The beginner’s guide to CRM technologies, including what it is, how it works and how it can improve your business.
Customer Relationship Management (CRM) is the process of managing interactions between customers, partners, clients, consumers, or prospects, while CRM software is the application tool used to manage these interactions.
Marketing, sales, and customer service teams all make use of CRM solutions by collecting customer and prospect information and analyzing it to derive insights about their purchasing and engagement behaviors. Additionally, teams can manage relationships with other groups like partners, vendors, or members by using these solutions to track interactions and generate valuable data.
CRM tools provide companies with an organized way to view all of these types of people, their organizations, and their engagement with your company. However, as powerful as the tools are, sometimes your organization will need additional applications to augment the CRM and formulate a robust CRM ecosystem.
CRM software has evolved significantly in the span of a decade, from single software tools to solutions that integrate well with other applications inside a single ecosystem or platform. Today, CRM software is much easier to afford, implement, and adopt as technology becomes ubiquitous (or widespread). With the right mix of applications and effective implementation, CRM technology can help your organization improve customer experiences and sales engagements, driving growth and profitability.
CRM Basics
Full Customer Lifecycle Managed within the CRM
Several business processes are managed within a CRM solution to build and track a customer lifecycle: Lead Management, Marketing Management, Opportunity Management, Customer Management and Support Service Management. These individual processes have unique goals, yet they work together to help create a cohesive and well-orchestrated customer journey.
- Lead Management is the process of acquiring and managing leads until a purchase is made.
- Marketing Management are the processes of creating and implementing the strategies and tactics designed to create demand for a company’s products or services and customer retention and loyalty.
- Opportunity Management is the process of executing specific steps to ensure a sale is made.
- Account Management is the process of managing accounts, and the contacts within those accounts, to achieve specific goals around attraction, retention, and customer support.
- Service Management is the process of managing all service-related incidents. These can be related to outbound telesales to drive brand awareness to customer service supporting inquiries after a product has been purchased.
Identifying leads and opportunities within specific stages helps companies understand the strategies they should enact to drive sales. Additionally, these stages provide visibility into a company’s sales health, since all sales activities are captured to formulate a sales pipeline:
- Prospects begin as a Lead for your company when they either subscribe to your mailing list or have opted into receiving other forms of communication from you.
- Qualified Leads are prospects that have demonstrated their sales-readiness and willingness to learn more about your company.
- Sales Qualified Leads are those qualified leads that sales departments have accepted as “qualified” because they meet a certain threshold to be engaged by the sales team and are closer to purchase/conversion.
Used in conjunction with each Lead Management is Marketing Management, Campaign Management and Customer Management:
- Marketing Management is used to identify new leads, nurture them to become prospects and qualified leads, and support them once they become customers.
- Campaign Management is a subset of Marketing Management, or a strategic process of planning, executing, tracking, and then analyzing a specific marketing initiative. Campaign Management supports a company’s desire to segment their leads, prospects, and customers so they can tailor communications to them to motivate them differently. This is an invaluable process where different communications can be sent to leads, prospects, and customers across multiple channels and at various times. The ability for a company to identify who received which communications and how they are engaging is the key to understanding where they are in the customer lifecycle to determine the next step with them.
- Customer Management begins once a sale has been made and a prospect becomes a customer. Different industries and the types of products or services purchased define the cadence of re-engagement with a customer for renewal orders. But the goal is to continue to foster the relationship so that they become lifelong customers.
It is easy to see how these different processes work together to elevate customer satisfaction through the experiences they have with your company. Therefore, it is imperative for your organization to have a well-designed CRM to ensure success.
Benefits of CRM Software Systems
360-Degree View of Your Customer
There are many reasons why your organization may be considering a CRM solution. but the primary reason most companies choose a CRM is so they can obtain a 360-degree view of their customer, that is having the ability to understand all of a prospect, lead or customers interactions and experiences with your organization
A CRM solution will enable organizations to organize all contact, partner, customer, member, prospect, or other defined group’s data in a centralized database.
