Table of Contents
CRM (Customer Relationship Management) helps organizations manage and analyze customer interactions to improve service, retention, and sales. CRM accomplishes this by streamlining internal communications and business processes.
Customer Relationship Management (CRM) is an essential tool in the modern business landscape. Many think of CRM as a software program that tracks leads, new business outreach, and customer interactions.
But CRM goes far beyond just a software program. CRM is a strategy and set of practices to organize and enhance how your business interacts with its current, former, and potential customers. By streamlining processes, customer relationship management can improve service, strengthen loyalty, and increase sales.
This article will offer a more in-depth explanation as to what is meant by customer relationship management, explain the different types of customer relationship management, and highlight CRM in action. This includes real-world examples of how CRM can increase revenue and improve business performance.
Customer relationship management, often just referred to as CRM, means all of the practices, strategies, and technologies that a company uses to manage and analyze its customer interactions. This includes all the data points for every communication (attempt) throughout the entire customer lifecycle.
The ultimate goal is to continually improve customer service, retain customers, achieve sales growth, and increase profitability. This includes prospecting better leads, better onboarding, and better communication where everyone in the organization has the same information about any given customer relationship.
A CRM software system can collect customer data across multiple digital touchpoints and other channels of communication including website, chat, social, telephone, direct mail, PPC ads, SEO marketing, and email. The right software can comb through the data to identify trends and find ways to streamline processes.
It could even identify that outreach method A (call, email A, email B, email C) results in a 35% sales conversion rate, while methods B and C (with a different communication mix) have only a 28% sales conversion rate. This could mean providing recommendations for message scripting, email subject lines, social posts, and the right interval to target contacts for more finely tuned outreach.
This can encompass many sophisticated facets. But in one sentence, customer relationship management boils down to this: Customer relationship management improves customer service relationships.
From buying preferences and purchase history to their last complaint email, a CRM improves the data your business has about customers, how the data is shared, and best practices to make the most effective use of that data.
Customer relationship management centers around some fundamental concepts.
When discussing CRM, this can refer to operational processes, customer data analysis, or improved collaboration for managing customer relationships.
Operational CRM focuses on the day-to-day business operations related to all customer interactions, including sales and marketing. Operational CRM is concerned with organizing information about these interactions, and then using the data to improve and automate customer service, sales processes, and other outreach.
As an example of operational CRM in action, this could involve a CRM tracking a customer's interactions with customer service and their purchase history. If the customer contacts support, the CRM can provide the chatbot or human representative with immediate information about purchase transactions and previous issues.
Your business could then offer a personalized and efficient resolution. Many times, a customer representative will ask an irate customer why they are calling and then vex them further by asking them to retrieve hard-to-find information. With a CRM, the agent can greet the caller by name, and ask them "Are you calling about purchase no. XYZ that was made on date ABC that is scheduled to ship in X days?"
This area of CRM focuses on the data and how a business analyzes it to provide better customer service and improve business decisions. A CRM can pull in data from a variety of sources and then offer a 360 view of the customer journey. Here, a business can fully understand customer behavior, identify customer segments, and design more personalized and segment-based campaigns with better performance results.
A manufacturing company uses a CRM to analyze inventory and sales patterns, examining seasonal trends, customer response to ad campaigns, and the busiest times and days of the week. With this data, the company can be more strategic in its promotional offers and plan inventory levels to carry optimal product levels and drive higher campaign conversion rates.
Also referred to as strategic CRM, collaborative CRM is all about facilitating better collaboration among different business units, including sales, marketing, finance, chat support, and C-suite. CRM data is easily shared among all business units for more effective collaboration and delivers better, more consistent customer service.
In a tax services company, different departments with access to CRM data can use it to make data-based decisions that best meet customer needs and are aligned with other business units. Directly shared information allows the product team to curate the software to customer needs, instead of the sales and customer service teams relaying customer requirements (complaints). Working together, the company can provide more effective solutions and increase customer satisfaction. Additionally, it lessens the time that other departments need to spend on gathering product requirements and allows them to focus on their assigned job roles.
Companies use CRM software systems to improve customer retention and day-to-day interactions, increase sales, and streamline internal communications among all business units.
A CRM program can improve interactions with customer service representatives. With the CRM consolidating all customer information within one single interface, all departments can better manage customer relationships.
This means tracking purchase history, providing curated recommendations, and quickly viewing any recent "wins" or outstanding account issues. This more personalized approach increases customer loyalty -- clients feel seen and understood as an individual relationship, not a cog in the wheel.
One of the most direct impacts of CRM systems is the increase in sales. By leveraging detailed customer data, companies can identify the right moments to approach customers with offers and promotions. A CRM system can help in segmenting customers based on their buying patterns and preferences, allowing for more targeted sales strategies. For example, a CRM might reveal that New England customers tend to purchase more during specific seasons or in response to specific promotions. The sales team can time their offers and messaging accordingly.
One central repository to house all customer information, instead of bits and pieces spread out among different departments, greatly streamlines operations and improves customer outreach. With one CRM as a source of truth, all departments are on the same page. This greatly reduces the chance of miscommunication and failure to meet customer expectations.
