What Is Customer Relationship Management? What Are Its Components, Types, And Benefits?
A CRM, or customer relationship management, is a selection of strategies, protocols, and technologies that companies utilise to analyse and manage customer interactions and data throughout the customer lifecycle, to enhance customer services relationships, aid in customer retention, and steer sales growth.
CRM systems bring together customer data across various channels, or points of contact between the company and the customer, which could consist of the company’s telephone, website, live chat, marketing materials, social media, and direct mail. A CRM system can offer customer-facing staff detailed data on a customer’s personal information, buying preferences, purchase history, and concerns.
Components of Customer Relationship Management
At the most basic level, this software consolidates customer documents and information into a single database, so business users are able to manage and access it more easily.
Over time, several additional functions, such as recording several customer interactions over the phone, social media, emails, and other channels have been included in the CRM systems to make them more useful. Other functions include automating several workflow automation processes such as calendars and alerts, tasks, and offering managers the ability to track productivity and performance based on data logged within the system.
- Marketing Automation
Customer relationship management tools with marketing automation capabilities are able to automate repetitive tasks to improve marketing efforts at various points in the life cycle. For instance, as sales prospects arrive into the system, it might send the prospects marketing materials automatically via social media or email, with the aim of converting a sales lead into a customer.
Contact Centre Automation
Designed to decrease tedious aspects of the job of a contact centre agent, contact centre automation might have pre-recorded audio that aids in customer information dissemination and problem-solving. Many software tools that combine with the agent’s desktop tools can control customer requests to simplify customer service processes and cut down on the call time.
Sales Force Automation
Sales force automation tools track interactions with the customer and automate specific business functions of the sales cycle, which are essential to follow leads and obtain, as well as attract new customers.
Geolocation Technology, or Location-Based Services
Some CRM systems consist of technology that can make geographic marketing campaigns on the basis of customers’ physical locations, sometimes combining with popular location-based apps. Geolocation technology can be used as a contact management tool or networking tool to find sales prospects based on the location.
CRM systems aid business in optimising processes by streamlining dull workloads, letting employees focus on high-level and creative tasks.
Human Resource Management
CRM systems help monitor employee information such as performance reviews, contact information, and benefits within a company. This lets the human resource department manage their internal workforce more effectively.
Sales leads can be monitored through CRM, allowing sales teams to track, input, and analyse data for leads in a single place.
Artificial intelligence or AI technologies have been built into a CRM platforms to automate repetitive tasks, determine customer buying patterns to anticipate future customer behaviours, and more.
Analytics in CRM aids in forming better customer satisfaction rates by examining user data and assisting in making targeted marketing campaigns.
Types of Customer Relationship Management Technology
The four vendors of CRM systems are SAP, Oracle, Salesforce, and Microsoft. Other providers are popular amongst small to mid-market businesses, but large corporations tend to choose these four. The kinds of CRM technology provided are as follows:
SaaS (software as a service) or cloud-based/on-demand customer relationship management data is stored on an external network that employees can penetrate anytime, anywhere, using an internet connection at times with a third-party internet service provider overseeing maintenance and installation. The cloud’s relatively easy and quick deployment capabilities appeal to firms with limited technological resources or expertise.
Companies may regard a cloud-based CRM as a more cost-effective option. Vendors like Salesforce charge on a subscription basis by the user and offer the options of monthly or yearly payments.
Data security is the main concern for firms utilising cloud-based systems, as the company does not physically control the maintenance and storage of its data. If the cloud provider runs out of business or is taken over by another company, the data of an enterprise can be lost or compromised. Compatibility issues can also emerge when data is initially migrated from the internal system of a company to the cloud.
Finally, price can be a concern because paying subscription fees for software may be more costly as compared to on-premises models.
This system places the onus of control, administration, maintenance, and security of the information and database on the company utilising the CRM software. With this approach, the firm buys licences upfront rather than buying monthly or yearly cloud-based subscriptions.
The software lives on the firm’s servers, and the user assumes the price of any upgrades. It usually needs a prolonged installation to completely integrate a company’s data. Companies with a complex CRM needs might gain from an on-premises deployment.
Open Source CRM
An open source CRM system creates a source code available to the public, allowing companies to make changes at no cost to the firm employing the system. Open source CRM systems will enable the addition and customisation of data links on social media channels, aiding companies seeking to improve social CRM practices.
Adoption of any of the above-mentioned CRM deployment methods depends on the business needs of the company, its goals, and its resources, as each one has a different price associated with it.
CRM Examples in Practice
CRM applications made for tablets and smartphones have become a necessity for marketing professionals and sales representatives who must access customer data and do their tasks even if they are not present in their offices. Mobile CRM apps take advantage of features that are exclusive to mobile devices, such as voice recognition capabilities and GPS, to provide marketing and sales employees access to customer data from anywhere.
Traditionally, data intake exercises for CRM systems have been the responsibility of the marketing and sales department, as well as contact centre agents. Marketing and sales teams procure leads and upgrade the system with data throughout the customer lifecycle, and contact centres collect information and revise customer history lists through technical support and service calls interactions.
