Customer Relationship Manager(CRM) Interview Questions And Answers

CRM stands for Customer Relationship Management.

The literal and original meaning of the expression "Customer Relationship Management" was, simply, managing the relationship with your customer. Today it is used to describe IT systems and software designed to help you manage this relationship.

This is a most common interview question that is asked in almost every customer relationship manager job interview so you must be prepared about this very carefully. Here, I want to tell how you should get over this question easy and comfortably; many times we see that people respond this question talking about their personal life but that is completely wrong. By this question an interviewer wants to know about your abilities & how you demonstrate yourself so, you should start speaking from academics and end it on your last job profile & if you are a fresher then show off your strengths and about your projects and summer training that you've handled during the academics

This is another commonly asked question in any job interview. By this question about CRM interview question and answer interviewer wants to know about your financial need because everybody does work hard to be financially sound. But here rather saying that I was earning $25,000 - so, now I'm looking forward $30000. This is a wrong way; you should avoid saying exact number of your need.

You can say that "I am more interested in role than the pay so I could expect to be paid the appropriate amount for this role, based on my five years of experience.

First, I expect CRM to become much more commonplace. Players like Zoho and 37signals (Highrise) are knocking down barriers to entry. I also expect to see some consolidation. I think the bigger players, like Salesforce, Microsoft, and SAP, will buy up some of their smaller rivals to build into their suites and migrate their user bases. As long as the acquiring provider keeps the connections intact during the migration and meets a similar price point, it will be a win-win. I also think we'll be seeing more mobile-friendly applications, like Salesforce's Visualforce and NetSuite's iPhone, to maximize data access and timeliness.

In my experience, marketing is somewhat of a new concept in CRM. Sales is definitely involved, but most often it is operations leading the charge.

There can be multiple definitions of CRM from different perspectives −

From the viewpoint of the Management, CRM can be defined as an organized approach of developing, managing, and maintaining a profitable relationship with customers.

By equating the term with technology, the IT organizations define CRM as a software that assists marketing, merchandising, selling, and smooth service operations of a business.

As per Franics Buttle, World's first professor of CRM, it is the core business strategy that integrates internal processes and functions, and external networks, to create and deliver value to a target customer at profit. It is grounded on high quality customer data and information technology.

The primary goal of CRM is to increase customer loyalty and in turn improve business profitability.

Many organizations use Outlook BCM or Excel for managing their contacts, which offer no planning or setup process - just create a column or type in a field and get started. This causes problems when information is related and the flexible aspects of the previous solution are overlooked. There are real benefits that won't happen without understanding the new vernacular; the specific way the new solution describes the data. For example, an "account" in Salesforce may not be the same as an "account" in Highrise. In fact, it might have another name altogether, such as "company." Understanding how the particular vendor uses "leads" or "opportunities" will help to avoid a great deal of frustration.

CRM systems are divided based on their prominent characteristics. There are four basic types of CRM systems −

► Strategic CRM
► Operational CRM
► Analytical CRM
► Collaborative CRM

Marketing automation involves market segmentation, campaigns management, event-based marketing, and promotions. The campaign modules of Marketing Automation enable the marketing force to access customer-related data for designing, executing and evaluating targeted offers, and communications.

Event-based (trigger) marketing is all about messaging and presenting offers at a particular time. For example, a customer calls the customer care number and asks about the rate of interest for credit card payment. This event is read by CRM as the customer is comparing interest rates and can be diverted to another business for a better deal. In such cases, a customized offer is triggered to retain the customer.

The most prominent objectives of using the methods of Customer Relationship Management are as follows −

Improve Customer Satisfaction − CRM helps in customer satisfaction as the satisfied customers remain loyal to the business and spread good word-of-mouth. This can be accomplished by fostering customer engagement via social networking sites, surveys, interactive blogs, and various mobile platforms.

Expand the Customer Base − CRM not only manages the existing customers but also creates knowledge for prospective customers who are yet to convert. It helps creating and managing a huge customer base that fosters profits continuity, even for a seasonal business.

Enhance Business Sales − CRM methods can be used to close more deals, increase sales, improve forecast accuracy, and suggestion selling. CRM helps to create new sales opportunities and thus helps in increasing business revenue.

Improve Workforce Productivity − A CRM system can create organized manners of working for sales and sales management staff of a business. The sales staff can view customer's contact information, follow up via email or social media, manage tasks, and track the salesperson's performance. The salespersons can address the customer inquiries speedily and resolve their problems.

