Customer Relationship Management (CRM)
JAMSHAID MANZOOR
CPA, CMA, MBA, IFRS, UAE Taxation Certified, Advanced Accounting Certified KHDA, Financial Management Certified CPD London, Management Accounting Expert BCC London. Group Taxation & IFRS Assurance Manager - UAE
Definition and Types:
Every one of us definitely wish to see our customers moving down the marketing or SALES FUNNEL in a sustainable way. To speed up the process, we need a place where we’ll keep all prospect data arranged in a structured and accessible manner. CRM is just that place.
CRM Stands For:
Customer Relationship Management, or 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 us stay connected to customers, streamline work processes, and boost revenues.
With a professional CRM, it’s much easier for us to generate more leads, find new customers, build trust, and provide them with qualified support throughout our relationship.
What is CRM in Simple Words?
To get a CRM meaning, imagine the mall. That’s a huge space with dozens of boutiques, places to entertain your kids, a food zone with different cafes and restaurants — everything you need for your comfort under the same roof.
CRM is just like the mall for your business. This is a big online platform that gathers information about your customers, tracks all your interactions with them, and lets you share this data with your team to agree on improving your company’s processes.
What does CRM do?
To understand what is CRM and how it works, let’s look at its main features.
Lead Generation:
CRM pulls all available data from the web to help you find quality leads, those that are likely to turn into paying customers. In particular, with a reliable CRM, you may get prospect’s contact information, location, the company they’re working for, and other important data you’ll be able to use for personalization goals.
Lead Management:
CRM helps you analyse and track any information you get about your leads, qualify, and nurture them through multiple channels to the point of conversion.
Contact Management:
This feature allows keeping all business contacts in one place and seeing the history of all interactions with them.
Deal Management:
With CRM, you have the history of all your deals, which allows you to analyse any bottlenecks and come up with necessary improvements. Besides, this feature helps forecast the success of future deals.
Email Communication Management:
CRM allows you to build emails, schedule follow-ups, and use email templates for consistent communication with your potential and existing customers. In addition, it notifies you when someone interacts with your emails and provides you with email analytics to improve the performance of your email campaigns.
Sales and Marketing Automation:
CRM with in-built marketing and/or sales automation provides you with tools that replace manual work with finding and assigning leads to the right salespeople, contacting prospects, and many other activities.
Analytics:
CRM encompasses the necessary tools for analysing your business campaign processes. It offers regular multidimensional reports that you may usually export or share with other team members.
Integration:
Many CRMs offer integration options that allow syncing to the apps that you like and have already been using. So, you have all the tools you need in your pocket to streamline your business processes.
Customization:
As a rule, you may adapt your CRM to the way your team operates. It provides custom modules, fields, and buttons that help you tune its functionality up to your needs.
Goals of CRM:
A primary goal of using CRM is to strengthen customer loyalty to the company, as this is significantly cheaper than acquiring new clients. Additional goals of CRM are:
1. To achieve a higher contribution margin per customer
2. To improve profitability by taking advantage of the customer potential.
Benefits of CRM:
Does your company need CRM? Well, the answer is simple: any business that targets ambitious revenue growth needs it. To understand why CRM matters for your company, let’s discover some of its core benefits:
1. Better Organization:
A CRM system is a place to store and manage all the necessary information about your customers. Besides, that’s where you track all the communication with them, as well as access the advanced data about your clients at any time.
2. Better Customer Service (CS):
Managing the data about a single customer, you get a clearer picture of their interests and needs, which enables you to address their issues more quickly. As a result, you provide your clients with better service and get their loyalty in return.
3. Personalized Communication:
Many tools offer personalization features. So, they allow you to segment your customers and build a highly targeted communication approach, e.g., personalize emails, provide relevant content and offers.
4. Higher Customer Retention:
Not only customer loyalty may be improved after you implement CRM. CRM analytic tools, for instance, allow you to analyse the customer life cycle to spot at what point and why churn happens. This helps you identify pain points and come up with effective solutions that will let you increase client retention by 27%.
5. Automation of Tasks:
The majority of CRMs enable you to automate your tasks. This will let you save much of your time and boost your overall efficiency and productivity. Implementing CRM may shorten the sales cycle by 24% and decrease sales and marketing costs by 23%.
6. Higher Conversions:
Having all customer information in one place, automating business processes, and tracking the performance of your marketing and sales campaigns will lead to the desired result — you’ll be able to improve your productivity and grow lead conversions by a tremendous 300%.
Meanwhile, with CRM, your revenue per salesperson is bound to increase by 41%.
