What is Customer Relationship Management (CRM): definition, examples, and tips
You are used to it when in your favorite cafe you are greeted with a friendly “Good evening! As usual?” It means they know you and are glad to see you. The same goes for a customer relationship management (CRM) system. It’s all about building and maintaining good relationships with customers.
CRM as a means of marketing helps inspire clients to move down the sales funnel in a structured and sustainable way. Besides, new employees can find their way around more quickly if customer data is arranged in an accessible manner. In case of an employee’s illness, functions can be transferred to another team member within the service, and the lead will smoothly convert into a customer.
What is customer relationship management?
CRM is a technology for managing all business relationships and interactions with existing and potential clients within a company. Its purpose is simple: improving business relationships. This system helps companies stay connected to customers, streamline work processes, and boost revenues.
Trust plays an important role online and offline when it comes to sensitive customer data. Security must be developed through the interplay of marketing, service, and transparency. If potential clients feel they are in good hands, they will let you perform actions and follow-up orders with their data.
Goals of CRM
A primary goal is to strengthen customer loyalty to the company, as this is significantly cheaper than acquiring new clients. Additional goals of CRM are:
- to achieve a higher contribution margin per customer
- to improve the profitability by taking advantage of the customer potential, focusing on profitable clients and growing customer loyalty
CRM solutions come in a variety of types. Here are some of the CRM examples:
- Hubspot (inbound CRM)
- Salesforce (general CRM)
- Freshsales (fully integrated CRM)
- NetSuite (operational CRM)
- Pipedrive (sales CRM )
- Zoho (analytical CRM)
- Insightly (operational CRM)
You are guaranteed to remember businesses you or your friends have had bad experiences with. There are two options here. Some companies don’t value customer loyalty and work according to standard criteria. But if your business model focuses on long-term success with regular clients, you should know all the details of customer relationships.
CRM as the core element of your business
CRM doesn’t work if you don’t have a meaningful infrastructure based on CRM software or a CRM module in a comprehensive ERP system. For your success, regularly check whether your strategy is up-to-date and adapted for the future.
When choosing a CRM system, ask yourself questions:
- What are your goals?
- Is the CRM database customized for your internal processing so that addresses do not have to be re-entered every time?
- Can you send targeted offers?
CRM makes sense for both sides. Customers can receive information about the order faster with the customer ID or order number, and you will have all the necessary information at hand. The interaction becomes faster, more efficient, and, at the same time, more appreciative.
In addition, CRM systems can help you with sensible solutions for process management and marketing. For example, as a provider, you can present your best customers with a special offer.
Who are your clients? You can’t maintain customer relationships if you don’t know who you are dealing with. Divide your customers into groups and follow intentions, important topics, and solutions. As a provider of services or products, you want to be able to offer the best solution.
Who are your new clients? What convinces them to buy from you? This is the basis for finding targeted measures for successful customer relationships.
In a further step, you should find out who your top clients are with an ABC analysis and then use CRM to build up special offers. If you have previously aligned your business processes to your product range, you can now focus on your customers.
Customer-oriented order management
What do your buyers want? Generally speaking, they want an easy solution to their problems. Leads convert into regular customers if the offer, service, and price match, and a feel-good factor is fulfilled.
You can’t and shouldn’t attach a psychological profile to every database entry. Listen, document orders, and process them after consultation. Communication and reliability are essential.
CRM increases customer loyalty
CRM helps you treat your clients individually. Does your customer prefer a specific delivery address or payment method? Offer them to include these requests as a default service. This small gesture may lead to a big impact!
CRM systems help you fulfill your customers’ wishes and offer the best possible service. With CRM tools, this works even when the responsible sales representative is on vacation.
CRM leads to better results
Customer relationships are much more difficult without personal contact. You can order pizza online instead of calling or going out to eat, and the big chains align their CRM with it. The data is stored in the CRM system, coupons are sent as part of a marketing campaign, and interaction is rewarded online. Many CRM mechanisms generate customer loyalty without great costs.
With a customized CRM system, you have a tool for simple customer service that you can use as you wish. For example, if you are preparing a holiday event, send personalized letters to your most important customers with reminders. Timely information is worth its weight during, for example, Halloween sales.
CRM improves your teamwork
Through CRM, duplicate work, wasted time, and inconvenient assignments can be minimized. Everything is stored in the CRM system, and a reminder is created for an employee who will be completing the order.
Teamwork can be easy with shared documents and intelligent functions. As soon as all employees have been instructed that all important information ends up in a CRM system, CRM can be practiced sensibly.
If you work with a cloud-based CRM system, your sales and support staff can access the necessary information almost simultaneously. And if your company is on a bigger size, the use of CRM tools is unavoidable these days – unless you like to burn money.