Collaborative CRM is an alignment of resources and strategies between separate businesses for identifying, acquiring, developing, retaining, and maintaining valuable customers. It is employed in B2B scenario, where multiple businesses can conduct product development, market research, and marketing jointly.

Collaborative CRM enables smooth communication and transactions among businesses. Though traditional ways such as air mail, telephone, and fax are used in communication, collaborative CRM employs new communication systems such as chat rooms, web forums, Voice over Internet Protocol (VoIP), and Electronic Data Interchange (EDI).

F. Robert Dwyer, a marketing professor at Lindner College of Business states five phases through which a customer-supplier relationship evolves
Awareness − The parties come in contact with each other and see each other as a possible customer or supplier.

► Exploration − The parties find out more about one another's capabilities and business prospects. Trial purchasing takes place and performance is assessed. If deal is not smooth then the relationship terminates with the damage of less costs.

► Expansion − It is composed of attraction, communication, bargaining, development of rules, and development of expectations from each other.

► Commitment − Trust begins to develop and deals are executed as per the norms and expectations. Mutual understanding and cooperation develops, and number of transactions start building up.

► Dissolution − Not all relationships can survive. Some relationships are terminated either bilaterally (both parties agree to end) or unilaterally (one party decides to end). If it is bilateral decision then both parties retrieve the invested amount and resources. Supplier exits relationship in case of failure to contribute sales volume or profit. Customer ends relationship unilaterally due to changes in product requirement, repeated servicing failure, etc.

Dissolution can be avoided by reducing cost-to-serve.

It states that relationships are important not only from the viewpoint of customers but also from the angle of stakeholders of the business such as employees, suppliers, and government. It also found out that customer's satisfaction and customer retention are value drivers of any business.

In such a situation, it's critical to look at a couple of things:

1. The current size of the customer vs. it's growth potential going forward.
2. The brand value that this customer brings to your organization.
3. The level of commitment that this customer has shown towards your organization since they've been on-board.

With these points in mind, one could argue the ROI of such a request with the internal Product Management teams. Internally, you'd need to evaluate the long term implications of developing such a feature. Does this feature have widespread requirement? Would this enable your sales team to close more deals? How well does this new ability resonate with your other customers? and finally, is this feature a logical extension of your company's vision for the product?

There's no Yes or No answer to such a situation. It'll all depend on the outcome of all the above mentioned scenarios.

This is a tricky situation. While on one hand, this might seem like easy money. Your team wouldn't have to spend too much time making this happen, but you know for a fact that this won't be helpful for the customer in the long run. Here's how I choose to answer this question:

It's critical to understand the end goal that the customer is trying to achieve. At times, the goal itself may be irrelevant and you as an RM would have to politely educate the customer of the long term implications of such a goal. Contrarily, you could leverage this opportunity to prove to the customer that you're not just in it for the money, but for a long term partnership based on trust and ethics. You'd have to give the customer the complete picture of why you think this wouldn't be a wise investment of their money. Here, it's very important to suggest alternatives to your customer, if you think that their need is genuine, but the solution approach needs to be changed.

Remember, you might gain this extra money today, but potentially lose your customer in the long run.

Here are some of the ways that I've experimented with:

1. A bi-monthly newsletter highlighting some specific features of your solution. The audience would be the end users.
2. Sharing a new release video with your end users.
3. Creating a custom video for your users talking about the overall benefits of using your solution.
4. Usage analysis to gauge end user adoption of your product. Identify the power users and encourage them to work with their un-adopting peers. Offer a small reward or recognition in return for helping you.
5. Offer quick training on specific features.
6. Engage with both the top level management, and the end users, all the time. Make sure you're all on the same page.
7. Keep an eye for growing the footprint, and any other competitor lurking in the background. Make friends with the end users who wouldn't hesitate to give you some of the internal details of conversations.

This is an important question, as there are many misconceptions about software and CRM in particular. Besides some fundamentals, like data security and access and ease of use, CRM will primarily help you do what you do anyway, but move it to the next level. If your main focus is customer service, CRM will help you monitor, deliver, and measure your effectiveness. If your goal is a flat organization where the right hand knows immediately what the left hand is doing, CRM will help you be informed about the customer's world and not just what relates to your department or team.

SFA is the application of technology to manage selling activities. It standardizes a sales cycle and common terminology for sales issues among all the sales employees of a business. It includes the following modules −

Product Configuration − It enables salespersons or customers themselves to automatically design the product and decide the price for a customized product. It is based on if-then-else structure.

Quotation and Proposal Management − The salesperson can generate a quotation of the product prices and proposal for the customer by entering details such as customer name, delivery requirements, product code, number of pieces, etc.

