One of the most important components of business is the client relationship. With the spread of digital technology, the system of connections in which brands operate, whether B2B or B2C, has become more relevant than ever before. So, what exactly is CRM (customer relationship management)? Customer Relationship Management (CRM) is a well-known phrase that denotes a consolidated and ubiquitous reality that reflects the customer’s absolute preeminence. In this post, we’ll attempt to answer the question “what is Customer Relationship Management” and explain why, in today’s world, implementing a CRM system is not only necessary for the smooth operation of company processes, but also represents a tremendous opportunity for growth and enrichment for any company.
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What factors contribute to CRM systems’ success?
What is Customer Relationship Management, as defined in the answer to the question? We must address two interconnected factors that have contributed to its success: the first is cultural, and the second is technological.
The consumer model shifts, and the business philosophy shifts as well.
Purchasing methods have evolved dramatically during the previous 20 years. Touchpoints have multiplied, resulting in a new model of consumer: one that is better informed, more attentive, and, most importantly, has more opportunity to participate in the company’s discussion. These changes have occurred in tandem with a significant shift in business ideology. Customer loyalty has become the ultimate and important goal of communication and sales strategies in an increasingly richer and more flexible framework.
Above all, there is a pressing need to develop new and more complex methods for managing client interactions. Customer Relationship Management (CRM) solutions are intended to provide basic support to a variety of corporate operations by:
Keeping track of contacts
Automating the most time-consuming and low-value tasks
dividing the workload
All of the activities that are required to generate leads, both programmable and reproducible, are activated.
Not only is centralizing customer contacts the best way to streamline processes and save time and money, but managing customer relations is also critical because it strengthens customer loyalty and reduces the risk of customer churn, positively impacting the entire company’s operations, beginning with marketing and sales.
How is the digital transformation is transforming customer service?
CRM also refers to the technology system that is utilized to manage customer connections effectively. Salesforce was the first to popularize the term CRM (Customer Relationship Management) at the outset of the digital revolution, in the late 1990s, to refer to the tools that make it possible to create personalized documents in massive volumes.
All procedures that allow for the orderly management of client contacts may now be carried out in practice by software, thanks to the advanced degree that digital transformation has achieved. In reality, a CRM system is more effective when it is integrated with a whole suite of digital solutions, allowing it to support every stage of the customer journey: sales, services, and marketing.
Let’s take a closer look at the existing situation to have a better understanding of what Customer Relationship Management is. The global CRM software industry, which was worth more than $40 billion in 2019, is expected to keep growing through at least 2027, according to projections.
Demand for Software as a Service (SaaS) is driving the market, which is increasingly being used in the development of customer relationship management suites and solutions. Some of the causes fueling and vertically distinguishing the demand for CRM solutions across industries include mature customer service, the usage of highly automated modes, improved customer experience, and the exponential expansion in digital operations. Furthermore, the advancement of cloud computing technology and the availability of numerous service models such as SaaS, Platform as a Service (PaaS), and Infrastructure as a Service (IaaS) are expected to become more prominent market drivers in the coming years (source: grandviewresearch.com).
Who is CRM for?
CRM systems are frequently related to sales teams’ activities. However, over time, these solutions have grown in popularity and become part of the toolset used by a variety of different corporate tasks, including marketing, administration, and customer service, to mention a few.
CRM evolves as a result of the ongoing collection of customer data, analysis of that data and application of the insights acquired to improve customer relationships and company results. Regardless of the department in which he or she works, any customer-facing employee (or anybody who helps customer-facing employees) has a significant communication advantage. They can build and maintain a key channel to the consumer, offering them the information they need, by employing an accurate, profiled image of the customer’s condition.
If we were to try to answer the question of what a CRM is, we may characterize it as a system that is critical to a company’s success, particularly in terms of sales. Companies can use the CRM system to gain a comprehensive understanding of their customers, allowing them to:
Assist sales teams in introducing new complementary items at the right time, in the right way, and at the right price.
Assist support teams in solving problems more quickly.
Assist product and service development teams in creating better products and services.
How does CRM work?
Even though CRM software had already surpassed database management systems in terms of revenue and adoption priority among corporate decision-makers by the end of 2017 (source: Gartner), the implementation of a complete and structured database remains the starting point of any Customer Relationship Management project, regardless of the enterprise’s specific needs.
Indeed, databases enable the creation of platforms for the collecting, organization, and analysis of data from a range of sources, including online, offline, and third-party sources – platforms that, in the most advanced cases, are combined with Artificial Intelligence services. Customer data can then be combined to create commission models, sales predictions, territory segmentation, campaign design, and product innovation, all of which are useful tools for sales, marketing, and service teams to build targeted activities.
