Customer relationship management (CRM) refers to a variety of software tools and programmes that assist businesses in organizing and managing customer data, as well as improving the customer experience with a brand. When a company maintains a relationship with its customers both during and after a project, it often leads to customer retention and attracts new customers. Learning about CRM can help a business implement better customer service practices and use data to retain existing customers. In this article, we answer the question “What is CRM?” and look at what it does, as well as the steps to developing a CRM strategy and some of the benefits of using one.
What Is A CRM?
The answer to “What is a CRM?” is that it is a technology that a business uses to foster, build and maintain relationships with existing and new customers. When a brand uses a CRM strategy, it primarily focuses on establishing connections with customers. Effective CRM builds customer loyalty and brand awareness. Often, CRM companies create company-wide plans and provide an enriching and satisfying experience. Usually, companies use CRM to manage their customer service, sales department, operations and marketing.
Some processes that a CRM helps with are creating a target customer profile, automating customer service features, sharing marketing materials and tracking shopping habits. Today, companies prefer using cloud-based approaches because companies can transfer the same services using a secure internet domain rather than downloading the application onto several computers.
What Does A CRM Do?
Apart from helping companies maximise sales effort and customer communication, a CRM performs various other functions, such as:
Consolidate data into one location
A CRM software helps centralise your customer data so that everyone in the organisation can access the information they require using a single platform. From saving customer contact information and communication history to customer history, the data helps customer service executives deliver exceptional services to existing and new customers. These data points can help a business in marketing initiatives. It also helps in offering personalised customer service. Also, when a company makes the customer database available to everyone, all employees know the history of customer’s interaction.
Track and review profits
CRM software is an excellent tool for tracking business and customer profitability. As it collects information and sales figures over time, companies review profits and gain a realistic picture of the customers’ spending habits and the company’s finances. CRM increases profit through higher sales conversation rates. As businesses keep track of their mistakes, maintain detailed notes and manage customer profiles, it improves the business’ ability to generate more sales and profits.
Enhances marketing initiatives
CRM is an excellent tool for helping customers find their business online. Modern and cloud-based CRM integrates many marketing tools. It helps marketers create landing pages, advertisements and email nurturing campaigns to move forward in the sales funnel. When the marketing team has access to sales interactions, they can determine what marketing strategy and advertisement resonate with the prospective customers. Also, as CRM captures a wealth of valuable data, the marketing team uses the data to nurture prospects into customers.
Manage business practices
Using a CRM, companies can understand the customer engagement level for specific products. This helps understand what changes a business can bring to their strategy for more customer engagement. As most CRM software allows customisation, companies use the software to send reminders and automated emails. When companies stay in touch with customers using a CRM, they can track whether they are opening and reading their emails.
Offer better customer support and increase referrals.
Today, digital customers require personalised support 24/7, which is precisely what a CRM helps achieve. As customers can see what products they order, they can record every transaction. This helps customer service agents give customers the answer they want without wasting time. When a service executive understands a customer better, they can upsell and cross-sell different products. Apart from giving businesses a chance of attracting new customers, excellent customer service encourages existing customers to refer the brand to their friends and family members.
Why Do Businesses Use CRM Software?
Most businesses use CRM software because it helps in understanding a customer in-depth. A business uses a CRM because of the following reasons:
- Customer satisfaction: Having access to customer data helps businesses address customer concerns and questions. This ensures increasing customer experience.
- Earning profit: Companies can use CRM to derive data-backed decisions. This can help create customised marketing plans and product offerings, leading to higher profits.
- Faster processes: The CRM provides automation features, saving time for customer service representatives and marketing executives. They can spend the saved time creating an improved experience for the customer.
- Ensures segmentation: CRM software helps the marketing and sales team segment customers based on location, age and income level. Marketers use this segmentation as a critical marketing tool.
- Attracts new customers: Most modern-day CRM programs can help marketers identify potential customers and convert them into loyal customers. A CRM program can achieve this because of the lead module feature.
- Builds strong rapport with customers: As a CRM is responsible for managing intricate details of the sales transaction and customer journey, it gives the marketing and customer service team to build rapport with customers.
- Allows easy access to information: When all teams in an organisation can access data from a singular database, managing and keeping critical information becomes easy.
- Ensures a smarter sales approach: CRM software helps a company reach its target by closing more deals. As a result, companies widely integrate their business with CRM software.
- Provides detailed analytics: As most modern-day software has built-in analytics capabilities, breaking information into practical items becomes easy. These analytics help a company judge the success of its marketing campaign.
- Ensures accurate sales forecasting: A CRM software offers automated sales reports to help identify critical trends. It also gives businesses an idea of what to expect from future sales performance.
- Enhances communication with prospects: As CRM can alert an employee about the right time to reach out to the prospect, it helps in enhancing communication.
How to Develop A CRM Strategy
Here are a few steps a business typically follows to create a CRM strategy:
1. Define your goals
Before using CRM software, refer to your organizational mission to create a specific CRM goal. It helps define the purpose of using a CRM and ensures the company stays on track with every business decision. Some goals of the CRM strategy can increase workplace productivity, customer retention, lead conversion, and customer satisfaction. As the CRM goals are subject to change, it is essential to visit your CRM strategy goals regularly.
2. Create a target customer profile
To effectively use a CRM, it is essential to create a target profile of the brand’s customers. When creating a target customer profile, keep in mind the customer’s demographics, challenges, hobbies, dislikes, interests and aspirations. For creating an effective CRM process and strategy, send customer surveys and analyse the information to make an educated decision. In this second step, you get to know why a customer purchases from you and the reason for making a purchase.
3. Convert prospects into loyal customers
Next, have a strategy that helps engage potential customers and convert them to loyal customers. The company can decide this based on customers’ habits and interactions with a brand. As the sales team determines which clients are more likely to convert to paying customers, punching this information in the CRM helps a business convert prospects into loyal customers.
4. Encourage additional sales
After converting prospects into loyal customers, the brand offers personalised product or service recommendations. This encourages customers to upgrade their services and purchase additional products. It also results in more sales and ensures that a brand has a loyal customer base.
5. Retain customers
The next step after generating sales is to retain the existing customers. As the return on investment (ROI) is higher when a company sells to existing customers, retaining them is essential. Providing an enriching experience and building a strong relationship allows a brand to see loyal customers who return for shopping.
6. Analyse the results
There is no point in having a CRM system in place unless you measure its effectiveness. CRM processes that analyse data can encourage positive interaction with customers and build a strong brand presence. So, to analyse the impact of customer relationship management on the business and customers, generate data from it. Search for data trends that can help in optimising the existing CRM protocols. You can even plan for future improvements.