Published on Quality Digest (http://www.qualitydigest.com)

Customer Relationship Management and ISO 9001Quality Insider Article

Customer relationship management (CRM) usually refers to sales activities, and CRM software is commonly purchased, and occasionally used, to track potential customers, existing customers and sales activities.

“Contract manufacturing is unquestionably a relationship business. CRM must manage the relationshipbringing maximum value to both parties; CRM is and has been key to successful long-termpartnerships. Customers rely on their contract manufacturer for the core of their business, and qualityvalidation, corroboration, open communications and the supplier-customer relationship are critical forsuccess,” says Larry Caretsky of Commence Corp.

According to ISO 9001, manufacturing companies seeking a product definition or answers to service and marketing questions must get such information from their customers. The ISO standard requires companies to establish processes for identifying customer requirements and communicating those requirements throughout their organization, as well as processes for tracking and analyzing customer satisfaction. The standard has direct application for CRM, particularly for contract manufacturers.

Since its first release in 1987, the ISO 9001 quality management standard has been accepted worldwide as a baseline for organizational performance. First embraced by manufacturing companies around the world, this standard quickly became the most widely used of the more than 8,000 standardspublished by the International Organization for Standardization. Because the original set of standardswere based on existing national quality standards, they were nonprescriptive in nature and were designed to ensure compliance with written procedures.

The main criticisms of the first version of ISO 9001 was that compliance wasn’t sufficient to move acompany to world-class status and that management’s role within a company’s quality system wasconsidered minimal. Just as lean manufacturing has the core principle of continued processimprovement, ISO 9001 needed to push companies beyond their maintenance mode.

Responsibility for the quality management system has now shifted from the quality assurance department to top management. ISO 9001 includes management requirements that are designed toensure that customer needs and expectations are determined and fulfilled, that an awareness of customer requirements is promoted throughout the organization and that customer feedback is included in management reviews.

When the current ISO standard was released, the changes ranged from greater customer focus to integration to measurement processes and continual improvement. For contract manufacturers, the ability to determine customer needs and satisfaction were paramount.

Whether industries are yet compliant to ISO 9001 or not, to thoroughly understand customers’ needs isto actively seek out customer feedback and create solutions to meet those needs. Good performanceleads to customer satisfaction, and strong relationships lead to customer loyalty. Customer satisfactionis great if it results in customer loyalty. Satisfied customers feel good and still may be lured by a

competitor. Loyal customers will stick with their suppliers over the long term.

Commence Corp. has conducted intensive financial analyses regarding the cost of customeracquisition vs. the cost of retention. The results have shown that keeping customers is always a moreprofitable strategy. Caretsky notes that one of the critical roles of cost-effective CRM solutions for themid-range manufacturing organization is creating “. . . [L]oyal customers, which lead to lower marketingcosts, increased revenues, more referrals and a better understanding of how the company canimprove performance.”

CRM evaluation criteria must provide the basis for a meaningful and objective CRM software comparison. The comparison factors may include sales force automation, marketing and customer support, as well as functionality requirements, technology utilization, user support, price and value criteria to demonstrate company requirements based on the quantifiable measures that are establishedas part of the documented ISO 9001 procedures.

CRM functionality and ISO 9001 are increasingly integrated as both promote a better understanding of customer requirements through open communication, as well as establishing processes for the measurement and analysis of customer satisfaction and loyalty.

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Source URL (retrieved on 08/18/2008):http://www.qualitydigest.com/inside/quality-insider-article/customer-relationship-management-and-iso-9001.html