stone un-turned to retain a customer. I usually pick a live situation and elaborate on that. Make sure you talk about the size of the deal, it's impact on your overall base of accounts, and the exact steps you took to turn the account around.

By this question an interviewer wants to google how much you're ambitious, career-oriented, and committed to have a future with their company. So instead, of saying about your dream for an early retirement, or you can say or give them an appropriate example on your future plans and growth with this company also by this question you can say that how beneficial you can be with this company in a future period of time.

This theory is based upon the teachings of Lord Buddha regarding social conducts and acts of reciprocation. This theory states that people from a family, friendship, same-clan fellowship are connected to each other due to informal social relationships which impose them to follow reciprocal obligations to acquire the resources by exchanging favors and cooperation.

The following tools are used in acquiring new customers −

► Lead Management
► Campaign Management
► Event Based Marketing
► CRM Analytics

Customer development is an important process in any product development with which a business uses customer feedback to define and develop its product. The four core phases of Customer Development (Four Steps to Epiphany) are as given:

► Customer Discovery
In this phase, a business evaluates how it can address the customer needs or problems. The business knows about the target customer. The business gathers customer feedback about their requirements.

► Customer Validation
This is a phase when the customers understand the idea of the product and validates the product by realizing that the product will be able to solve their problems. In this phase, a business knows about the problem and the solution.

► Customer Creation
The business then evaluates customer feedback, and plans a strategy for product launch and product positioning in the market based on the feedback.

► Company Building
It includes transforming ideas and concepts to execution and scaling the business venture.

The answer to this question is not if but how much. Since CRM helps you do what you do better, if you are in a professional services company with long sales cycles, project terms, and frequent interactions and touch points, CRM will be exponentially more valuable to you. So service businesses, like lawyers, consultants, and accountants, are ripe for CRM but often have a technological aversion and a strong status quo to maintain.

The business conducts situation analysis by considering internal and external factors. This is nothing but SWOT (Strength, Weakness, Opportunities, and Threats) analysis to find out how the business is doing with the objective of examining readiness for CRM implementation.

The managers analyze and appraise existing customer strategy, served market segments, market position of business, marketing channels, etc. They try to find out the answers for the questions such as −

► Which customer segments does the business serve?
► What are the marketing and customer related objectives of the business?
► What is the business position and market share?
► What is the cost to customer management?
► How effective the present strategies of customer acquisition and retention?
► Which products/services under what category does the business offer?
► To what extent the customers are aware of the products/services?
► Who are business competitors, and what are profit margins?
► Which channels we use for product distribution? What is the depth of channel penetration?
► Which channels are effective? Which are becoming obsolete?
► How do channel partners find dealing with our business?
► Will the business buy, rent, or create its own CRM? What is each option's feasibility?

Thus, situation analysis serves as a foundation to know what the managers want to achieve by implementing CRM.

By this interview question, an interviewer wants to know about your future goals and how capable you are for your life's challenges & how you handle and cope up in a new environment. You should not say that your boss was not a good person or you should stay away about badmouthing your previous boss.

You can get over this question by smartly answer that "I've learned a lot from my current job profile, but now I'm looking forward towards new challenges & responsibilities on my shoulders, to broaden & shape my career in way that helps me to achieve my future needs and to gain a new sets of skills, therefore I see a lot of potential for me, in this job.''

The customers make the following sacrifices when it comes to buying from a business −

► Time
This is the time taken to physically arrive at the business outlet or to search for the required product online, and to compare various similar products with respect to specifications and costs. It also includes waiting time to avail the required product and extended time when a business delivers a product with incorrect specification.

► Money
It is the primary concern. Apart from the cost of product or services the business offers, it may be the cost of Value Addition Tax (VAT), surcharge, interest on the late payments, etc. Similarly, there can be discounts for first few customers or under any other schemes.

► Energy
The customers invest energy to get ready, step out for shopping, to drive or to travel from home to the business outlet. The energy also includes fuel consumption for transport.

► Emotional Costs
Purchasing a product can be a very hectic, frustrating, and at times annoying experience for the customers. Right from planning what and when to purchase, budgeting, getting ready and stepping out of the house for shopping, being through the crowd on the road, arriving at the store, dealing with the business staff who don't possess adequate knowledge of the product or schemes, paying exaggerated prices, carrying heavy packages, exchanging faulty or outdated products, etc. At times the customers need to travel in bad weather only to find out that the last piece of the required product was just picked by some other customer.

While buying the product, the customer has to deal with various risks such as financial (regarding product price), physical (possibility of the product turning harmful to customer's body), and performance (possibility of the product failure).

Analytical CRM is based on capturing, interpreting, segregating, storing, modifying, processing, and reporting customer-related data. It also contains internal business-wide data such as Sales Data (products, volume, purchasing history), Finance Data (purchase history, credit score) and Marketing Data (response to campaign figures, customer loyalty schemes data). Base CRM is an example of analytical CRM. It provides detailed analytics and customized reports.

Business intelligence organizations that provide customers' demographics and lifestyle data over a large area pay a lot of attention to internal data to get more detail information such as, "Who are most valuable customers?", "Which consumers responded positively to the last campaign and converted?", etc.