This data goes beyond the traditional “Rolodex-type” information. It includes information related to your company’s marketing efforts to them, the customer’s behaviors through website visits or clicking through an email, to understanding the make and model of a purchased item.
Ultimately, the information gathered can provide enhanced customer intelligence and predictive analysis to drive increased sales, increased customer satisfaction, and create seamless engagement with your company.
Scalable Sales and Marketing Processes
Robust sales and marketing processes are essential to help your organization achieve sales and revenue targets. Scalable processes are those that have been clearly defined, can tolerate increases in use, and can efficiently and effectively support key business priorities.
A well-designed CRM solution increases a sales team’s productivity by automating repetitive tasks, reducing duplicative work and data entry, and providing more accurate forecasting on sales revenues. It provides a way for sales representatives to manage their prospects and customers so that they can engage with these groups differently.
And, because the CRM is designed to analyze data efficiently, it can orchestrate all communication and interactions with prospects and customers and provide improved messaging when utilizing marketing automation.
Analysis, Insights, Trends
A well-designed CRM solution will provide your company with actionable insights related to your prospects and customers. These insights can help your company nurture brand advocates and identify trends related to their engagement with your communications, your product, on your website or social channels.
Additionally, analytics derived from your CRM’s data can help improve services to target, engage and retain customers.
Many companies are taking advantage of next-generation CRM features like predictive analytics. This entails the use of data mining, machine learning, and predictive modeling to identify trends and make future predictions based on historical and current data. One use of this is to assist your organization in identifying whom to engage, when, and how to best convert or retain them as customers.
Trustworthy Data
CRM tools can provide business intelligence and information that improve the capabilities of your business. Information related to marketing and finance can flow into CRM systems to be combined with other data to provide insights, metrics and visualizations.
As a result, your company can more immediately understand trends related to customer acquisition, retention, and sales growth. Through validation rules and field and object parameters established in the CRM, you can ensure that data is being entered accurately and completely, increasing your trust in the information you are using.
Increased Sales
Increased productivity and sales growth are a culmination of improved sales processes, pipelines, task automation and data analysis.
Building a solid sales process is the key to driving more sales. With a CRM, your organization has all the data it needs in one place to help support that sales process.
Whether it involves face to face meetings or online calls, live chat, social media, or online marketing and sales, a properly configured and used CRM gives your sales team a valuable window into the customer and their actions. This helps sales representatives optimize their schedule to focus on the most relevant opportunities.
However, customer churn remains a common obstacle in business growth. Fortunately, some CRM tools provide features like sentiment analysis, automated customer support and service automation to improve customer satisfaction, decrease churn and ultimately create repeat customers and increased revenues.
Simplified Collaboration
A major cause of inefficiency in business performance is the wasting of time, which is often the result of miscommunication and lack of information between teams. Organizations lose valuable work hours per week on redundant tasks, self-learning, or re-teaching things that a team may already know.
Collaboration in a CRM streamlines team building by creating a knowledge base, establishing workflows, and enabling seamless communication between members of various teams. CRM tools allow organizations to communicate with transparency within their organization while supporting their existing processes that are in place. This fosters mutual understanding, promotes team collaboration and consistency.
The Right CRM for Your Company
Even with a basic understanding of CRM solutions, finding the best one for your organization can be a daunting process because of the sheer size of the CRM marketplace and the number of features provided by each tool.
When in the market for a new CRM system for your company, below are the key considerations to keep in mind.
Identify Your Goals
Start by understanding the primary goals of your company in using a CRM system. Think both near term and long term since this is a business-critical system for your organization. This will help narrow your CRM options.
What are examples of external factors supporting or threatening your prospects and customers – and what would you look for in a CRM to alleviate or eliminate some of these factors? This will be important when formulating your goals for investing in a CRM.
Some common goals shared by companies include:
- Increase sales representatives’ productivity and revenue generation
- Increase profitability and margins across product lines or service offerings
- Strengthen customer relationships and nurture prospect engagements
- Elevate team collaboration to improve opportunity management
- Gain visibility into your company and your top customers
For your goals, it will be important to understand what metrics you will be using to track these, and how the CRM choices support them.
