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What Is Customer Relationship Management (CRM)

what is customer relationship management

Are you struggling to get new customers or retain existing ones? What is a CRM system? Customer relationship management software is a system that defines how an organization interacts or engages with current and potential customers.

The most successful businesses in the world have put in place robust measures that enable them to interact with their customers and target audiences professionally. The main goal of embracing a CRM system is to improve business relationships.

That is, CRM allows the company to enhance its profitability by streamlining processes that were previously not well defined. With this system in place, you will always be connected to your customers and this will, in turn, prevent them from going to your competitors.

Types Of Customer Relationship Management Software Available Today

The businesses that deliver the most value today is that which offers personalized experiences to their customers. A CRM system will help you manage customer expectations. Moreover, the CRM system helps businesses remain relevant in this highly competitive business environment.

Did you know that there are different types of CRM systems? Here are the types of CRM you can consider for your brand:

Operational CRM
Operational CRM systems help to streamline by automating a variety of business processes such as service, as well as sales and marketing. If you are looking for a system that will help increase the number of leads generated, then an operational CRM is what you need.

Moreover, it will help convert the leads, capture all the required details, and provide service throughout the customer’s lifecycle with your business.

Analytical CRM
An Analytical CRM system is meant for marketing, sales, support personnel, and top management. It is purpose is to determine the best way that the business can serve its potential and existing customers. Its main function is to handle and carry out data analysis.

It will analyze every piece of customer data sourced from various touchpoints to get insight into the current status of the business. These are the features of analytical CRM:

  • Gathers the customer information from a variety of sources
  • Presents the data in structured formats
  • It analyzes the key performance indicators

Collaborative CRM
Collaborative CRM is also known as Strategic CRM. It helps the company share customer information among different departments and units. For instance, the data generated from sales and marketing activities could help the top management plan for future business activities.

Communicative CRM
The communicative CRM caters to handling communication between you and the customer. The CRM integrates well with other communication software such as email and social media. It is also useful for enhancing interdepartmental communication within the organization.

For instance, if a customer received your newsletter, then they can be retargeted with a phone call or text message.

8 Factors to Consider When Choosing a CRM System

  • Look at the features and functionalities that you require
  • Make sure that the software is compatible with other existing applications
  • CRM Deployment: Cloud or On-premise
  • Ask the vendor to demonstrate how it works and a free trial to be sure that it is ideal for your business
  • Go for industry-specific vendors who have local partners if your industry is specific
  • Confirm if customization and training is offered
  • User experience
  • Make sure that the system has GDPR Features

Who Needs a Customer Relationship Management System?

what is customer relationship management

This is one of the most common questions that we get from our readers. Simply put, CRM can work with perfection in the sales department, customer service, recruiting team, digital marketing team, business development or any other business. We dare say this because a holist CRM offers a better way to manage the external interactions as well as relationships thereby driving success.

To achieve this objective, the customer relationship system allows businesses to store existing and potential customers' contact information, record service issues, identify sales opportunities and manage marketing campaigns, all in one central point.

This information can also be made available to all the departments or specific people in the business based on their rank and roles. Note that increased access to this information increases productivity by enhancing collaboration between individuals and departments.

Benefits of A Robust Customer Relationship Management System to Businesses

Any company that is keen on providing superior customer experience should consider investing in a sound, accurate, and current CRM. Here are the 8 primary benefits that a robust customer relationship management system offers to businesses.

  • Improved client relationships
  • Facilitates cross-selling
  • Increase team collaboration
  • Increased profitability and revenue
  • Cost savings
  • Reduces client attrition
  • Staff satisfaction increases

Developing A CRM Strategy for Your Business

CRM software has come a long way and they are an integral business tool. However, the CRM software can only do so much. Studies show that more than 40% of businesses today are not using their CRM software in the right way.

Data analyst, William Band, surveyed 150 companies and found that 18% of them were not getting the most utility due to inadequate strategies. Here are five tips to help your company develop a winning CRM strategy:

1. Set a Goal

The most important thing when creating a CRM strategy is to ensure that it meets the business’ goals. Smart goals will help you in making a plan that will not only dictate the use of the CRM but other business tools as well.

2. Prioritize Your Customers

Customers are not equal, and your CRM strategy ought to help you prioritize those customers that are most beneficial to your business. For example, returning customers are far more valuable than new customers since they can spend twice as much on average.

3. Communicate with Your Employees

While the CRM software is set up to collect and handle large amounts of data, your employees will make all the difference if you are to achieve your business goals. For this reason, you ought to involve the employees in every step of the CRM strategy.

Employees who are invested in the direction of the company will be able to set up policies and activities that help it reach the goal.

4. Spread Out Your Changes

If some parts of your strategy are not working as expected, ensure that you get to the root of the problem first. Most people rush to overhauling the whole strategy and this can cause much bigger problems.

The changes could negatively affect employee productivity or communication with the customers. So, make the changes gradual and timely.

5. Track Customers Before the First Contact

If you only start tracking your customers after they have made the first contact, you are not fully utilizing the CRM software. Also, this could be the reason why you are not getting as many leads as you expected.

You need to prepare for the initial contact by using the CRM to catalogue what kind of information prospective customer shares on social media. This way, you will know what your customers need today and in the future.

6. Sync Your Customer Communication Channels with the CRM

The advanced CRM software used today has built-in programs that offer the same or better functionality as those of the often-used apps. However, if you do not have the privilege, you can sync your applications to the CRM software.

Finally, you need to evaluate and improve the CRM strategy. Be sure to learn what works and what does not work. By itself, a CRM will not do much for you, but a robust CRM strategy will help you achieve your business goals.

5 Important Questions You Should Ask Yourself Before Buying

what is customer relationship management

  • How much can we afford to spend on the CRM software?
  • Which other software do we need to integrate with the CRM system?
  • Which workflows and operational processes do we need to add?
  • Which are the most complicated and inefficient processes in the company and how will the CRM system resolve them?
  • How many employees or departments are going to use CRM software?

Conclusion

Indeed, businesses and organizations that want to scale up cannot afford not to invest in a customer relationship management system. The benefits surpass the initial cost and once every member of the team learns how to use it, you will start to notice improvements in all processes.

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