What Is CRM and Why Your Business Needs It

What Is CRM and Why Your Business Needs It

Sick of looking up and analyzing customers’ data with multiple apps? Add CRM to your toolkit.

Short for customer relationship management, CRM is an amalgam of tools and tactics under marketing technology (MarTech). It enables companies to organize and exploit their customers’ data strategically. By analyzing this data, marketers can better understand their customer’s needs and suggest ways for businesses to refine their strategies for better market performance and customer relationships.

If this is the first time you’ve learned about CRM, read on to find out what the technology is and its applications. 

Introducing three types of CRM systems

Picking the best CRM system that meets your business’s needs can be overwhelming because CRM comes in numerous forms, and each serves a specific purpose. That said, CRM systems can essentially be put under three categories. Let’s thumb through each of them below:

Collaborative CRM systems

With more companies keeping a distributed team since the onset of the coronavirus pandemic, collaboration tools, such as Google Workspace and Notion, have become increasingly indispensable. They enable asynchronous work where team members are free to work on their own time without staying online simultaneously. Yet, you need more than those tools to manage your customers and understand their behaviors.

When considering customer service, companies (especially large enterprises) need collaborative CRM systems to give all their teams real-time access to updated customer data. This can ensure that all clients can enjoy personalized services with the data they provide to the companies.

Analytical CRM systems

As mentioned, companies collect and analyze customer data to optimize their marketing strategies and boost their market performance. To make the most of the data compiled, some marketers will draw on analytical CRM systems to analyze and identify patterns in the collected data.

For instance, if a company values client communication, responsible teams can use channel analytics—one of the components of an analytical CRM system—to identify the best way to get in touch with their customers (e.g., email, social media, phone). Communicating effectively with clients can maintain trust between them and the business, which in the long run, helps nurture loyal customers.

Operational CRM systems

The last type of CRM system focuses on automation. Before the advent of operational CRM, workers had to deal with every single business-related matter on their own. That limited the time they could spend on tasks of greater importance or that only humans could carry out, such as client meetings. 

Now, with operational CRM systems, the said tasks are automated to a large extent. For example, once a complaint is settled, the system can automatically send a follow-up email containing a survey to ensure the client is satisfied with the outcome.

So, what can CRM do for your business?

Improved customer retention

Whether you’re selling products or services, your business won’t get far without customers; therefore, it’s no exaggeration to say that customer retention is the key to success. Every company wants to get along with customers and win their continued support, but it is easier said than done. Fortunately, with CRM, these big things can become way less daunting.

Given that CRM acts as a centralized, easy-to-access platform (or database) where companies store customers’ data systematically, companies can personalize customer experience and support. Whenever clients get in touch with the company, the customer service team can retrieve specific segments of particulars from the CRM system (such as purchase history and buying patterns) and tailor the service to their needs. In doing so, customer satisfaction is likely to increase, and you’ll earn a group of loyal customers thanks to CRM.

Enhanced sales performance

Although CRM primarily revolves around customer relationships as its name suggests, it also lends businesses a helping hand in boosting sales performance. Specifically, CRM assists sales teams in making the right decisions.

It may be something that companies hate to admit, but poor sales performance happens from time to time for many reasons, be it a lack of product knowledge or unsatisfactory customer service. Instead of weeping over spilled milk, the sales team should try its best to prevent another failure by joining hands with the right companion, say, a CRM solution. 

By breaking down sales reports with the aforementioned analytical CRM system, the sales team can better grasp which sales models work and make wise investment decisions accordingly to pick up sales performance.

Before committing to using CRM, note that:

A CRM system is sophisticated to use

It’s always nice to try something new, especially if you’re a business leader eager to take your business to a new height. Even so, it’s best to first examine whether you have enough understanding of the tool you plan to try out (CRM in this case).

Considering that CRM systems are devised for professional corporate usage, it comes as no surprise that they are complicated to use. If your team members aren’t tech-savvy (or, sadly, entirely hopeless) at using the CRM tool, you may need to subsidize them to take related courses. At some point, the money spent on employee training will, in return, equip your team with the skill set to optimize their working processes and your business.

There’s no such thing as a free lunch

Without a doubt, CRM can take good care of different aspects of a business, but nothing comes for free. Popular CRM systems, namely Salesforce, Keap Infusionsoft and Quickbase, are nowhere near economical, costing somewhere between US$75 and US$600 per month. While spending a few hundred dollars on a CRM software is not a big deal for most upscale businesses, if you happen to be running a start-up, this may not be the same for you. In that case, you need to factor in expenses such as rent and payroll and make sure you’re not forking out for a costly CRM system.

Before signing up for any CRM system, don’t forget to first figure out what your business is after, along with what is holding it back from panning out. If that can be solved with technology, try out CRM solutions; if not, talk the setback through with your business partners or employees and come up with a plan that works for you.

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Header image courtesy of Freepik

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