Accounts Management − It manages inward entries, credit and debit amounts for various transactions, and stores transaction details as records.

Lead Management − It lets the users qualify leads and assigns them to appropriate salespersons.

Contact Management − It is enabled with the features such as customers' contact details, salespersons' calendar, and automatic dialing numbers. These all are stored in the form of computerized records. Using this application, a user can communicate effectively with the customers.

Opportunity Management − It lets the users identify and follow leads from lead status to closure and beyond closure.

A business needs to consider the following points while selecting a CRM software −

► Business strategy and processes − It helps to automate a customer management strategy. Hence before selecting a CRM software, a business should be clear with its strategies and desired processes.

► Business requirements − CRM systems range from domain specialty solutions that focus on solving a specific area such as sales force automation, marketing automation, services automation, partner management, etc., to complete enterprise management solutions.

► Size of business − Small businesses require tools that are easy to learn and can handle a wide range of the most common tasks. Large businesses opt for applications that handle more complex tasks and thousands of users.

► Customer base − The size of the customer base a business is required to handle.

► Budget − A business needs to set a budget prior vendor selection. The budget allocated for CRM varies according to the degree of customization required.

► Context − The context in which a business is functioning, e.g., B2B or B2C, determines which CRM the business should go for.

► Sales channels − The sales channels a business is employing: Direct sale, channel sale such as distributors, or Direct to customers via retail. They matter while selecting the most suitable CRM software.

► System integration − All the interfaces the business needs and the CRM vendor can support without requiring too much custom services effort.

► Strength of partners − The partners must be able to provide a business with additional support, or help to implement the CRM successfully.

Today's customers are empowered. Empowered customers are those having the control to buy goods or services from a business when and where they want it, by selecting from a vast range of available choice. Empowered customers access the Internet and collect information about products, dealers, and prices. They take advice from friends or at times from strangers too, before making a buying decision.

By using various digital devices, they can find out the specifications of a product or service before arriving at buying decision. They are smart and alert buyers who also keep high expectations. When a business fulfills most of the expectations, the empowered customers can be loyal to them.

Let us analyze the phases a customer goes through when a business offers products/services to the customers.

They opt for the best technology products rather than less cost, good quality, or performance. They are technology-conscious as they find using products with latest technology would sustain in the ever-changing technological environment. These customers have detailed eye towards technical aspects of a product and tendency to interact with other customers of their type. They are also satisfied customers and tend to maintain healthy relationship with supplier.

Having a senior management level sponsorship between the two companies from the very beginning always helps alleviate issues like this. It's normal to bend over backwards in such cases and offer price discounts, free training sessions, and complimentary consulting services to retain such accounts. It's important that you engage with both the top level and mid level management in such cases. This becomes a selling opportunity and not a retention opportunity. You'd need to resell the value of your product all over again. It's important to re-evaluate the problem points you're trying to solve, and then present the solution again. Identifying new sponsors within the customer account also helps.

Such accounts have to be handled with Kid Gloves. Make sure this is a high touch account that's given highest levels of priority and only the best service. It's important to engage your champions and sponsors in helping you identify new champions. Encourage a peer-to-peer discussion to spread the word about your products and services within the extended groups. Frequently reach out to such new sponsors and restate the value proposition that the other groups are leveraging. Make your communications relevant for the audience and connect at a level that's most important to them.

Successful CRM is about competing in the relationship dimension. Not as an alternative to having a competitive product or reasonable price, but as a differentiator. If your competitors are doing the same thing as you are (as they generally are), product and price won't give you a long-term, sustainable competitive advantage. But if you can get an edge based on how customers feel about your company, it's a much stickier-sustainable-relationship over the long haul.

Customer Life Cycle is used to describe the phases through a customer goes. Here are the important stages of a customer life cycle −

► Reaching − It is the phase where a business communicates with its target customer. It is mainly done through advertisements.

► Acquisition − Attracting and influencing the target customer. The marketing team decides the scope of the target audience and convinces the customers about the benefits of its products/services.

► Conversion − It is when customers decide to purchase a product or service.

► Retention − In addition to flawless products/services, the business offers some extra facilities to the customer such as priority treatment, beautiful store ambience, free parking, etc., to retain existing customers.

► Inspiration − To inspire a regular customer into a loyal one by establishing a sound relationship. When a business puts efforts on providing polite and quick service, personal attention from the staff, knowledgeable sales staff, then the customers are automatically inspired to buy a product/service from a particular vendor.

Customer Life Cycle
Let us now try to figure out what differentiates a customer from a consumer.