CRM, or Customer Relationship Management, is a centralized system to manage sales leads, marketing efforts, customer service and success, management, finance, and IT.
A CRM software appeals to companies looking to simplify the sales process and cut down the number of tools used to track a customer’s lifecycle. By doing so, it effectively increases sales performance and improves customer satisfaction.
This article will outline several points on what CRM is and why companies need to implement it in their day-to-day workflow.
- What is CRM?
- Core features of CRM
- Why do you need a CRM tool?
- Why do companies need CRM?
- Why do salespeople need a CRM tool?
What is CRM?
CRM is an acronym that stands for customer relationship management. A CRM software is a business process and a tool to facilitate company relationships with both existing and potential customers.
An effective CRM software makes business-critical information, such as, customer contacts, potential prospects, sales opportunities, and metrics reporting, accessible in real time to each user, all in one place.
Currently, there are several CRM tools available in the market. Here are a few examples:
- Relate is a simple and easy-to-use CRM software for B2B startups and SMBs.
- HubSpot is a CRM tool that primarily focuses on marketing automation.
- Salesforce is an enterprise CRM platform that offers a wide range of products, including Sales, Services, and Support Cloud.
- Keap highlights its user-friendly setup that appeals to first-time CRM users and businesses.
Core features of CRM
- Day-to-day contact management and relationship management
- Email and communication channel integration
- Sales and customer support collaboration and communication
- Sales pipeline management and process management
- Reporting & analytics
Why do you need CRM?
In order to present the best customer experience, context is a vital component that companies must understand. Fortunately, CRM offers exactly that – it allows users to keep track of the entire sales pipeline under a customer-focused mindset.
“Without context, you can’t personalize and prioritize. And you can only have context when you have the 360-degree view of the customer.”
– Clara Shih, CEO @Service Cloud, Salesforce
As your client network grows, tracking multiple customers and their corresponding sales can get tricky and, even worse, lost in the process. To prevent such mishaps, a one-stop organizational tool is needed to organize data and create efficient workflows for your team.
Unlike traditional spreadsheets or organizational tools that shelf surface-level profiles, CRM services collect and track in-depth data, such as a customer’s website activity or the opened emails in a users’ inbox. CRM services also automatically refresh this extracted data, eliminating the need to manually pull information daily or even on an hourly basis. This process not only collects the most recent and relevant user data, but it also feeds into a more accurate system that pinpoints the next steps to a successful customer interaction such as ways to increase the effectiveness of an email marketing campaign or the overall customer satisfaction to optimize ideal business performance.
Why Do Sales Teams Need CRM?
Improved Sales Performance
It is not an exaggeration to state that customer data is a company’s most valuable asset. Without a proper CRM system, customer and sales data can remain stagnant in multiple places – in a chaotic spreadsheet, a notepad by a desk, or in a thread of emails. Consequently, once an account executive decides to move on to a different opportunity, you might be pressured to scrape the customer data all over again with a new representative onboard. However, companies would no longer have to depend on sales individuals for specific knowledge since the tool makes client profiles and customer data accessible to all users.
CRM software effectively keeps track of meticulous details — e.g., meeting details, unread emails, and sales updates — and fills crucial gaps to find areas for future improvement. Furthermore, once you follow up on all the won and closed deals in your sales profile, your team can analyze client history and review the data collected within your CRM. New sales representatives would ideally spend less time on identifying potential scenarios but instead use previous accounts and data history to better qualify potential leads.
With a thorough view of the customer’s past, present, and future, your team can better suggest suitable offerings to create positive return rates and boost business performance. To fully take advantage of a CRM tool’s bird’s eye view, it’s important to consider shifting the focus of CRM usage purely from sales and marketing to other departments such as finance, customer service, and IT. By utilizing a CRM tool throughout the different components of your company, the easier it becomes to implement a “customer-first” mindset and accelerate opportunities for growth.
This can be rewarding, as studies show customers appeal to personalized marketing tactics. According to a study by McKinsey, 71% of customers expect companies to deliver personalized interactions and 76% get frustrated when they do not receive this. As customer loyalty remains at risk, both the retention of existing customers and attraction to new customers is proven incredibly vital to overall performance. In fact, successful companies that have grown faster than their competitors drive 40% of their revenue from personalization methods, which helps them reach the right target audience at the right time.
Why Do Salespeople Need CRM?
Salespeople can benefit from CRM tools and significantly improve sales productivity. CRM tools aid the process of identifying potential new leads, resulting in better prioritization of workflow and increasing the chances of successful deals.
The lead response time, also referred to as the speed to lead, determines the longevity of a customer’s interest in your brand. Fast lead responses will likely result in actual sales performance whereas slow lead responses provide other competitors the opportunity to steal the customer’s interest. A study from Harvard Business Review notes that businesses that respond within an hour are almost seven times more likely to have effective dialogues with decision-makers. The lack of CRM services directly impacts this aspect of your business and can decrease your chance of selling to the right people.
CRM combats this problem by allowing you to easily follow up on customer emails, keep track of progress updates, record any changes, and set up reminders to continuously follow up and engage with the customer.
According to a survey conducted in 2018, only 16% of U.S. organizations considered their real-time customer interactions to be effective, emphasizing the gaps that CRM tools can amend. Consequently, the global CRM market is forecasted to grow to $49.6B USD in 2025 at a CAGR of 1.7% as the largest and fastest-growing enterprise application software category.
An effective CRM service will cover multiple touch points – sales, marketing, customer service, and more – to offer personalized and effective next steps and detect problems early, resulting in ideal customer growth and satisfaction. Considering today’s context in which employees are scattered all over the U.S. and across the globe, having a universal platform to store and analyze real-time data can be the deciding factor that determines your company performance and its connection to the world’s vast network of clients.