What is Customer Relationship Management?

What is Customer Relationship Management?

What is Customer Relationship Management?

Customer relationship management (CRM) is a concept that refers to the strategies used by an organization to improve business relationships with customers. CRM software dates back to the 1980s — these systems gathered and analyzed customer information, just like they do today — and has become a valuable tool for businesses that want to engage with customers, drive sales and improve their marketing efforts. Think of CRM like a digital Rolodex. It keeps peoples’ contact details — names, phone numbers, addresses, etc. — in one place, making it a powerful resource for marketers. But it also streamlines sales activities and optimizes business processes.

CRM Explained

CRM helps businesses manage customer relationships. These programs gather data from customer touch points — encounters where customers exchange information, such as web forms and surveys — and displays this information on a single dashboard. A company can search for a customer’s account and discover his or her contact details, purchase history and previous interactions with customer representatives. This information lets businesses make important decisions and build customer relationships.

“CRM solutions give organizations business data to help provide services or products that your customers want, offer better customer service, help sales teams to cross-sell and up-sell more effectively, close deals, retain current customers and to better understand exactly who your customers are,” says online technology portal Webopedia.

CRM applications range in scope and design. In the past, companies could only access CRM software from one system. Today, cloud-based CRM syncs data to the cloud so users can access information from any computer with an internet connection. Also, mobile CRM apps let businesses view customer data on a smartphone or tablet anywhere in the world.

As CRM processes and stores sensitive data — consumers’ email addresses and birth dates, for example — developers have created features to prevent security breaches. CRM administrators can limit access to a system with access controls, for example.

SalesForce, Zoho, Act!, Microsoft Dynamics and HubSpot are among the most popular CRM systems, according to business software review website Capterra. Businesses can integrate CRM software with other applications, such as enterprise resource planning tools and business analytics programs.

CRM Uses

Ninety-four percent of businesses who have CRM use the software for contact management. Sixty-five percent use it for lead nurturing, 59 percent for email marketing, 59 percent for sales forecasting and nine percent for customer service.

When asked about what they plan to achieve from using CRM software, 74 percent of users said improving customer service. Sixty-six percent of CRM users hoped to boost customer satisfaction, 56 percent wanted to improve customer retention and 54 percent wished to accelerate sales.

The Benefits of CRM

CRM automates the information-gathering process. This software accumulates customer data automatically, saving organizations time. It facilitates better communication, too. Staff in different departments — marketing, sales, customer service, project management, etc. — share CRM data and collaborate on different projects. For marketers, CRM provides in-depth customer insights. It tracks customer behavior across various channels and lets businesses measure customer preferences.

Sales reps also use CRM data to personalize marketing. The latest CRM software makes it easy to segment customers based on location, age or shared interests and deliver more targeted marketing messages. This proves effective. Seventy-three percent of shoppers prefer to do business with a company that uses personal information to make their experiences more relevant.

CRM also benefits customer service teams. Staff can view a customer’s account when they call into the office or send an email. Information like previous interactions and purchase histories help customer service reps solve complaints and cross-sell products and services. “With CRM, customer support becomes a walk in the park,” says Salesforce on their blog. They also say CRM could improve customer retention by as much as 27 percent.

How to Choose a CRM System 

CRM programs need to help companies build long-lasting customer relationships. Businesses require a CRM vendor that provides them with full support and value for money. Features like simplicity and customization benefit businesses that want to nurture leads and track performance. Companies often look for cloud CRM and software that has a mobile app.

Free trials and demos let businesses experience all the features of a CRM program before they decide to purchase the software. Users can then ask a CRM vendor for more information about business packages.

CRM systems range in price — Salesforce, for example, costs between $55 per month and $300 per month — so businesses should shop around and find the best software that suits their budget.

Takeaway 

More businesses rely on CRM than ever before. In 2016, CRM usage increased from 56 percent to 74 percent, and a huge 91 percent of businesses with more than 11 employees now use this software. CRM applications help businesses nurture customers, improve sales and drive revenue, making it a crucial component of any marketing campaign.

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Patrick Hogan

Patrick is a Co-Founder & Chief Executive Officer of Tenfold.