In this article, we’ll explore what CRM means, and what it can do for businesses. You can also check our blog post where we talk about the types of CRM systems in more depth. And if you’re looking for CRM software, we’ve got you covered with a list of the best CRM software for small businesses.
What Does CRM Mean?
CRM stands for “Customer Relationship Management” and it is a system that businesses use to manage their interactions with customers, service users, colleagues, or suppliers.
When people say CRM they usually mean:
- CRM as technology: this is a software that is usually hosted in the cloud, and allows teams to store customer data, track and report interactions, and manage business processes.
- CRM as a strategy: it’s a business tactic of how companies should use technology, people, and processes to improve their relationships with customers
- CRM as an approach: is the culture and values that a company adopts in terms of its relationship with its customers.
In short, the term CRM is often used interchangeably with customer relationship management software, but it’s important to remember that CRM is much more than just a piece of software. It’s an approach that businesses can take to improve their relationships with customers.
What Does CRM Software Do?
A CRM software helps businesses to manage their customer relationships and internal relationships more effectively. It does this by providing a central place for all business processes.
CRM software can be used to:
Store customer data
This includes contact details, communication history, and any other information that the business has about the customer.
Track customer interactions
This includes phone calls, emails, meetings, and social media interactions. CRM software can also be used to track sales opportunities and deals through a sales pipeline.
“For estate agents and other property companies, CRMs have become an essential part of the everyday business process – particularly as so much activity occurs on a daily basis,” comments James Durr of auctioneer at Property Solvers in Brighton (UK).
Manage business processes
This includes tasks such as lead generation, opportunity management, quote creation, order processing, invoicing, and customer service.
What Does a CRM Strategy Do?
A CRM strategy is a business tactic of how companies should use technology, people, and processes to improve their relationships with customers. It helps businesses to identify their goals and objectives for managing customer relationships and then outlines the steps that need to be taken to achieve those goals.
A CRM strategy includes:
Improving customer satisfaction
Defining what customer satisfaction means for the business and then taking steps to improve it. This might involve changes to the way that customer service is delivered or changes to the products and services that are offered.
Increasing customer loyalty
Creating programs and initiatives that encourage customers to stay with the business, such as loyalty programs, referral programs, and retention campaigns.
Working out how the CRM software can be used to increase sales, such as by automating marketing and sales processes, or by using data from the CRM software to target customers with relevant offers.
Looking for ways to use the CRM strategy to reduce costs, such as by automating tasks that are currently done manually, or by eliminating duplicate data entry.
What Does a CRM Approach Do?
A CRM approach is the culture and values that a company adopts in terms of its relationship with its customers. It’s about how the company treats its customers and the attitude that it takes towards them.
A CRM approach includes:
Treating customers as individuals
Recognizing that each customer is an individual with their own needs and wants. This means that businesses need to tailor their approach to each customer, and not take a one-size-fits-all approach.
Communicating with customers
Keeping customers up-to-date with what’s going on, such as new products and services, changes to policies and procedures, or special offers. This can be done through email, social media, or face-to-face interactions.
Listening to customers
Giving customers a chance to provide feedback, and then using that feedback to improve the products and services that are offered. This might involve surveys, focus groups, or one-to-one interviews.
What Does a CRM System Include?
A CRM system includes the software, hardware, people, processes, and data that are used to manage customer relationships.
The software is the central part of the system, and it’s where all of the customer data is stored and where businesses track and manage their customer interactions.
The hardware includes the servers and storage devices that are used to store the customer data, as well as the computers that are used to access the system. It also includes hardware security devices, such as firewalls, to protect customer data.
The people who use the system include the employees of the business, as well as any contractors or partners that have access to the system.
The processes are the methods and procedures that are used to manage customer relationships. These can be manual processes, such as using a paper-based system, or they can be automated processes that are managed by the CRM software.
The data that is stored in the system includes customer contact information, such as names, addresses, and phone numbers; customer interaction history, such as email correspondence and meeting notes; and customer financial information, such as invoices and payment history.
It’s crucial to remember that while utilizing a CRM as a whole system, you must meet GDPR requirements if you want to avoid heavy fines.
CRM systems are not cheap and you need to have a dedicated team, as well as processes, in order for it to work properly.
What A CRM Doesn’t Do
A CRM doesn’t do the job of sales or marketing for you. While It’s not meant to handle the production, shipping, warehousing, financing, or engineering processes of your business.
