Multiple communication channel - This is one major factor of CRM, which enables business to be responsive to the needs and desires of its customers. CRM solutions provide better utilization of all communication channels in company. The various communication channels are:

• Web channel - This supports a number of customer service and customer account management activities. Customers can verify and browse product descriptions and also report problems through this channel.
• Fax channel - Company can use this channel to generate fax that is sent directly to customers, while customers use this to submit requests for information and contact.
• Interactive TV channel - Cable TV companies interact with customers through this channel.
• IVR (Integrated Voice Response) - This channel answers all incoming calls from the toll free network, and also provides guidance through use of prompts.
• E-mail - Customers can e-mail their service requests and check status. The company can also use this as outbound channel to distribute information.
• Direct mail - This channel is used primarily for outbound communication to customers. The inbound direct mails are not managed by CRM.
• Direct field sales force channel - Activities like browsing product offerings, capturing leads, completing orders, and performing high level customer care are all done remotely by the agents through this channel.

Database - database of customers is created by collecting information through semi-structured interviews, document analysis of annual reports, organizational charts, and system charts. The information is collected on the basis of strategy and process of CRM. The information thus collected is continuously updated to build up a lifetime relationship.

Workflow and assignment - CRM solutions enhance the customer service by clearly defining the tasks, assigning the tasks to the various departments. The order of carrying out the tasks is spelt out. CRM solutions also monitor the smooth flow of information to support the task and finally keep track of the tasks being completed.

Scalability - CRM applications can be used on a large scale, in terms of number of participants it can handle, and can be expanded to any desired scale.

Privacy concerns - This functionality is one of the major factors in the selection criteria of CRM applications. Those organizations implementing customer facing operational applications, customer intelligence, and customer-centric marketing must give priority to customer privacy issue in deciding the business strategy. Questions like how customers' privacy can come into play during operation and how it is protected in each application need to be answered first before choosing the right CRM solution.

Often it is seen that CRM applications has not brought success to organizations as expected. The failure rate for CRM implementations is as high as 70%. The reasons are:

• Absence of a clear transitional process i.e.. a step by step awareness, a clear funding strategy, and attainable goals is a must rather than introducing sweeping changes all at once.
• The main focus of business is on products' sale and geographical segmentation of market but not on customer segments.
• Key performance measurements are not tracked. Data integration, interdepartmental communication, and good supervision of these processes are critical to success.
• Weak functional organization of a company can cause customer and employees' confusion.
• Short term interests are often given importance. Ethics must be given priority over financial gains. A customer focussed company must be prepared to make recommendations in favor of customers even at the cost of short term interests of the company.
• The financial measures of success are often inadequate. In a customer centric model the branding, research, and development must align with development, compensation, budgeting, and incentive policies.
• Other new technology and solutions are introduced without implementing the necessary framework.