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Trade, the earliest form of business, has been a mainstay of human society right from our first interaction with one another. Of course, business then cannot be compared to what it is now, but the basic concepts have always been the same. There is a value exchange between one person and the other. This means that for each interaction, there is a customer and a business owner.
“The only constant thing in life is Change” – Heraclitus.
The above quote is one of the most popular quotes in history, perhaps because it is very simple and true. This quote also explains the change in how business is done in human society. The interrelationship between different sectors of our lives is another factor that drives change. For example, any technology innovation always finds its way into other areas of our lives.
Customer Relationship Management is one of the results of this constant change in how business is being done. The concept of CRM itself is as old as trade itself but it was never really conceptualized until the 20th century. So, let’s look at what CRM is exactly.
Table of Contents
- 1 What is CRM?
- 2 Benefits of CRM
- 3 CRM Case Studies
What is CRM?
CRM stands for Customer relationship management and just as its name implies, it helps business owners build and nurture relationships with their customers. This goes from the relationship approach to its efficiency and effectiveness.
The goal for any business is to make a profit. So, how does this happen, what are the value drivers? Simply put, having your customers spend more on your business than you do for a period shows a profit for that period. This may be the simplest definition you would find out there. Customers here comprise new and returning customers.
Although you want to make sure that you are always attracting new customers to your business, great effort should be placed on having a returning customer base. According to research carried out by Frederick Reichheld of Bain & Company, increasing your customer retention rates by only 5 percent increases your profit by 25 percent to 95 percent.
The ‘R’ in CRM is how you develop loyalty in your customers. Having an excellent product or service alone is not enough to keep your customers coming. Everyone wants to feel special, and the truth is, we all return to where we have been made to feel special, it’s just a natural response.
Benefits of CRM
We have talked extensively about the importance of focusing on the relationship with your customers, and I am sure by now, you have some understanding of its importance. Now, we are looking at the benefits of having a structured CRM system in your business.
A Centralized database
An important element of CRM is data and to be specific, customer data. Remember we spoke about making your customers feel special, one primary way of doing this is having a personalized business approach. For instance, a customer that purchases only a specific type of goods can be targeted with reminders or notifications on the availability of that product. But how do you know your customer’s preferences? Data.
Having a centralized database means your entire team shares a central database, aiding a quick and effective approach to customers. This means that your sales team doesn’t have to send reminder emails to the marketing team to get a customer’s data. Everyone can work in sync to build customer loyalty. The quality of data you keep is essential to lead conversion. According to KPMG’S 2016 Global CEO outlook, 84 percent of CEOs are concerned about the quality of data their decisions are based on.
Manage Communication with Prospect
The sales funnel is an important sales concept for any organization. It describes the path customers take from being prospects to customers. It is an extensive concept that may require a dedicated article. Communication is a vital part of the process and not just any type of communication. Your communication strategy must be targeted based on what stage of the funnel the customer is, and all the data you have of the customer.
Maintaining a CRM system in your business will help you plan and manage regular communication with customers. Your sales reps will be reminded when to reach out to a customer and how to reach out to that customer.
Customer segmentation is one of those technical methodologies that have crept into the business world over the past few decades. It has become a vital part of any serious-minded business, and for good reason. The type of marketing that a person from an older generation will need is so much different from what you a gen Z would require. To put it frankly, it will be quite foolish to generalize your marketing strategies and campaigns.
Apart from demographic segmentation, we also have psychographic, behavioral, and geographic segmentation, each with its uniqueness. So, you can appreciate the importance of segmentation.
A CRM tool will make customer segmentation a breeze by automatically grouping your customers for you. Your sales team can then target these different segments.
Detailed and Organized Reporting
Data has become one of the primary drivers of commerce today. Across all sectors of the economy, data has become a key component of major decisions. As technology develops, people are looking for more effective ways to produce results. One of the importance of analyzing data is that you can get useful insight that can help in making your next major business decisions. Now, you don’t have to make speculative and hopeful decisions, your decisions can be based on facts and figures.
For you to enjoy the benefits of accurate insight from data analysis, you need to ensure that the data you are working with is a true representation of your use case. A CRM system offers an effective way of collecting data through its detailed and organized reporting feature. The dashboards are platforms that offer a visual and relatable representation of data.
