Customer relationship management (CRM) systems provide business owners with the strategy, system and tools to help them interact with their customers. In the late 1990s, the Internet and electronic commerce changed CRM, and a new term, electronic customer relationship management (ECRM), was born. Today there is little difference between the two. ECRM is typically considered to be the natural evolution of CRM and not the separate business strategy it once was.
The Relationship Between Business and Customer
The role of CRM in business is to define the processes and systems that enable a business to form, manage and track relationships and communications with its customers.
Electronic commerce and the Internet contributed to a change in CRM and the relationship between the customer and the business. From obtaining customer support to making a purchase online, consumers wanted options to communicate with a business electronically over the Internet.
ECRM was forged to meet the growing needs of businesses wanting to build and manage Web-based customer communications and support.
Customer Relationship Management (CRM)
CRM is not a new technology; it was a standard business process long before people used the Internet to communicate. The phrase “customer relationship management” is used to mean the strategy used by a business to interact with anyone it conducts business with, including customers, clients and sales prospects. CRM systems define the way a business handles its sales, marketing and support projects to meet the goal of nurturing existing customer relationships and forming new ones.
Traditionally, CRM is a set of processes and systems used in physical business locations, such as offices or a physical retail space (also called “brick and mortar” business).
Electronic Customer Relationship Management (ECRM)
In the late 1990s it was evident that the Internet would change the brick-and-mortar business model. The onset of Web-based communications and electronic commerce (e-commerce) changed not only how business was conducted but also the way in which a business could communicate with its customers.
This change required a business to invest in new hardware, systems and Web applications. There was a need to develop new processes to manage customer relations, marketing, and sales and support using the Web for those business processes.
The terminology was updated to Electronic Customer Relationship Management (ECRM) to reflect the new hardware and systems required by a business to make use of new Web-based technologies, such as self-service customer support, email and online sales.
The Difference Between CRM and ECRM
The lines that once defined CRM and ECRM as two different business strategies barely exist now, leaving the names themselves to be the biggest difference. ECRM was a popular term when the shift to e-commerce and Web-based customer self-service applications was on the horizon, but today, many industry experts believe that ECRM as a separate term is not necessary.
This is because ECRM implies processes that are a natural evolution of CRM. Most industry experts and CRM vendors today do not use ECRM to describe systems, but rather use CRM -- which in newer systems incorporates ECRM strategies, tools and applications.