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Building and maintaining relationships with current and future customers is key to running a successful business. You need to know as much as possible about your customers, their experiences with you, and why they purchase your products.
It’s a relatively simple concept: the stronger your relationship with your current customers, the easier it will be to reach new ones. The most effective way to manage these relationships is by using CRM-focused software.
What does CRM mean?
CRM is the common abbreviation of the phrase “customer relationship management.” The core concept of CRM is to establish various principles, practices, and guidelines that should be followed when interacting with customers.
By sticking to these rules, CRM can help improve your customer interactions, leading to greater customer satisfaction throughout the business process and customer journey. A more satisfied customer will be more likely to do business again with you and recommend you to other potential customers. The potential for growth using CRM is extremely valuable for any business.
Many different types of CRM platforms can be used to target specific customers:
- Sales CRM is designed to increase sales by building new pipelines for new customers, leads, and prospects. The collected information typically revolves around the sale cycle and turning a lead into a closed deal.
- Marketing CRM helps to create, automate, and track various marketing campaigns that you’re employing. The goal is to identify targeted customer segments and develop unique marketing strategies to drive their interest.
- Service CRM revolves around providing excellent assistance to existing customers. You might use phone calls, online chats, texts, emails, and social media to stay in contact with customers. These channels can help clear up any questions, comments, or concerns they might have with your product or company.
- Collaborative CRM is the name for when customer data is shared across multiple business segments and internal teams. For example, the marketing CRM team can use the service CRM data to help answer potential customers’ questions before they’re even asked.
How does a CRM work?
A CRM aims to help you improve your customer support and relationships to grow your business further. There are many different ways that companies attempt to achieve this goal.
Social media apps, for example, have quickly become one of the most popular ways for a company to interact with customers. Creating a social media profile for your business can help attract customers, get direct feedback, increase market reach, and inspire customer loyalty.
Social media is only one example of how CRM tools can help your business. The more traditional definition of CRM involves creating highly detailed customer information that includes:
- Cards provide all relevant contact information (name, email, phone number) about the customer.
- A highly detailed and automated communications history includes call/message logs, notes about the nature of the communication, and actions are taken.
- Lead scoring can help determine whether a customer is a hot or cold lead.
- Improving the lifetime value of customers by identifying cross-selling and upselling opportunities for customers.
- Quick, personalized, and highly detailed customer service support can help improve a customer’s overall experience.
- Data mining can help you better understand the needs and issues of your customers so that you can address them as quickly as possible.
- Marketing tools help create effective campaigns to drive new customers.
- Collaboration tools that can connect team members from all around the world.
Who should use a CRM?
CRM solutions may sound like they only help large businesses, but they can benefit sales teams and businesses of all sizes. Every company should be focused on increasing its sales, providing excellent customer service, and creating marketing campaigns to reach new customers. CRM software is one of the most effective ways of achieving these goals.
When used correctly, everyone in your company should be able to see which customers have been communicated with, when they last made a purchase, how much they spent, and the likelihood that they’ll buy something else. That’s only the tip of the iceberg for CRM information.
You should be able to use this information to help increase sales with existing customers and reach new ones.
What are the benefits of using a CRM?
The benefits of a CRM may include being able to efficiently track sales (and even boost sales due to that increased efficiency), improving customer service capabilities thanks to easily accessible customer information, resulting customer loyalty from the improved customer service, better business analytics, improved efficiency with project management, and better internal communication — all stemming from improved management of customer data.
Sales growth boost.
The primary purpose of a CRM is to help increase the sales that your business makes. You should be able to streamline the sales process, establish customer pipelines, automate various tasks, and analyze relevant sales data.
These factors can help you identify the hottest leads, reach your target audience more efficiently, and increase the odds of closing a sale. You’ll also be able to cross-sell and upsell your customers at more opportune moments, which can boost overall profitability across your sales cycle.
Enhanced customer service.
A good CRM system will manage your existing customer contacts and use the information to build unique profiles. You’ll be able to understand customer needs and the typical customer experience at your company. This can help you optimize your CRM strategy for more customer engagement by taking deliberate actions to meet these needs and address these issues.
Existing customers should appreciate the improvements, and potential customers will have a better experience from the beginning. Across all touchpoints of the sales pipeline and customer lifecycle, your marketing efforts will improve with the best CRM technology to help you provide excellent customer service.
Improved customer loyalty.
Customer retention is one of the critical foundations for the success of a business. The last thing you want is someone to try your product, have a negative experience, and tell everyone they know about it.
A CRM can help prevent these issues by providing more effective customer outreach and service. You’ll be able to see what customers say about your business, products, and experience, which will help you create a strategy to improve each.
Superior business analytics.
Business analytics can make or break a company and are essential to healthy growth. CRM features can help you wade through all the sales, financial, and marketing data to help you create a clear strategy.
With all your salespeople looking for sales opportunities, follow-ups, and Salesforce forecasting spreadsheets, and your marketing teams working on SMS, social media, and email marketing, automation tools can be crucial to meeting your business needs. Data entry is made simpler with CRM management tools, helping with sales management and marketing automation and allowing your teams to perform more significant tasks.
CRM tools can also provide more precise and meaningful data. Having a firmer grasp of data management can benefit every aspect of business operations, including reaching new customers, retaining current ones, and creating more effective marketing strategies.
Maximum project efficiency.
The success of your latest project will largely depend on the collaboration between relevant team members. A CRM can help automate menial tasks and create business dashboards to improve project collaboration’s speed, accuracy, and simplicity.
Stronger internal communication.
The absence of relevant information and miscommunication are two of the most devastating wastes of time for a business. The more time an employee spends tracking down information, performing redundant tasks, or clearing up a miscommunication, the more money your business will cost.
A CRM can help improve communication by assigning tasks, displaying work progress, and quickly bundling all relevant information for everyone to see. Communication should improve as well as the workflow and results.
How much does a CRM cost?
The services that a CRM can provide for your company might be priceless, but the software that you’ll need won’t be. The exact costs are going to vary based on a few details.
The total number of users, the complexity of the security, the specific provider, and the features you want will all dictate the price. You might get away with spending a few hundred dollars on your CRM software, or it could cost you upwards of $20,000.
The good news is that the cost of purchasing CRM software is usually offset relatively quickly. Recent studies have shown that the average business receives an $8.71 return for every dollar they spend on CRM.
The average has only increased over the last few years as the software has become more comprehensive. CRM software is well worth the initial investment and startup costs if used properly.
Invest in a CRM to grow your business more efficiently.
Any business that isn’t growing is dying, whether a small business or a massive corporation. Growth is essential to improve sales, boost revenue, receive more investments, and attract new talent. Several options can help your business grow, but few are as effective as CRM software.
The upfront costs of installing the CRM software of your choice will likely be considerable. It will also take some time to see a return on that initial investment.
However, your customers’ overall experience should improve, and the day-to-day business operations would be smoother. Those reasons alone will make CRM worth the price, which only scratches the surface of the benefits. For more informative and engaging business content, check out more resources on Entrepreneur.com.