In other words, the most advanced CRM systems enable you to acquire a complete and dynamic overview of the client situation, which is essential not only for optimizing business processes but also for creatively developing new products and services. Above all, if we take a completely customer-centric view, the only one capable of ensuring medium- and long-term success in customer acquisition and retention, this analytical and all-encompassing perspective is required.
A CRM system organizes, links, and analyzes all quantitative and qualitative data collected along a customer’s path, from master data to information gleaned from interactions with the firm, from recording transactions to service requests, and from feedback to ideas. As a result, the system provides an interface that, starting with data and information sharing, gives consumers a comprehensive perspective of their consumption and position about the brand.
Greater comprehension results from this increased perspective, which is gradually enriched via the experience of the various touchpoints. The basis for truly solid connections is ultimately established on this understanding, which correlates to customer empowerment.
What are some of the most pressing concerns that CRM systems can address?
CRM software is created to address several crucial challenges around customer relationship management. They help businesses to respond quickly to the factors that have caused or may cause a drop in revenues, an increase in customer turnover, or stalled growth. The following are five of the most common difficulties that CRM systems assist in addressing and overcoming.
- The company is unable to successfully upsell and cross-sell its products.
An effective customer relationship management system sorts, analyzes, and manages large amounts of data and makes it accessible so that those who need it right away – primarily upsell and cross-sell salespeople – have all the information they need to prioritize leads and capitalize on each opportunity.
- Creating customer profiles is difficult.
We noted it at the outset of this post: the new consumer model created by digital disruption – which can have an unprecedented impact on consumer choices, even affecting brand manufacturing – must be included in every company’s communication, marketing, and sales strategy. It is consequently vital to use CRM data for increasingly tailored messages to intercept their requirements, expectations, and wants. A customer relationship management system can provide more precise profiling, allowing for the selection of the most appropriate incentives and activities. It can assist you in keeping track of contacts within a firm and integrating account data, including that provided by third parties, to ensure that all data is full and up-to-date.
- There’s a problem with customer service.
Customer retention is declining, the Net Promoter Score (NPS) is low, and contact center management times are unacceptably long, which indicates that customer service is failing to operate proactively. A CRM system can give customer service representatives a customer history that they can access in real-time so that they can extract the most helpful and applicable information.
- The marketing and sales departments are not in sync.
A good CRM has a wealth of information and serves as a hub for all of the company’s divisions. Information asymmetry, redundancy, and difficulties accessing data result from a lack of interdepartmental communication. Due to a segmented data structure, the coordination of sales, customer support, marketing, and even some back-office tasks (such as billing, inventory, or logistics) is hampered. There is no seamless flow of information if all teams do not cooperate regularly, and customers suffer the most. All employees may access, use, and add data in a single CRM, and they can share insights, leads, issues, and activity history.
- Forecasting and reporting are excessively difficult.
There is a risk of proliferation of documents that do not comply with a single standard and are thus difficult to interpret and inaccurate if reports and statements are made up of dozens (or hundreds) of spreadsheets without a centralized production and distribution mechanism. Inaccurate, inconsistent measurements and confusing meanings invariably result in inaccurate planning and forecasting. Furthermore, time-consuming administrative activities prohibit the sales force from doing what it was hired to do: sell. A strong CRM system saves data in a single, easily accessible area, allowing for accurate, real-time reporting and forecasting.
What is the importance of customer relationship management systems?
We’ve seen what a CRM is thus far. Let’s look at two common brand-customer interaction scenarios to address the issue posed in the headline of this paragraph. Elena is our “guinea pig,” and she recently purchased and registered a product from a company with whom she is already familiar. Elena would like to know why the product doesn’t work before returning it. She makes touch with the company’s customer care department.
The operator she’s speaking with has no idea who she is, what she bought, or when she got it. Elena must then re-enter the information she gave at registration, such as the product model or serial number. What’s the result? Elena is viewed as irrelevant inside the relationship with the brand, making the experience a waste of time and disappointing.
The operator takes down Elena’s identity and swiftly confirms that she is who she claims to be. Elena’s whole purchase and servicing history is available to the operator, who can promptly answer all questions. She can immediately obtain the information she requires. Elena will have to return the item, but the experience has been positive: the company has demonstrated that it understands her and has aided her in the best way possible, providing her with the satisfaction that will encourage her to make other purchases.
The second situation is supported by the most powerful CRM systems. This is why they’re crucial: they contribute significantly to a better client experience. Every CRM-based engagement provides the potential to provide a more personalized and engaging experience, build stable and continuous connections over time, raise revenue, and eventually improve and consolidate company results.