1. Tracking Team Performance:
As your sales team grows, you’ll inevitably feel the need to take control of your inside processes: e.g., who closed more deals, what tactics have proved more successful, and so on. As a result, you’ll be able to come up with necessary sales training programs for your team members and encourage them to grow their skills.
2. More Transparency:
CRM allows every member of your team to see how your business processes are going, get mutual access to the system, and share knowledge and best practices with each other. This leads to better collaboration and improves teamwork within your company.
Types of CRM
In one of our articles, we’ve described the two types of CRM from the point of view of customization: custom and off-the-shelf CRMs. Now let’s look at what CRM types exist based on the purpose of usage and modern marketing trends.
Types of CRM based on the purpose
Traditionally, three types of CRM are differentiated:
Yet, now there have been distinguished two additional affiliate types:
1. Operational CRM
Operational CRM is aimed at streamlining your company’s processes. Such CRM helps you generate leads, turn them into prospects, and provide better service for your existing and potential customers. Correspondingly, this tool operates in three directions:
So, you may use an operational CRM as a sales CRM, a marketing CRM, a service CRM.
2. Analytical CRM:
Analytical CRM helps you provide better service for your customers based on data gathering and analytics. These tools collect the data, and you use it for improving your sales process, marketing campaigns, and level of customer support.
As usual, analytical CRMs encompass three components:
3. Collaborative CRM
Collaborative CRM is aimed at aligning your sales, marketing, and customer service processes by allowing different teams of your company to share information about your customers.
It has two components:
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A. Campaign Management CRM
Campaign management CRM is kind of a mixture of operational and analytical CRMs. It helps you organize and manage several processes like planning, execution, tracking, and campaign analysis.
Such CRM often provides integrated solutions that allow you to automate your campaigns, track how they perform and how leads interact with your company, while its tools make your efforts more targeted and personalized.
Examples of campaign management CRMs: Dynamics 365, NetSuite, Pega, Sugar.
B. Strategic CRM
This customer-centric CRM collects, organizes, and applies information about customers and market trends with the aim of providing a better value proposition for your clients and improving the relationship with them.
This CRM type doesn’t only give you insights right away but focuses on the way you interact with your customer in the long perspective. So, it will suit you well if you are interested in long-term relationships with customers rather than quick sales.
Examples of strategic CRMs: SAP Customer 360, Scoro.
Types of CRM based on marketing trends
1. Social Media CRM:
In the era of the social media boom, it’s evident that more and more companies need the social CRM, the one which will work with platforms like Facebook, Twitter, Instagram, and LinkedIn.
Apart from traditional communication channels like email or phone, social CRM analyses interactions through messages embedded into social media platforms.
What is particularly good about social CRM is that it has posts from many social media channels in one place, which allows you to keep track of all customer’s activities in real-time.
Examples of strategic CRMs: Hootsuite, Zoho Social, Sprout Social.
2. Mobile CRM
In a current scenario, when about 63% of the world population are mobile users, the demand for mobile CRMs has grown drastically.
Mobile CRM offers tools that are well accessible from smartphones and tablets, so they are adjusted to smaller screens, have an intuitive user interface, and offer possibilities to be used on the go.
But there is a peculiar thing about mobile CRM — super security. You may lose your smartphone easily, so you should ensure your mobile CRM offers security features such as two-factor authentication, VPN requirements, and so on.
Examples of mobile CRMs: Salesbox, Haystack.
CRM Technology:
CRM Software:
Special CRM software aggregates customer information in one place to give businesses easy access to data, such as contact data, purchase history, and any previous contact with customer service representatives. This data helps employees interact with clients, anticipate customer needs, recognize customer updates, and track performance goals when it comes to sales.
CRM software's main purpose is to make interactions more efficient and productive. Automated procedures within a CRM module include sending sales team marketing materials based on a customer's selection of a product or service. Programs also assess a customer's needs to reduce the time it takes to fulfil a request.
CRM Cloud Solutions:
Cloud-based systems provide real-time data to sales agents at the office and in the field as long as a computer, smartphone, laptop or tablet connects to the internet. Such systems boast heightened accessibility to customer information and eliminate the sometimes-complicated installation process involved with other CRM products or software.
The convenience of this type of system, however, has a trade-off. If a company goes out of business or faces an acquisition, access to customer information may become compromised. A business might have compatibility issues when and if it migrates to a different vendor for this kind of software. Also, cloud-based CRM programs typically cost more than in-house programs.
CRM Human Management and Artificial Intelligence:
All of the computer software in the world to help with CRM means nothing without proper management and decision-making from humans. Plus, the best programs organize data in a way that humans can interpret readily and use to their advantage. For successful CRM, companies must learn to discern useful information and superfluous data and must weed out any duplicate and incomplete records that may give employees inaccurate information about customers.
