CRM
1. What is Customer Relationship Management?
WHAT IS BEHIND THE ABBREVIATION CRM?
The abbreviation CRM stands for Customer Relationship Management. As the term suggests, CRM is a strategy that serves to systematically design interactions and relationships with existing and potential customers. It includes all of a company's customer-related processes as well as their planning, control and implementation.
The focus of customer relationship management is on building long-term customer relationships through personal and individualized interactions. Collecting, managing and organizing customer data plays a central role in this.
CRM is often used as a synonym for the term CRM system. However, there is an important difference here: While CRM describes a company strategy, the term CRM system refers to software that is used to implement the strategy.
2. What types of CRM are there?
WHAT COMPONENTS DOES THE CRM CONSIST OF?
Customer Relationship Management is a holistic, complex and, above all, customer-oriented approach to business management. To understand exactly how CRM works, it makes sense to look at the four components that make it up:
COMMUNICATIVE CRM
Communicative CRM is dedicated to managing all communication channels that your company uses to contact customers. An important aspect here is that emails, calls, letters and all other channels are synchronized and coordinated. This gives you an overview of which communication channel is best for reaching which contact.
OPERATIONAL CRM
This component of CRM is responsible for collecting basic data from sales, marketing and customer service. This data can be, for example, offers submitted or returns. Operational CRM provides information about a specific contact as well as general trends. Since the quality of the data is crucial for the overall efficiency of the CRM, particular care must be taken when maintaining the data.
ANALYTICAL CRM
Operational and analytical CRM are closely related: operational CRM provides data from which analytical CRM then draws conclusions. This can provide valuable insights into customer behavior and characteristics. Target groups can also be segmented and general offer management improved.
COLLABORATIVE CRM
This component deals with the collaboration between different teams, such as marketing and sales. But it also refers to the coordination between internal and external parties (e.g. suppliers, customers or business partners). Thanks to collaborative CRM, work processes can be made more effective, which ultimately has a positive effect on the customer relationship.
INTRODUCING CRM
We support you in the introduction of marketing and sales automation measures in your company.
3. What are the benefits of CRM?
HOW DOES YOUR COMPANY BENEFIT FROM CRM?
The interaction of the various CRM components results in several advantages for your company. By collecting valuable customer data, the marketing team gets a comprehensive overview of each prospect. Further approaches can then be tailored even more precisely to the target group. In addition, it makes it easier to track the customer journey, which contributes to a better understanding of the sales pipeline. This allows potential problems to be identified and resolved more quickly.
Thanks to coordinated communication channels, customer service can follow and continue conversations across channels. For example, a conversation can begin as an email and be continued later as a phone call without losing important information. This smooth handling of conversations increases customer satisfaction, which in turn has a positive effect on the relationship with your company.
Successful customer relationship management is characterized by the development of a long-term and stable customer relationship. This means that the relationship with a customer does not end with a purchase; on the contrary: this is where the real work on customer loyalty begins. By continuing to work in a coordinated manner based on the customer data collected, sales staff have the opportunity to turn a customer into a loyal advocate for the company. This is where CRM comes in to provide support by showing you cross-selling, re-selling and upselling potential. The customer data collected also helps with maintaining existing customers, who are encouraged to make repeat purchases with a successful CRM.
4. Which areas are optimized by a CRM?
WHAT DOES A CRM DO?
As a comprehensive database that maps all customer-related processes, a CRM system can be seen as an intermediary between your company and the customer. By recording all relevant customer data and processes, the software enables your employees to learn about the behavior, characteristics and needs of potential and existing customers. Sales is thus able to create individual offers for individual customers or customer groups, while customer service offers tailored support. In short, a CRM system helps you keep customer contact details up to date, record customer interactions and manage customer accounts.
LEAD GENERATION AND MANAGEMENT
The information provided by the CRM system can be used to target prospective customers and thus boost lead generation. The contact details collected are entered directly into the CRM system. By recording all of a lead's activities and automatically assigning the relevant tasks to employees, the CRM system can also provide seamless support to prospective customers until they convert.