If an account manager or customer service representative updates a client's contact preferences, the marketing team can use that information to adjust their campaign strategies -- including which platforms to use for targeted outreach.
A CRM platform can optimize business operations, automating manual tasks such as data entry, email follow-ups, reminders, and generating reports.
With a CRM handling these routine tasks, team members can focus on value-added activities. And working off of CRM insights, your team can concentrate on the most productive opportunities. As an example, a CRM platform can automate the lead qualification process, scoring leads for their likelihood to convert based on analyzing sales cycle data.
Sales departments will save time, energy, and above all frustration. A CRM enables them to focus their time on leads with the highest conversion (highest commission) potential.
Salesforce is perhaps one of the most well-known examples of a customer relationship management (CRM) system. It's a leading global platform to house, track, and analyze customer data to improve customer service, automate external communications, streamline internal communications, and track leads and sales pipelines.
Worldwide, Salesforce has over 150,000 licensed users. However, the number of U.S. workers who have used the platform (manually entering in customer data) likely exceeds 1 million.
Mailchimp is another CRM example that most people are familiar with. Known as a business email marketing platform, for companies who need to do mass email sends, Mailchimp can automate sends and then manage and analyze customer interactions. If you've ever received an email as part of a bulk send, there's a good chance the business or organization used Mailchimp.
Mailchimp can also create and track different audience segments, personalize communications, track leads, and tie an email campaign to revenue (i.e., $1,000 per every 10,583 emails sent to Customer Segment XYZ).
Here are some real-life examples of how actual businesses have used CRM systems to improve customer service processes and grow their business.
Marmon Water, a global water treatment company, has used Epicor Kinetic CRM functions to streamline business communications across 11 countries. Using the cloud-based CRM system, workers around the globe can enter, track, and monitor the same data. Reports that previously took 15 minutes can now be generated in just a few minutes, for a 400% increase in decision-making speed and efficacy.
Using Epicor's CRM, along with other Epicor software, has sped up Marmon's shipment processes by 92%. Previously, it would take the shipping team an hour to complete all the paperwork for overseas shipments, but now the process has gone from one hour to five minutes.
Fire detection manufacturer, Detectortesters, switched to Epicor Kinetic and Epicor Mobile Warehouse, with built-in CRM integrations, to update manual, paper-based warehouse processes.
This shift led to a 50% reduction in lead times and operational costs. Detectortesters also reduced its production run planning time by 80% (reduced from five days to one) and order picking time was cut by 57% (reduced from seven hours to three).
As a result, Detectortesters has significantly minimized errors in order processing, picking, order dispatches, and documentation accuracy, and boosted its regulatory compliance and customer service capabilities.
UK-based metals manufacturer, Progressive Technology Group, has used Epicor's CRM technology to enhance their on-the-spot customer recommendations, improving their sales and marketing and increasing revenue by 213%.
Through immediate, automated analysis of customer data, Progressive has refined its understanding of customer preferences and behaviors, leading to more accurate and effective targeting.
Since 2016, the company has seen phenomenal growth, going from 80 employees and $10 million in annual sales to over 240 employees with annual sales totaling more than $32 million.
The managing director has stated that their business would not "have been able to survive our business expansion periods" without Epicor Kinetic and its CRM functionality.
RMF Systems, a hydraulics solutions manufacturer, used Epicor's CRM systems to grow their business and production volumes by 70% without having to increase headcount. RMF attributes this growth to the automating and streamlining of customer data, enabling the company to quickly make informed decisions to optimize business operations and drive sales growth.
RMF set aside a full weekend to transition to Epicor Kinetic (cloud-based system), but the transition took only 15 hours.
An efficient CRM system solves a number of real-world business problems.
Communications lack personalization: CRMs can easily segment their customers for more targeted marketing efforts and personalized communications.
Although CRM systems solve a number of customer relationship management challenges, there are some downsides to using them too.
Manual Data Entry: Many data points are manually entered by sales reps and other software users. The effectiveness of a CRM relies on the accuracy of data entered, and the enthusiasm of workers for adopting these systems.
No, Excel is not a CRM tool. While this spreadsheet software shares some of the same features, notably its ability to store vast amounts of customer data, it lacks the interactive and automated features of a CRM tool. Excel is not built to manage customer relationships and has limited real-time data processing abilities.
When assessing the business need for a CRM, think about different aspects of your business operations and how customer interactions are currently managed. If one or more of these indicators applies to your company, it might be time to consider a CRM system.
Inconsistent Customer Service: CRMs offer customer support teams a broader view of customer interactions for more personalized and consistent service.
CRM systems are not just a luxury tool for large corporations. In a digital age, CRMs are vital for businesses of all sizes to remain proactive and competitive in a continually evolving market.
CRMs are much more than a Rolodex-like storage tool. CRM systems can segment audiences, automate outreach, personalize communications, streamline business processes, increase sales, and improve customer service and satisfaction.
The benefits of CRM tools go far beyond landing new sales accounts or customer service chat sessions. We've shared some real-life examples where CRM programs can reduce order pick times by 57%, speed up shipment processing times by 92%, and increase revenue by 213%.
Reach out for a free consultation to learn about customer relationship management solutions and explore the best CRM strategy for your business.