Despite this human need, industry analysts are increasingly discussing the impact that artificial intelligence applications may have on CRM management and the CRM market in the near future. AI is expected to strengthen CRM activities by speeding up sales cycles, optimizing pricing and distribution logistics, lowering costs of support calls, increasing resolution rates, and preventing loss through fraud detection.
Tangible AI applications for CRM, however, are in the early stages of adoption, although Salesforce and Microsoft have already started to integrate AI components into their existing CRM systems.
Frequently Asked Questions
How Much Does a CRM System Cost?
CRM pricing will depend on the size of the business, scope of features in the platform, number of users, and software vendor. Set-up and implementation fees can run in the thousands of dollars. CRM is then typically billed on a per-user per-month basis and can range from $15 to $300 or more per-user per-month depending on the complexity of the implementation.2
How Do Businesses Choose Which CRM to Go With?
Today, there are several vendors of CRM platforms, so choosing a CRM boil down to cost, service, and functionality. That means you want the best bang for your buck, and not to spend extra money on added features that you won't use. Establish a budget that revolves around the business' goals and then select the features or functions that you require. Then, shop around and research vendors' customer reviews and feedback.
What Is an Example of Customer Relationship Management?
CRM can come in many forms, from tracking customers' purchasing behaviour to fielding complaints and returns. One example of CRM might be sending out a tailored thank you note to customers after making a key purchase, both to improve their experience with the company but also in an attempt for a cross-sale or to upsell them in the future.
Who is CRM for?
A CRM system gives everyone — from sales, customer service, business development, recruiting, marketing, or any other line of business, a better way to manage the external interactions and relationships that drive success. A CRM tool lets you store customer and prospect contact information, identify sales opportunities, record service issues, and manage marketing campaigns, all in one central location and make information about every customer interaction available to anyone at your company who might need it.
Running a business without CRM can cost you real money.
More administration means less time for everything else. An active sales team can generate a flood of data. Reps are out on the road talking to customers, meeting prospects, and finding out valuable information, but all too often this information gets stored in handwritten notes, laptops, or inside the heads of your salespeople.
Details can get lost, meetings are not followed up on promptly, and prioritizing customers can be a matter of guesswork rather than a rigorous exercise based on data. And it can all be compounded if a key salesperson moves on. But it's not just sales that suffers without CRM.
Cloud-Based CRM:
CRM and the cloud computing revolution have changed everything. Perhaps the most significant recent development in CRM systems has been the move into the cloud from on-premises CRM software. Freed from the need to install software on tens, hundreds, or thousands of desktop computers and mobile devices, organizations worldwide are discovering the benefits of moving data, software, and services into a secure online environment.
WORK FROM ANYWHERE:
Cloud-based CRM systems such as Salesforce, mean every user has the same information, all the time. Your sales teams out on the road can check data, update it instantly after a meeting, or work from anywhere. The same information is available to anyone who needs it, from the sales team to the customer service representatives.
REDUCE COSTS:
CRM can be quick and easy to implement. A cloud-based system doesn’t need special installation, and there’s no hardware to set up, keeping IT costs low and removing the headache of version control and update schedules.
Generally, cloud-based CRM systems are priced on the number of users who access the system and the kinds of features needed. This can be very cost-effective in terms of capital outlay, and is also extremely flexible, enabling you to scale up and add more people as your business grows. Salesforce is flexible in terms of functionality, too. You’re not paying for any features that are not useful to you.
Advantages of using CRM Software:
These are various advantages/benefits of CRM Software are –
1. Enhanced relationships with customers
From prospect to lead to customer, their journey is captured in the CRM. These insights put you in a better position to recognize people, their needs, and how your business can work for them.
2. Lesser data entry
CRM lets you automate mundane tasks like creating leads from signup forms and sending welcome emails to new leads. Spreadsheets demand data entry, CRMs minimize it.
3. Better communication
The CRM system becomes a single source of truth for every member in your team. No information gaps, no back and forth, the customer hears a consistent voice from your business.
4. Higher revenue
Because you have a well-rounded view of your customer at all times, you can cross-sell and up-sell at the right moments, with higher success rates. This also reduces the chances of attrition.
5. More collaboration = A strong business
Information in the CRM is useful not just for your sales team, but for marketing and support too. They can plan campaigns and respond to tickets better using sales context.
Disadvantages of using CRM Software:
These are various disadvantages of CRM Software are:
Conclusion:
A CRM system is an inevitable part of your B2B environment. It enables you to pave your business campaigns from the beginning till the end, keep a full portfolio of your customers, track the performance of your team, align sales and marketing processes, and much more.
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