What is a CRM?
Customer Relationship Management, in a nutshell, is a strategy of dealing with customers and managing your relationships with them on a daily basis. It entails knowing more about them than just the demographic data, such as learning their needs, interests, and behaviour to establish stronger relationships with them today and in the future.
In most cases, CRM creates a kind of bond between the business and the customer that becomes beneficial to both parties. For instance, CRM allows the National Football League (NFL) owner liaison companies to address the special needs of the NFL team owners during high-profile events like the Super Bowl. Through their CRM system, NFL owner liaison companies can identify NFL team owners who prefer to walk to the venue, drive a car to multiple events, or need handicap access. Their excellent service made these teams want to work with them on a regular basis.
Why do you need a CRM system?
While CRM can be done manually or face-to-face – conducting mall surveys or telemarketing – implementing CRM in this manner can be inefficient because of the sheer volume of customers. Collecting, storing, and analysing their information manually will take an exorbitant amount of time.
Also, since most transactions today happen online, a digital CRM would be most appropriate choice. This is the reason why many companies have turned to CRM software to gather information automatically, allowing their employees to focus their efforts on developing sales schemes from such data instead of doing data gathering themselves. Thus, technology has become the foundation for effective and efficient CRM implementation. Without a CRM system, you might not be able to achieve your business goals within the budget and timelines you’ve set.
CRM involves six stages: information collection, information storage, information retrieval or access, analysis, marketing, and improving customer experience (CX). All CRM systems have the objective of achieving these stages, depending on the type of solution you acquire.
- Information collection allows you to gather data that will identify your customers and classify them according to their behaviour.
- Information storage allows you to save all these data in a central database that you can access anywhere. This way, you are sure that you have updated and synchronised information.
- Information retrieval enables your staff to access the data anytime in the format that’s most useful to them.
- Customer behaviour analysis helps you mine data and identify relationships and patterns that you can use to create customer profiles and marketing strategies.
- Marketing or targeting allows you to identify and understand your group of customers who are bringing in the profits so that you can create more value for them.
- Improving customer experience (CX) allows you to address the concerns of the opposite group of customers who have problems with your company, and turn their complaints into business opportunities.
CRM solutions come in many forms, but they fall into four general categories:
These are recommended for small businesses with a limited budget and minimal needs. They are basic systems with standard software components, which deliver basic CRM processes like information collection and storage. You can buy them as is and incorporate into your office system; they are usually plug-and-play. If you need an inexpensive CRM application, this will work for you. Just don’t expect too much from it. You get what you pay for, after all.
Companies with complex needs but have no in-house capability to implement a CRM system can turn to application service providers for help. Their systems have been built and tested, ready for implementation, so your CRM system need not be created from scratch. They also have IT specialists who can assist you. The downside is that you may not be able to tweak the system for some of your unique needs. If you’re into e-commerce, this is a good solution.
Managed solutions are a marriage of outsourced and custom solutions. Instead of getting a proprietary system from application service providers, you rent a suite of custom CRM programs tailored to the needs of your organisation. While these offer flexibility, their functions may not be adapted to your system 100 percent. These systems are recommended for large companies with complex structures.
As you may have guessed, this is the most expensive and time-consuming solution. You’ll have software engineers and IT consultants building your system from scratch. You have to specify everything you need, outlining the ideal results you want. They will make sure to create a system tailored to your instructions and will undergo a series of tests with you until they get the right outcome. It’s tiring to think about the system design process, but if your software engineers get this right, your CRM system will be the best there is.
Importance of CRM to a Business or Organisation
Knowing now how customer relationship management works, do you think your company will gain from it? If you’re not convinced at this point, here are some of the advantages of a CRM system.
- Easy Tracking and Analysis – CRM systems provide historical data about a current customer or lead. It contains every detail about your customer that you can use to analyse their actions concerning your product or service. With a historical view, searching for and correlating various information becomes easy for you, helping you determine the profit potential of a customer.
- Better Targeting – A CRM system classifies your customers according to specific aspects. For example, it groups your customers according to location, occupation, income range, nature of business, nationality, and others. This makes it easier for you to target promotions or messages to specific groups that would benefit from these messages. Many companies assign a manager to each group who will focus on addressing the group’s needs and preferences.
- Nurturing of New Customers – Once you’ve identified a new customer, you mustn’t lose time keeping this customer within your turf. Maintain correspondence with your customer and create business opportunities with them at all times. With an integrated CRM structure, you can do this efficiently. The system helps your sales, marketing, and PR specialists follow up leads and turn them into buyers or consumers of a service.
- Cost-effective – This is the most important feature of a CRM system. Successful CRM is anchored on technology (CRM software and apps), so there are less paperwork and manual processes than traditional sales and marketing methods. You would need fewer workers and resources for your CRM implementation. CRM technologies are also relatively cheap and streamlined, helping you save time and money in the long term.
- Personal Approach – CRM allows you to customise communications and package products based on your customers’ preferences and requirements. It also helps you reward your most valuable customers and enhance the satisfaction of new ones. A personal approach increases retention and loyalty.
Capitalising on CRM to heighten customer engagement and service delivery will definitely improve your business’ customer satisfaction levels and brand reputation. This, in turn, will usher in more sales and profits, as well as increased customer engagement and brand loyalty. With the right CRM solution, you can expect significant growth for your business over time.