One of the biggest selling points of a CRM system is the opportunity for automation. Once you adopt a CRM system, you can automate several mundane tasks like logging calls, emails, interactions, and meetings. The system also automates the process of updating all your deals based on the stage they are in.
Another benefit of the automation feature that a CRM system offers is the fact that once reports have been collected by the system, the analysis is done automatically. For example, with this, your sales managers and reps will have insight into the most profitable lead generators for your business.
Foster Team Communication
As businesses expand their customer base and employee size, teamwork becomes a vital element of the business. This is even more pronounced in an organization where different teams like the sales and marketing teams are working on converting the same set of customers. In order not to duplicate efforts or infuriate your customers, every action taken by either team must be in sync.
CRM gives a seamless and efficient communication path among your team throughout the conversion cycle of your leads. An action as simple as tagging the right team members and managers on specific deals to bring them into the flow of the deal.
Increase the Efficiency of Administrative Tasks
One of the biggest determinants of how much profit you make as a business is how efficiently you can convert your resources into valuable output. These resources are time, human resources, capital, and so on. One of the most important of these resources is time.
In an environment with predominantly manual processes, your sales reps will spend a lot of valuable time doing inefficient tasks like sending emails, saving contact information, manual data entry, and a lot more. With a CRM system, your sales reps can spend their time doing tasks that have a more direct impact on the process of converting leads.
According to Salesforce, one of the leading CRM platforms, CRM can help increase sales by up to 30 percent. CRM also improves your customer satisfaction rate, leading to a greater customer retention rate.
CRM Case Studies
We have said a lot about CRM and its benefits. Now, let’s look at how some of the biggest businesses today have applied CRM in their various franchises.
One important thing that must be noted is the fact that these businesses have built their business on the single desire to satisfy their customers. Without this, CRM becomes just one of those tools that you use because your competitors are using it. You may not fully maximize the system.
Founded in 1976, Apple has grown to become one of the biggest players in the technology product space. One of the keys to Apple’s success over the years is their attention to customer satisfaction, which is quite evident in their products.
Apple ID is one of the features that the company introduced that helps them keep close tabs on their customers. This unique ID is synchronized across all the devices and keeps a record of the user’s preferences, thereby providing personalized recommendations based on this data. This gives the users convenience and a personalized experience, two things that can guarantee that your customers will always come back. Simply put, it is CRM done well.
Uber is a company that came to revolutionize the way we see the transportation business. The business has also grown significantly on its foundation of being a customer first. Salesforce is Uber’s CRM software provider and together, they power the CRM strategy for this business giant.
Salesforce helps the company extract relevant data from customers and the members of the public that engage with the brand on social media. With this system, Uber can track customer interactions and respond speedily to customer complaints.
Another CRM concept that Uber has successfully implemented is the Uber rewards, which lets users earn points every time they eat or ride with uber. These rewards can then be redeemed on any of their services.
Another example of a customer loyalty scheme done right is the British Airways Executive Club. This club allows British Airways customers to earn ‘Avios’ points when they make purchases on flights, holidays, rental cars, or hotel stays. These points can be redeemed as discounts on accommodation, travel, and other services that British Airways offers.
Apart from this, British Airways customers can save their seat and meal preferences, which gives them a much enjoyable and smooth experience. Customers can move up the tier from blue to bronze, silver to gold, and then Premier. To conveniently keep track of all these, British Airways uses Teradata as its CRM solution. This system helps keep track of its customers and engages them with targeted deals and offers.
Now, you understand why British Airways remains one of the leading airways today.
Productivity is a big word in any business venture. Not because of the number of characters the word has but because of the meaning of the word. In any serious organization, the goal of any decision is to increase the level of productivity of its employees, resources, and the business.
One way to ensure productivity in an organization is by engaging systems and technologies that improve productivity on all levels. Using a CRM system is one sure way to increase productivity across the board in your company. Your employees don’t have to spend time doing routine, non-challenging tasks. Another way a CRM system increases productivity is by bringing insights to your doorstep. With just a click of a button, you can get useful insights that will determine the next steps to take in your lead conversion journey.