At its core, customer relationship management (CRM) is all of the activities, strategies and technologies that companies use to manage their interactions with their current and potential customers. A saying frequently heard and said in many businesses is “customer is king.” Ue.co’s Jason Kulpa, a Forbes Agency Council contributor, explains the value of CRM and how every type of business can benefit.
CRM helps businesses build a relationship with their customers that, in turn, create loyalty and customer retention. Since customer loyalty and revenue are both qualities that affect a company’s revenue, CRM is a management strategy that results in increased profits for a business. A CRM tool creates a simple user interface for a collection of data that helps businesses recognize and communicate with customers in a scalable way.
Customer relationship management is simple. However, it can be implemented in a huge array of methods: websites, social media, telephone calls, chat, mail, email and various marketing materials can all be integrated into a CRM solution. Due to CRM’s diversity, it doesn’t only benefit larger businesses – using and maintaining a CRM tool is the basis for a scalable sales and marketing system. Any company will benefit from maintaining a record of which conversations, purchases and marketing material can be associated with leads and customers.
Small businesses and even freelancers can benefit from CRM processes as well. After all, who doesn’t want to increase their customer retention and, as a result, their profits? Some of the major ways in which CRM accomplishes this goal are listed below.
CRM helps businesses learn about their customers, including who they are and why they purchase your products, as well as trends in customers’ purchasing histories. This allows businesses to better anticipate their customers’ needs and, as a result, fulfill them.
CRM allows businesses to become more efficient by organizing and automating certain aspects of the business. From sales processes to marketing campaigns and business analytics as well as customer data, CRM automates and streamlines these processes for businesses.
Finally, CRM software allows businesses to optimize their customer interactions. By simplifying and streamlining many of the more complex customer interaction processes, CRM increases customer satisfaction.
Types Of Customer Relationship Management
There are many different types of CRM. However, most CRM software primarily focuses on one major category below.
Operational CRM usually has to do with one of the three types of operations: marketing, sales and service. Operational CRM is an important tool for lead generation because it frequently deals with past customer data such as previous marketing campaigns, purchases and service satisfaction. Because of its concentration on efficiency, operational CRM is a great fit for companies with a shorter sales cycle and high repeat sales like e-commerce or B2C retail verticals.
The main function of analytical CRM is to analyze customer data so that management can better understand market trends and customers’ wants and needs. The goal of analytical CRM is to improve customer satisfaction. Analytical CRM frequently uses data mining and pattern recognition to accomplish this task – it works well for companies in higher-priced markets with a lot of competition.
Collaborative CRM is when companies share customers’ information with outside companies and businesses. By pooling their data, certain businesses are able to create an even greater experience for their customers by obtaining data which they otherwise would not have had access. It’s an excellent fit for markets where innovation and new product development is paramount to success.
CRM is an excellent tool that allows companies to increase not only their customer satisfaction but also their efficiency and profits. CRM comes in a wide variety of strategies and applications, which allows it to be modified to fit virtually any business type. Almost every business can benefit from CRM software, and it is much better to start using a CRM for your business before it becomes necessary.