Social media in CRM involves companies engaging customers directly via social media platforms such as Twitter, LinkedIn, and Facebook. Social media provides an open forum for customers to exchange experiences with a brand, whether they are promoting products or airing grievances.
To add worth to customer interactions on social media, companies use several social CRM tools that analyse social media conversations, from frequency of keywords used to specific mentions of a brand, to identify their target audience as well as the platform they use. Other tools are crafted to determine social media feedback and answer customer issues and queries.
Companies are interested in grabbing customer sentiments such as the likelihood they will suggest products and their complete customer satisfaction to develop service and marketing strategies. Companies try to combine social CRM data with customer data obtained from the marketing or sales department to get one view of the customer.
Another method in which social CRM adds to customers and companies is through customer communities, where consumers post reviews and can interact with other customers to research products or troubleshoot issues in real-time. Customer communities can offer low-level customer service for specific types of issues and decrease the frequency of contact centre calls. Customer communities can offer new feedback or product ideas that companies can employ in lieu of feedback groups as well.
Business-to-business (B2B) Practices
A CRM system in a B2B environment aids in monitoring sales as they move through the sales funnel, allowing a business to address any problems that might arise during the process. CRM systems in the B2B market help form more visibility into leads and, thus, enhance efficiency throughout the sales process.
Benefits of a CRM
There are several advantages of using CRM, and this is why small, medium and large organisations have started adopting CRM.
1. Streamline Your Sales Process
Most businesses’ sales were managed by themselves on email, Excel sheets, and various other static tools before CRMs came into the picture. While it is fine to utilise these for a small number of leads, it becomes harder to manage the customers and leads as the volume grows.
A static tool such as Excel cannot track the leads. This implies that the business will not know how leads descend their sales funnels or how they connect with the business. But with CRM, the company can track its lead’s journey down the sales funnel from the entry point to the conversion point and even after.
A CRM aids the business to ensure that there are zero leaks in the sales funnel. All the leads that enter the company’s system from any type of lead sources are accounted for.
2. Prioritise Who You Call
When the business has thousands of leads in its system, it might lose track of who to call first. This is due to insufficient information about the leads regarding which one is of higher value. Therefore, the sales department spend their valuable time calling each lead that comes their way.
However, leads that can actually convert into clients are at times missed out. The chances are that they have bought the company’s competitors’ products already or have lost interest in buying. A CRM helps the company prioritise its leads so that this does not take place. This could be through setting a lead score or tracking their activities or by grouping them in a list. This way, the firm can group its leads into buckets and engage with them accordingly.
3. Manage the Leads More Efficiently
Most CRMs have a lead management tool, which helps the firm to track its lead volume despite its enormity. As mentioned before, instead of struggling to remember how and where its leads are arriving, customer relationship management offers the option to control and manage these leads easily.
Instead of filtering through thousands of leads manually to discover that single lead the firm needs to contact, CRM helps it to quickly find the quality leads in its system. The firm can figure out how each lead is interacting with it as well. Some CRMs even let the company predict the closure of a specific lead.
4. Make Customer Interactions More Personalised
Despite the efficiency of a company’s sales team, it would be difficult to understand exactly what its leads want. They might be hesitant in sharing their purchasing intent most of the time. However, most CRMs have lead tracking or sales tracking features. This helps the company to know which web pages are being visited as well as how much time is being spent on them.
This is especially useful for those who sell online, as it allows the firm to know which category is being visited the most. It also lets the firm track customers’ conversations with its team. This way, the company can gauge which service/products attract the customers as well as the amount of interest they have in purchasing from it.
5. Increases Transparency in the Team
For any team or organisation to work efficiently without any internal conflicts, it is important for the system to be transparent. Working together, one department may get demoralised if they feel they are not being treated fairly or another department is being favoured more.
Customer relationship management helps resolve this issue as well since it can be used to communicate internally. Amongst the major points of dispute would be leads assignment. The department or team would be assured that the process has been unbiased by automating the entire process.
6. Save Time and Enhance Productivity
A salesperson has to manually check all the leads and update their owner and status in the absence of CRM. This decreases their productivity and takes most of their time. However, with a customer relationship management system, the firm can set tasks and rules to automate the routine tasks such as reminder emails, filling out order forms, etc., and let its salesperson concentrate on sales only.
7. Obtain Detailed Analytics on the Sales Process
A CRM comes with strong analytics features to obtain deep insights into the consequences of a firm’s sales activities. It helps to discover the best lead sources, demography, and geography that most of the customers belong to. The company can also find out the effect of the email campaigns that it runs along with revealing the customers giving out the maximum revenue.
The Key Takeaway
Customer relationship management refers to the way a business manages its relationships with existing as well as potential customers. It offers detailed information regarding a customer’s personal data, buying preferences, and purchase history to let the firm drive sales growth, retain customers, and improve customer service relationships.
CRM offers multiple functions including recording customer interactions over social media, phone, email, etc.; consolidating customer data into a single database, automating repetitive tasks, and providing managers with the ability to monitor productivity and performance based on data logged within the system.
These functions offer several benefits such as increased customer loyalty, improved sales productivity and forecasting, detailed analytics of sales, increased transparency within the organisation, and personalised customer interaction.