Also, a CRM system doesn’t help if:
- Your team uses other tools to manage their processes – a CRM can only be as effective as the people who use it.
- You don’t have a plan or strategy for your customer relationships – a CRM can help you to manage your customer relationships, but it can’t tell you what those relationships should be.
- You don’t have the right data – if you don’t have accurate and up-to-date data about your customers, then a CRM won’t be able to help you.
- You don’t use it properly – a CRM is a tool that needs to be used correctly in order to be effective. If you don’t use it properly, then it won’t be able to help you.
When you break it all down, you can see that a CRM system is a powerful tool that can help businesses to improve their customer relationships. But it’s important to remember that it’s not a panacea, and it needs to be used as part of a wider strategy.
What Is An Example Of A CRM?
Customers like to be communicated with in different ways. For example, many WordPress customers like to receive updates about new features and plugins via the WordPress.org blog, while others may prefer to follow @WordPress on Twitter. A CRM system helps WordPress to keep track of all of their customer communication channels and interactions in one place, so they can provide a better experience and faster response to their customers’ requests.
A few more examples:
#1 Email Communication Management
A company like Quora uses a CRM system to keep track of all their users’ topic interests and email interactions. This allows them to send targeted and personalized emails to each user which increases users’ engagement on the platform.
Quora’s CRM system also helps them to keep track of users who unsubscribe from their emails, so they can take appropriate action to try and win them back.
#2 Gathering Business Insights
A company like Twitter uses a CRM system to track all the interactions between its users and customer service. This helps them to identify any areas where they need to improve their customer service, as well as any areas where they’re doing a great job.
It also helps them to identify any patterns in customer behavior that could be used to improve the user experience on the platform.
#3 Automating Marketing Tasks
A company like HubSpot uses a CRM system to automate its marketing tasks. This includes tasks like sending out email newsletters, as well as tracking the results of their marketing campaigns.
This allows them to focus on other tasks, like creating new content and leaves the CRM system to handle the tasks that it’s designed to do.
How Do Different Business Departments Benefit From Using CRM?
While a CRM system is most commonly associated with the sales and marketing functions of a business, it can actually be used to benefit all sorts of different business functions.
Here are a few examples:
- Customer service teams can track conversations across multiple channels
- Sales teams can increase business opportunities and sales pipeline
- Marketing teams can create personalized marketing campaigns
- Recruiting teams can better identify top talent
- Product teams can get feedback from customers
- Business development teams can find new partnerships
- Operation teams can better their relationships with suppliers
- Human resources teams can manage employee records
- Finance teams can keep track of invoices
Customer service teams can track conversations across multiple channels
A CRM system can help customer service teams to keep track of all the conversations they have with customers, regardless of the channel. This includes things like phone calls, emails, live chat, and social media interactions.
Sales teams can increase business opportunities and sales pipeline
A CRM system can help sales teams to identify new business opportunities, as well as track the progress of their sales pipeline. This allows them to close more deals and increase their overall sales figures.
Marketing teams can create personalized marketing campaigns
A CRM system can help marketing teams to create targeted marketing campaigns that are more likely to resonate with their audience. This can lead to more website visitors, as well as higher conversion rates.
Recruiting teams can better identify top talent
A CRM system can help recruiting teams to keep track of all the different interactions they have with candidates. This includes things like resumes, phone calls, emails, and in-person meetings.
It can also help them to identify patterns in candidate behavior that could be used to improve the recruiting process. It also can help teams identify future candidates for positions that haven’t even been created yet.
Product teams can get feedback from customers
A CRM system can help product teams to track all the interactions they have with customers. This includes things like customer support requests, as well as feedback from beta testers.
This information can be used to contact users and invite them to test new features, as well as conduct interviews to get detailed feedback about the product.
Business development teams can find new partnerships
A CRM system can help business development teams to track all the interactions they have with potential partners. This includes things like phone calls, emails, and meetings.
It can also help them to identify patterns in partner behavior that could be used to improve the partnership process.
Operation teams can better their relationships with suppliers
A CRM system can help operation teams to track all the interactions they have with suppliers. This includes things like supply, inventory, and delivery issues.
It can also help them to identify patterns in supplier behavior that could be used to improve the relationship.
Human resources teams can manage employee records
A CRM system can help human resources teams to track all the employee records. This includes things like contact information, as well as employment history.
It can also help them to identify patterns in employee behavior that could be used to improve the management of the team.
Finance teams can keep track of invoices
A CRM system can help finance teams to track all the invoices. This includes things like the date, the amount, and the status of the invoice.
