CRM Management and Why It Matters
Customer relationship management (CRM) is at the heart of building lasting relationships with an existing customer and new prospects alike. With the proper CRM strategy in place, you can gather valuable customer insights to inform your communications and business practices, while also fostering loyalty and customer retention.
But what is CRM management? Why does it matter?
This guide has you covered.
What is CRM Management?
Building and nurturing customer relations is a critical practice for any company’s long-term success.
In the past, most of this was handled on an ad-hoc, manual basis. Much of it involved keeping meticulous Excel spreadsheets to track relationships with information like the name of the customer, their contact info, the type of customer, or the date they purchased your product or service—all fairly surface-level stuff.
But the digital era has changed that.
Now, a customer relationship management system makes it possible to not only maintain healthy and productive customer relationships but also to automate every aspect of customer relationship management, whether it’s marketing, sales, or customer support.
But it’s important to note that CRM management isn’t just about incorporating any technology. Rather, it’s technology combined with activities and strategies that optimize the way businesses interact with current and potential customers:
- CRM as a technology – CRM technology is the cloud-based technology that automates processes while capturing and analyzing data about any customer interaction within the business.
- CRM as a strategy – A CRM strategy centers around the business principles of how to properly manage relationships with existing and potential customers.
- CRM as a process – This is a system that’s created to build relationships and then continuously nurture them throughout the customer lifecycle.
As Forbes notes,1 “At its core, customer relationship management is simple. However, it can be implemented in a huge array of methods: websites, social media, telephone calls, chat, mail, email, and various marketing materials can all be integrated into a CRM solution.”
And this ethos isn’t limited to enterprise businesses.
It can be just as effective for small businesses, considering any CRM tool, strategies, and processes are scalable. Importantly, they don’t simply improve business relationships, they create internal structures and efficiencies that drive profitability as well as customer loyalty.
Types of CRM Systems
There are a variety of CRM systems. Most CRM software focuses on one of three primary categories:
- Analytics CRM – Analytical CRM gathers customer data, collates it, and then generates actionable insights that speak to the customer’s needs and wants. At its essence, analytics CRM is focused on driving customer satisfaction, and thus customer retention, by making better-informed, customer-conscious business decisions. Such systems are typically driven by data mining and machine learning. And they’re most useful for major organizations that deal with hundreds if not thousands of customers on a daily basis.
- Operational CRM – Operational CRM usually focuses on supporting the marketing team, sales reps, and customer service teams. It uses historical customer data for lead generation and helps automate processes in order to create a better user experience. These systems are ideal for companies with shorter sales cycles and high rates of repeat sales.
- Collaborative CRM – This occurs when businesses share internal customer data with external companies. This data collaboration makes it possible to gather more information and to get a better understanding of their market and the customer behavior therein. This is common in markets where innovation and new products are the driving forces.
Why CRM Matters
There are dozens of reasons why businesses both large and small should embrace a customer relationship management model and system. Important benefits include:
In a digital age, data fuels business strategies. But data can come from a range of sources, including:
- Google Analytics
- Social Media
- CRM tools
- Business software
A CRM system can mine, organize, and then analyze the historic data of customer trends and habits with proper CRM cleanup functions. Armed with clean data—data that doesn’t contain errors like duplication, incomplete fields, or out-of-date information—a powerful CRM platform can extrapolate, providing vital insights on your consumer base and business practices.
The organization of data in one central location is beneficial for everyone within a company. It makes it possible to segment clients into various groups based on factors like age, socioeconomic status, sex, etc. That, in turn, makes it easier for marketing and sales management teams to monitor and speak to those particular groups according to their wants and tendencies.
Optimizing the Sales Funnel
Armed with this customer data, your CRM can then group consumers into one of the three main sales funnel stages:
- Leads – These are the consumers that have demonstrated some level of interest in your product or service. AIl insights empower the marketing team to identify and then properly target high-quality lead generation.
- Opportunities – These are leads who are closer to making a purchase. Perhaps they put an item in their shopping cart, or had a conversation with a member of the sales team. For the sales team, a CRM can highlight consumers who are primed for conversion. it also makes it possible to see which ads and messaging are most persuasive.
- Sales – Even after a consumer has made a purchase and become a customer, the work doesn’t end. First, you have an opportunity for retargeting and ensuring that they become a repeat customer instead of a one-off. Secondly, you can use that data to better understand why customers converted and how to retain them.
Streamlining Internal Communication
CRM helps streamline communication both externally and internally. For employees who need to collaborate across departments, CRM makes it easy to see how other employees are speaking and have spoken to customers. By maintaining a communication log and channel, teams can ensure that their messaging is cohesive. Additionally, CRM tools make it easy for employees to send notes, messages, or alerts to others within the system.
The open dissemination of customer data across different departments, rather than keeping that information siloed, allows your entire organization to work together to optimize the customer journey through every phase of the sales funnel.
Better Lead Response and Customer Service
Does your business effectively manage its leads and respond to customer queries? While an important practice, there are few companies that actively pursue it. According to Harvard Business Review:2
- The average first response time of B2B companies to their leads was 42 hours
- Less than 37% of companies responded to their leads within an hour
- 16% of companies responded within one to 24 hours
- 24% of companies took longer than 24 hours to respond
- 23% of companies didn’t respond at all
When it comes to leads, the faster you can respond, the better. The same study discovered that:3
“U.S. Firms that tried to contact potential customers within an hour of receiving a query were nearly seven times as likely to qualify the lead…as those that tried to contact the customer even an hour later—and more than 60 times as likely as companies that waited 24 hours or longer.”
CRM management empowers sales teams to follow up with leads immediately, rather than letting them go cold. CRM implementation can provide reminders, prompts, and highlight the most promising leads.
Similarly, when customer service receives a request, that customer information instantly pops up, giving the team member more information about the caller, their background, and their purchase history, allowing a much more personal customer engagement experience.
Improved Brand Image
When you take into account customers’ wants and needs and then create systems that improve the way you listen, respond, and act, the result is happier customers. Over time, a pattern of open communication and responsiveness improves your reputation. Your brand becomes synonymous with these positive qualities.
Put simply, by creating a positive experience at every touchpoint of the buyer journey, you incentivize customer loyalty.
CRM management helps a company increase its profitability by optimizing the way the business operates and customer interaction. Whether it’s data gathering and insights, relationship nurturing, or customer retention, CRM solutions help companies better understand their ideal customer and how to best convert and retain them.
Better data allows you to make informed decisions. It helps companies strategize and focus their efforts on the target customer who are most likely to convert.
Over time, this optimization increases efficiencies across all departments, thus reducing your costs and increasing your success rates. The result of this is more customers, happier customers, and helps you convert them at a lower cost. That’s the recipe for greater profitability and healthy long-term growth.
CRM Management Done Right
CRM Management is much more than just a technology. Successful companies embrace a CRM solution that utilizes the tools, processes, and strategies necessary to foster a collaborative relationship between the business and the existing customer.
By aligning your CRM system with a comprehensive digital marketing strategy, you can take this one step further.
Here at Power Digital, we have the resources you need to accomplish that. Together, we can help you reach your full potential using the top digital marketing campaigns and growth strategies.
- Forbes. Why Is Customer Relationship Management So Important? https://www.forbes.com/sites/forbesagencycouncil/2017/10/24/why-is-customer-relationship-management-so-important/?sh=2f403d147dac
- Harvard Business Review. The short Life of Online Sales Leads. https://hbr.org/2011/03/the-short-life-of-online-sales-leads
- Salesforce. Benefits of CRM. https://www.salesforce.com/crm/benefits-of-crm/