Glossary of the CRM terminology provides information about key words and phrases which are used by CRM professionals in their day-to-day work.  The glossary is supposed to help students who have been studying  concept of CRM at the universities as well as those who are already engaged in working with various CRM tools. The list of terms is being updated constantly. If you have any suggestions, please, submit your comments below.


What is CRM

Customer relationship management (CRM)
CRM is the initiation, enhancement, and maintenance of mutually beneficial customer and partner long term relationships through business intelligence generated strategies based on the capture, storage, and analysis of information gathered from all customer and partner touch points and transaction processing systems. CRM is a process that maximizes customer value through ongoing marketing activity founded on intimate customer knowledge established through collection, management, and leverage of customer information and contact history.
B2B stands for business-to-business commerce involving interactions with business firms, institutions, and government agencies that may consume or resell these products or services
B2C stands for business to consumer commerce involving sales to individual or household markets for their personal consumption.
Enterprise resource planning (ERP)
ERP is a business management system that integrates all facets of the business, including planning, manufacturing, sales, and marketing.


Types of CRM

Analytical CRM includes predictive analysis, data mining, segmentation applications, and so on. Virtual communities are a social network of individuals interacting and focusing around a particular interest (e.g., companies and brands) and sharing information through SNS, BBSs, and chat rooms.
Operational CRM consists of the automation of processes such as sales force automation, campaign management, and so on.


History of CRM

Social Media can be defined as an online mass collaboration environment where content is created, posted, enhanced, discovered, consumed, and shared, participant to participant, without a direct intermediary.


Companies which use CRM

“Bricks” and “clicks” refers to stores and kiosks (bricks) and ATMs and the Internet (clicks), which are two different company distribution strategies. Very often, the highest-value cus­tomer segments use multiple channels for shopping and purchasing; therefore, companies may need both bricks and clicks.
Kiosk is a booth providing a computer-related service, such as an automated teller machine (ATM).
Partner relationship management (PRM) is a business strategy for improving communication between companies and their respective value delivery network partners.
Silo is a term frequently used to describe a vertical hierarchy organization structure that is based on specific functions. Silos can inhabit communication and efficiency due to the respective reporting and procedure policies.
Value delivery network (often referred to as value chain) is a group of organizations linked together in order to produce and market products and services for ultimate consumption.


Value for Customers

Value equity is the customer’s objective evaluation of the firm’s offerings. The main drivers are quality, and convenience.
Brand equity is the customer’s subjective view of the firm and its offerings. The main drivers cognitive and affective components: awareness, knowledge, liking, and preference.


Types of Customers

Household can be defined as those individuals who make up a consumer family (including nontraditional or extended) who live at the same location. A business household is comprised of employees who work in the same organization, but the actual group of employees may vary by organization entity, department, or location.


Types of Relations

Hierarchy of effects model is a useful heuristic for measuring a customer’s relationship with a brand. It consists of cognitive components (awareness and knowledge), affective components (liking and preference), and conative or action tendency components (intention to purchase and purchase behavior).
Humanistic bonds is a retention strategy based on superb treatment given customers by highly trained personnel.
Idiosyncratic-fit is the tendency for customers to be enticed and attracted to offers for which they feel they have a relative advantage.
Programmatic bonds is a retention strategy consisting of rewards programs and procedures that make it difficult for customers to switch providers.
Relationship equity is the bond that exists between customers and the firm and its offerings. Drivers of relationship equity are loyalty and commitment?
Relationship management strategy utilizes marketing orientation tactics. It is more about how the buyer and seller can attain a mutually profitable relationship with long-term strategic implications for both parties.


Customer Acquisition

Acquisition/defection matrix is a matrix indicating to whom a company is losing its customers and from whom it is gaining them.
Defection curve is a graph that depicts how responsive a company’s profits are to changes in customer defection rates.


Customer Retention and Development

360-degree view refers to a consistent view of the customer from beginning to end of the relationship available to all. The customer data must be integrated from all business areas, including billing, customer contact, marketing, and sales.
Cross-selling is a marketing and sales strategy focused on selling related products or services to customers.
Mass customization is a manufacturing and communications technique companies use to produce individually differentiated goods or messages on a mass basis, usually through technological means.
Personalization exists when the customer is a creator or co-creator of website content. Personalization occurs when a customer modifies a company’s website to suit his or her own purposes.
Share of wallet refers to the proportion of category value the customer spends with the company. Share of wallet measures the amount a customer spends with your company compared with what he or she spends in the entire category.
Suppression is the exclusion of an individual or household, either business or consumer, from being input into a process dependent on relative criteria, such as suppressing deceased consumers from a marketing promotion.