It can also help them to find efficient ways to pay invoices, keep track of payments, and increase business profitability.
What Are The Benefits Of CRM?
There are many benefits of CRM, which is why it has become such a popular system for businesses. Some of the main benefits include:
- Improved contact management
- Cross-team collaboration
- Improved customer satisfaction
- Faster issue resolution
- The ability to scale quickly
- Increased sales
- Beter marketing ROI
- More targeted & personalized marketing
- Detailed reporting
- Better recruiting
- Improved product development
- Stronger partnerships
- Better forecasting
- Efficient invoicing
#1 Improved contact management
This includes things like keeping track of customer information, as well as managing customer interactions.
#2 Cross-team collaboration
This includes things like sharing customer information between teams, as well as working on customer issues together.
#3 Improved customer satisfaction
This includes things like tracking customer satisfaction levels, as well as improving and monitoring customer service.
#4 Faster issue resolution
This includes things like identifying and fixing customer problems quickly, as well as escalating issues to the appropriate team.
#5 The ability to scale quickly
This includes things like finding user acquisition channels through business analysis, as well as managing existing customer base growth.
#6 Increased sales
This includes things like tracking and increasing conversion rates and increasing the average order value while managing and improving the sales team.
#7 Beter marketing ROI
This includes things like tracking marketing campaigns, as well as measuring and analyzing their results.
#8 More targeted & personalized marketing
A CRM system can help businesses to target their marketing more effectively, by segmenting their customer base and creating targeted email or social media campaigns.
#9 Detailed reporting
This includes things like generating reports on customer behavior, sales data, job candidates, or marketing campaign results.
#10 Better recruiting
This includes tracking the performance of recruiting campaigns, as well as keeping track of job candidates’ responses, interviews, resumes, and more.
#11 Improved product development
This includes things like gathering customer feedback through monitoring, interviews, and surveys, as well as managing and measuring the results of the product development cycle.
#12 Stronger partnerships
This includes things like tracking and managing supplier interactions, as well as monitoring the performance of partnerships.
#13 Bette forecasting
This includes things like analyzing customer and market data to predict future trends, as well as using those predictions to make decisions about the business.
#14 Efficient invoicing
This includes things like tracking and managing invoices, as well as finding efficient ways to pay them.
In short, here’s what you need to take from this article:
What Does CRM Mean? CRM means “Customer Relationship Management” – It’s a system that uses software, strategy, and approach to manage different business processes like marketing, sales, customer service, recruiting, and more.
What Does a CRM System Include? A good CRM system should include the software, hardware, people, processes, and data to manage business processes more effectively.
What A CRM Doesn’t Do – A CRM software can automate some business tasks, but cannot replace a workforce. You’d need to have the right data, plan, team collaboration, and other tools in place to really benefit from a CRM system.
A company like Quora that uses a CRM system to send personalized emails to their customers based on engagement and other data points would be a great example of a CRM in action.
A CRM software can be used to manage customer data, track customer interactions, automate marketing and sales tasks, improve customer satisfaction, and more.
The benefits of CRM include increased sales, improved customer satisfaction, faster issue resolution, the ability to scale quickly, better marketing ROI, more targeted and personalized marketing, detailed reporting, better recruiting, improved product development, stronger partnerships, better forecasting, and efficient invoicing and more.
Elad Lev is the founder of Weshare.net – In love with words, videos and everything in between. His passion for helping people in starting a business online and teaching online is avid in every article he makes. In addition to his writing and content publishing.
We Also Reviewed
- 45+ Advertising Statistics That Will Blow Your Mind
- 41+ Public Speaking Statistics You Should Know
- 33 CRM Statistics You Should Know
- 34 Employee Burnout Statistics You Should Know
- 35 Machine Learning Statistics You Should Know
- 39+ Communication Statistics You Need To Know
- 37+ Cold Calling Statistics You Need To Know
- 21+ Entrepreneur Statistics You Should Know
- 35+ Contract Management Statistics You Should Know
- 35+ Sales Training Statistics You Should Know About
- 37+ Zoom Statistics You Should Know
- 75+ WordPress Statistics You Need to Know
- 41+ Startup Statistics You Need to Know
- 37+ Presentation Statistics You Need To Know
- 41+ Recruiting Statistics You Need to Know
- 23+ Apple Podcast Statistics You Should Know About
- 31+ Spotify Podcast Statistics You Should Know About
- 35+ Spotify Statistics You Should Know