Understand What an Implementation Entails
It is important to understand all that an implementation entails prior to embarking on a CRM tool selection process or CRM implementation. Doing so will help ensure you discover the steps that need to be taken as well as special considerations for an implementation. Primary things to consider are:
- Current IT staff – Does your company have the IT bandwidth (size, availability, and skill) to support a CRM implementation, or is outside support required to either augment your current staff or manage the implementation process?
- Existing legacy data – Is there any legacy data that needs to be migrated and mapped to the new CRM? Who will be responsible for cleaning existing data to ensure it is ready for migration?
- Business processes – Are your current sales, marketing and service business processes clearly defined? How can these processes be translated into the CRM and utilize automations.
- Integrations – What other tools will exist in your CRM ecosystem that must be integrated with your CRM? Oftentimes, a CRM needs to integrate with an ERP, a payment processing app, a document management app or even an email marketing tool. Understanding the flow of information and how these systems will be integrated is important.
- The Three T’s or Timing, Testing, Training – Related to bandwidth of your current IT staff, it is important to consider the Timing of your implementation and how the rollout will affect your business. Making large IT infrastructure changes during quarter or year-end will certainly bring about some stress so it is important to consider the timing. Testing of designed features within the CRM should be handled by first the software implementer, then by the stakeholder or power user who can verify that it is supporting the business requirements. Training goes is key to user adoption which is discussed further below. However, it is imperative that you provide both formal and informal training to all CRM users and the IT staff that will support them and the system itself.
Mapping Business Processes
Most mature companies have clearly defined their business processes. However, as industries’ climates, customer purchasing behaviors, and channels in which products and services are sold constantly changing, your company’s ability to pivot quickly to react to these changes is crucial.
It is not enough to map current processes but critical to envision future requirements and design them into the CRM.
A CRM solution that enables a company to configure, modify and customize it so that its unique processes can be mapped is ideal. However, consider whether the modifications you desire are standard out-of-the-box, or if complex customizations are required. The latter usually costs more and may be more difficult to support over time
Change Management and User Adoption
Change is disruptive no matter how you look at it. For sales representatives, managers and other users of the CRM, a modification to how they work may result in an initial decline in productivity.
As you work through determining the right CRM for your company, also consider how you will manage change and user adoption. A Change Risk and Readiness Assessment will help ensure a holistic, integrated change strategy is in place to minimize any risks and maximize the likelihood of faster and less disruptive adoption of your CRM choice.
Remote Working
Because of the recent pandemic, remote work has become the norm for most companies. The pendulum has swung swiftly to cloud-based CRMs versus on-premise or desktop-based CRM tools.
Any company considering a CRM tool should consider one that is cloud-based if their workforce will be working in remote settings. A related consideration is how security and access to the CRM will work for remote team members (e.g., does single sign-on need to be supported? IP range restrictions, etc.).
The Different Types of Cloud-Based CRMs
The CRM marketplace is vast with solutions that support specific types of processes (sales, marketing, service, social), industries and company sizes (including scalable solutions).
Many types of cloud-based CRM products exist, and ones that you may want to review to find the best option for your company and customers include:
Sales Management CRMs
This type of CRM supports primarily sales and customer relationship management. These tools incorporate strong customer, lead, and opportunity management functions to create a robust sales management platform.
Sales Management CRMs enable companies to build sales pipelines and achieve greater visibility into opportunities, while also simplifying workflow and managing customer touchpoints in one platform.
Marketing Management CRMs
CRMs with a marketing focus help companies manage the marketing collateral, campaigns, and engagements with prospects and customers.
These tools enable companies to personalize interactions through prospect and customer segmentation, email nurturing, and social listening. They also provide robust ROI analysis by campaign, vehicle, communication, or other metrics unique to your company that will provide you with the insights your company desires.
Customer Service CRMs
Customer service CRMs provide companies with customer service support capabilities whether that is for a telesales call center or a customer service department. These tools are powerful workhorses that can be integrated with telephony systems, chatbots, or website forms to gather information from your prospects or customers.
Additionally, these CRMs can provide either an internal or external knowledge base so that you can provide valuable information to your community or customers.