Analytical CRM can set different selling approaches to different customer segments. In addition, different content and styling can be offered to different customer segments. For the customers, analytical CRM gives customized and timely solutions to the problems. For the business, it gives more prospects for sales, and customer acquisition and retention.

Strategic CRM is a type of CRM in which the business puts the customers first. It collects, segregates, and applies information about customers and market trends to come up with better value proposition for the customer.

The business considers the customers' voice important for its survival. In contrast to Product-Centric CRM (where the business assumes customer requirements and focuses on developing the product that may sometimes lead to over-engineering), here the business constantly keeps learning about the customer requirements and adapting to them.

These businesses know the buying behavior of the customer that happy customers buy more frequently than rest of the customers. If any business is not considering this type of CRM, then it risks losing the market share to those businesses, which excel at strategic CRM.

This is another important question from a common interview questions and answers asked by the interview board for a customer relationship manager. Here, interviewer wants to know that how bad you are willing to do this job so you must be really aware about this situation. By answering this question you should not say that you like this industry this is wrong way to handle this kind of question. You can rather say that I love to communicate with new people therefore, I am so passionate about this job or you can display your previous job experience or you can show you success story.

It is such a hot area right now, there are literally hundreds. But two I have been following are Zoho and HighRise. Both are niche vendors that have garnered great contact lists with their other products and created relatively simple implementations for their clients and others. They both illustrate the fact that CRM is no longer esoteric - it is going mainstream, which is a great thing for business, particularly customer service and data security.

The cost of retaining highly committed customers is lesser than one required for retaining non-committed significant customers. The recently acquired customers are likely to deflect when a business fails to provide good service or product.

A business should retain the following customers −

► The ones satisfied with the product or service.
► The ones who can suggest product innovation.
► The ones who are value to the business and are capable of contributing to business profit.

There can be various types of customers a business have to deal with. Here are some prominent types of customers −

► Loyal Customers − They are completely satisfied customers. Though they are less in numbers, they can promote more sales and profit. They expect individual attention and demand polite and respectful response from the supplier.

► Discount Customers − They visit the business outlets frequently but transact only when business offers discounts on regular products and brands. They are the ones who buy only low cost products. Their buying behavior changes according to the rate of discounts. They are important to a business, as they contribute a significant portion of business profit.

► Impulsive Customers − They are with the business in urge and buy on impulse. They don't plan for buying anything specific in advance, but they urge to buy anything that they find good and productive at the time when they are in the store. These customers are challenging and very difficult to convince. They are capable of bringing high profit when treated tactfully.

► Need-Oriented Customers − They have a specific product on mind and they often plan before buying. They only buy when they need a product. They are difficult to satisfy. They need reasons to switch to another product or brand.

► Wanderers − They are least profitable ones to a business. At times, they are not sure what to buy. They are normally new in the industry and mostly visit the suppliers only to confirm their needs on products. They like to find out the features of the products in the market but they are least interested in buying.

► High Volume Customers − They are the ones who consume a high volume of products.

► High Future Lifetime Value Customers − The ones who can contribute profits in future.

► Benchmark Customers − They are the ones whom other customers follow.

► Door Openers − They can open doors to a new market for the supplier.

► Inspiring Customers − They force the suppliers to change for betterment. They suggest product improvements or inform the suppliers about opportunities of cost reduction.

Every business regards its customers as a lifetime stream of revenue; losing a single customer can cost the business very high. Lifetime Value (LTV) for a customer is considered to analyze the effectiveness of a particular marketing channel.

For example, if the Churn Rate of a business X is 5% and that of business Y is 10%, then in the long-term, business X would have a larger customer base than business Y, which places business X at the position of competitive advantage and directly influences profit of both the businesses.

A business can generate greater sales volume and in turn greater revenue if it knows its customers well and have good relationship with them. Thus, solely for the economic purpose, every business wants to have healthy relationships with their customers.

Yes, I have three that anyone can use. First, consider your future needs. Look down the road and ask "How many contacts will I have in five years?" "How many salespeople will I have?" "How many of my people will need real-time access to this information at home or on their phones and PDAs?" "How much would it cost me to replace these contacts?"

Second, take the opportunity to clean up your data now. Moving to a CRM solution is an opportunity to start with a clean version of accurate data. De-duplicate and otherwise scrub the data to minimize the possibility of needing to import twice. For example, the flexibility of Excel and Outlook BCM allow placing incorrectly formatted information in their fields. This data will not import well without some good planning.

Third, be sure to communicate throughout the process and get early buy-in. The biggest focus of Saleforce.com with its customers is adoption. Members of your team are influencers in their departments. Leverage their expertise and influence by building a team to help you make decisions about the solution. Even if you disagree, listening, acknowledging, and respecting will build loyalty and acceptance within the process.

This question is geared towards understanding the level of complexity that you can handle, or have handled in the past, and how you approach the problem. This becomes a 2-fold question because the interviewer inherently expects you to also talk about how you'd resolve the situation differently