Customer Termination and Win-Back

Win-back strategies are strategies to win back customers who have given notice to terminate or have ended the relationship


Customer Journey

Customer’s experience cycle is a customer’s satisfaction with a company’s field sales staff, website, public relations programs, marketing campaigns and communications programs, service, call center, channel members, and so on.
Customer-business life cycle consists of a number of stages, including acquisition, development, retention, and win-back.
Hard standards are specific rules and policies that govern an employee’s action with the customer. Hard standards ensure compliance with the organization’s CRM strategies but inhibit the employee from customizing the action in an effort to optimize the specific customer engagement.
Touch point is any point of contact that a customer or prospect has with the company, including phone inquiries, Web applications, e-mail, outbound advertising and promotion, direct sales contacts, CCC interactions, fulfillment centers, merchandise return desks, or in-person transactions. If we extend the meaning of customer to include suppliers, distributors, dealers, employees, and so on, the notion of a touch point can be extended to “transaction processing systems.”


Customer Lifetime Value

Customer equity is the sum of CLVs of all the company’s individual customers minus company expenditures (including non-directed acquisition costs) discounted to a net present value. It is driven by value, brand, and relationship equity.
Customer lifetime value (CLV) is the net present value of the future profits to be received from a given number of newly acquired or existing customers during a specified period of years. CLV is calculated by identifying the revenue stream over time, applying a retention rate for each year, subtracting relevant costs, and then applying a discount rate to gross profit. CLV takes into account how much the customer spends on each purchase with the firm and the resulting profit, how often the customer purchases from the firm, how likely the customer is to remain a customer in the future, how much it costs to serve the customer, and the organization’s discount rate.
Exogenous variables is a term used to define those variables that may have a positive, a negative, or no impact on an organisation.
Past customer value extrapolates the value of a customer’s past transactions into the future. The problem with this approach is that a high-value customer in the past may have been merely “transactional,” and projecting high past value may seriously overestimate future value.
Second lifetime value (SLTV) is the second lifetime value that can be computed tor a lost customer after a company recaptures or regains him or her.
RFM stands tor recency, frequency, and monetary value and is an approach to compute a score for each customer based on how recently the customer purchased, how frequently the customer purchases, and how much revenue or profit the customer generates. The score is used to predict the customer’s likely response to future marketing expenditures and efforts.
Pareto principle is also called the iceberg principle. It says that the top 20 percent of your customers account for 80 percent of your profits.
Past customer value extrapolates the value of a customer’s past transactions into the future.



Marketing operations

Database marketing develops targeted promotions to customers and prospects based on the likelihood that they will respond to the tailored messages and establish long term ties with
the organization.
Defection analysis is a highly useful marketing research technique whereby customers who are defecting are interviewed to understand their reasoning. The interview can occur naturally during the course of closing out the account. Reasons for dissatisfaction and defection are often very specific, and, therefore, they can easily be acted upon.


Marketing Software

Knowledge management (KMD) is a methodology that allows for the solicitation of knowledge from experts to be placed in a repository made accessible to people who need that knowledge.
Lead management software provides the salesperson with a method of managing all potential sales leads. It allows the flexibility for sharing of sales lead information among other sales-people as well as management.


Sales Force operations

Sales force automation (SFA) is a methodology that leverages software and hardware to automate sales tasks of lead management, contact management, information sharing, inventory monitoring and control, order tracking, customer and prospect management, managing the sales cycle, providing sales forecast analysis, and salesperson rewards and performance management.


SFA Software

Computer telephony (CT) is hardware and software technologies that enables communication of voice and information via the phone.
Radio frequency identification (RFID) is a technology that consists of an antenna and a transceiver that the radio frequency and transfer the information to a processing device, and a transponder or tag that is an integrated circuit containing the RF circuitry and information to be transmitted.


Customer Service operations

CCC is a customer contact center—formerly called a customer call center—that, in addition to incoming and outgoing company telephone calls, handles e-mail, Web, wireless, and written interactions with customers. CCCs may handle sales, service, and customer care.
CEC is the customer engagement center, a more recent term for the CCC.
CSR is a customer service representative generally working in a CCC.
SLA is an acronym for service-level agreement. An SLA is a contractual arrangement whereby a buyer and a provider of services agree to perform certain levels of service. The buyer and seller both have obligations, but it is usually the seller or provider of service that bears the brunt of the agreement.
SERVQUAL is a 22-item instrument for assessing customer perceptions of service quality.


KPI for Analysis

Key performance indicators (KPI) are metrics that define and provide insight into a company’s degree of financial and competitive success. Some examples of KPIs are cost per customer, customer retention rate, customer satisfaction rating, customer share of wallet, and customer lifetime value.


Analytical software for CRM

Algorithm is a set of rules used to solve a problem or define an opportunity through a finite number of steps.
Dashboard similar to an automobile dashboard, is a graphical user interface-based oftware display of key information summarized to facilitate decision making via a series of charts, graphs and so on.
Cloud-based portals are entry points into a network from various locations using multiple devices and software for the purpose of accessing information that is stored in optimal locations on different hardware and electronic devices providing for access through the Internet or other electronic grid network. An example would be the ability of having any update made to an Apple iPhone automatically-sent to an Apple-supported server elsewhere (such as an iPad).


Relational Databases

Data mining is the process of using statistical techniques to uncover patterns, trends, correlations, or other relationships among variables in the data warehouse or data mart. Data mining involves sophisticated software containing statistical analysis tools.
Data warehouse is the repository for all relevant customer and prospect information. Almost anything related to a marketing activity can be included in the data warehouse, including information from each touch point, sales force input, and perhaps even survey data. It is a collection of databases in one database that contains all relevant customer (primary and secondary data) information, including history, product information, product return activity, marketing promotion, and campaign data.
Data marts are subsets of a data warehouse that contain less depth or breadth of information, which allows for more efficient analysis by functional, business unit, or geographic divisions. It is generated from data gleaned from a specific function.
Batch process is the noninteractive execution of predefined software steps that act on files and databases. Each step usually creates predefined outputs, some of which may be simple changes to the inputs.
Operational data store (ODS) is a database designed to allow quick read / write access to and from multiple sources and types of technology dynamically. It contains a limited amount of information, which is usually required for a specific customer interaction such as a product purchase order. It is used as a source of data to update other databases such as data warehouses and data marts.
Relational databases are accumulated computer-based data that is arranged to facilitate retrieval, making it possible for companies to identify, access, manipulate, and share customer information across departments. A relational structure integrates data across multiple tables, based on data already existing in the tables.


Data mining

Cluster analysis is a process that segment a heterogeneous population into subgroups, or clusters, using no predefined classification.
Chi-squared automatic interaction detector (CHAID) is a technique used to build decision trees based upon a relationship between dependent variables and a series of prefictor variables.
Classification and regression trees (CART) is a technique that creates a classification or regression tree based upon whether a dependent variable is numeric or category.
Data mining is the process of using statistical techniques to uncover patterns, trends, correlations, or other relationships among variables in the data warehouse or data mart. Data mining involves sophisticated software containing statistical analysis tools.


CRM vendors. Cloud and on premise

OEM is an acronym for original equipment manufacturer (e.g., Intel, Microsoft, Caterpillar, and Whirlpool).


Planning and design of CRM

Middleware is software that allows disparate databases to work as a single integrated database. It allows a company’s various legacy systems to be coordinated with one another to build
an enterprise-wide CRM system.
Legacy systems are historical systems originally developed to serve the needs of individual departments or functions such as sales, billing, inventory, and customer service.
Logical data model (LDM) is a logical view of a database or some file structure.
Master data management (MDM) is the process that insures that customer information is uniform, accurate, complete and up-to-date. MDM records consist of transactional, biographical and social media interactions pertinent to the company-customer relationship.
Materials resource planning (MRP) is a relationship between suppliers and customers oriented toward the reduction of costs and improvement of quality.
Merge/purge is to combine two or more sets of data in such a way that the resulting data has the same organization as the two individual sets of data. During the merge process, duplicate sets of data are deleted or purged.
Reference database serves as an impartial reference, providing links between all captured instances of a customer
Software as a service (SaaS) is a method of delivering software over a network, usually the Internet. A software application company or reseller hosts the software applications, and the applications are made available for use for a fee. Software is not purchased.
Transaction processing systems consist of inventory, order entry, billing, and accounts receivable information.


Configuration and adaptation of CRM

Point solutions are CRM systems that satisfy the needs of only a single department or function.
CRM suite is an enterprise-wide CRM solution in the form of a single package or “suite” claims to provide all the necessary CRM functions, such as SFA, campaign management customer profile and value analysis, and CCC programs.
Customer data integration (CDI) enables an organization to accrue knowledge about the customer in a consolidated manner from all possible touch points. It is the process,
managing the customer response or activity related to all possible touch points.


Privacy and ethical considerations

Chief privacy officers are senior-level company executives charged with advocating and ensuring that customers’ and prospects’ privacy rights are maintained.
Consent is explicit permission given to an organization by an individual to handle his or her personal information in specified ways. “Informed consent” implies that the organization fully discloses its information practices prior to obtaining personal data or permission to use it.
Opt-in is an option that requires a person’s explicit consent for the use and disclosure of his or ber personal information beyond the original, primary purpose for which it was collected.
Opt-in agreements are when companies ask their customers for permission to open communications. When it is granted, customers are “opting in.” This means they are willing to let the organization market to them, use their data to learn more about them in order to create more attractive marketing offers, or actually sell their data to someone else for similar efforts. They are agreeing to have their behaviour tracked and receive company promotional data.
Opt-out is an option that allows a person to prevent the use and disclosure of his or her personal information beyond the original, primary purpose for which it was collected.
Phishing is the art of tricking people into divulging confidential information by using unsolicited e-mails disguised as reputable correspondence from banks, credit card companies, or companies the consumer is familiar with.
Opt-out agreements are when companies provide their customers the option to terminate communications at any time. Companies must manage these agreements to prevent other areas of the company or other value chain members from contacting the individual.
Permission-based marketing is when a firm asks a current or prospective customer for permission to contact and make product offers (usually via e-mail).
Privacy policy is a description of a website’s practices with respect to its collection and use of information