COOPERATION BETWEEN MARKETING AND SALES
A CRM system is not only an intermediary between the company and its customers. It also simplifies collaboration internally, particularly between marketing and sales. Both departments must have constant access to certain customer data and coordinate their actions to ensure high levels of customer satisfaction. As a database, a CRM system offers a common platform on which all data is accessible to all departments, thus facilitating collaboration.
ANALYSIS OF THE DATA
The data stored in the CRM system can be used to create extensive analyses and sales forecasts. CRM systems usually include a reporting function, which means that regular reports are created on the efficiency of the pipelines. Using such a report, you can see, for example, how far you are from a certain goal or where improvements need to be made.
OFFER MANAGEMENT
A CRM system can be used to organize matters with suppliers and business partners in terms of inquiry and offer management. With regard to customers, a CRM system makes it easier to provide after-sales services and to customize customer service. Both aspects contribute to high customer satisfaction, which in turn ensures that the customer recommends your company to others.
MARKETING AUTOMATION
With a CRM system, certain redundant marketing processes can be automated and thus made more efficient. The contact details of the leads are not only automatically saved and segmented. If a visitor subscribes to your newsletter, for example, the information is also automatically sent to them as an email. This simplifies lead nurturing and at the same time ensures that no valuable contact is overlooked. Since it records how a lead interacts with the email (e.g. whether they click on a link), the subsequent communication can be completely tailored to their interests and preferences. The fact that less work has to be invested in the automated processes also saves resources.
5. What is a good CRM?
WHAT IS IMPORTANT WHEN CHOOSING A CRM SYSTEM?
There are many different CRM systems on the market, each of which meets different requirements. Which CRM system is right for you depends, among other things, on the industry your company belongs to, as customer processes differ depending on the industry.
Basically, a CRM system for larger companies should respond to the following challenges:
- Complex IT infrastructure: The larger a company is, the more complex its IT infrastructure is. As the company grows, it often happens that more and more applications are installed to meet new needs. A CRM system must bring together all the existing systems that have each taken on subtasks of customer relationship management. It should also be possible to connect it to the company's own ERP software.
- Multi-client capability: As the size of a company increases, the internal structure becomes more complex, as does the IT infrastructure. This is particularly the case with large corporations. A CRM system must ensure a loss-free and seamless flow of information; this is the only way to get the greatest possible benefit from the software. It is therefore advisable to use a holistic, multi-tenant system for the parent company and subsidiaries. Multi-tenancy refers to the ability of a system to manage multiple users on the same server or software system without all of the other users' data being visible.
- voice interfaces: This point is particularly relevant for companies that operate internationally. A CRM system must be able to serve all of a company's locations and therefore provide appropriate language versions.
- Local Support: Not only does the software itself need to be available in the relevant languages, but if a problem occurs, your employees should be able to contact support without a language barrier. It can also be helpful if the provider can help solve the problem directly on site.
In addition to these requirements that a CRM system should meet and the industry your company belongs to, the following three factors also play an important role in choosing the right software:
- The number of employees or the size of your company
- The required number of users
- The development of the number of employees over the next three years. From this, a possible change in the number of users can be derived, which will influence the future costs of the CRM system.
When choosing the right CRM system, it also helps to define goals in advance that you want to achieve with the help of the software. In addition, ask yourself what exact improvements you hope to achieve from the purchase. Then use this as a basis to formulate the specific requirements that a suitable CRM system should fulfill.
6. How does marketing automation differ from behavior scoring?
WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF A CRM SYSTEM?
A CRM system supports your company's customer-centric strategy in many ways. This brings with it a number of benefits, some of which can be felt even shortly after implementation:
- A CRM system centralizes all information about potential and existing customers. This means that all departments have access to all relevant information at all times and can work together smoothly.
- Potential sales opportunities can be identified more easily and quickly. The analysis of existing sales processes carried out by the software also allows them to be continuously optimized.
- By evaluating the stored customer data, you get to know your target group better and can tailor your marketing strategies even more precisely to their interests.
- Certain processes can be automated, thereby saving costs in the long term. The constant optimization of processes also has a positive effect on your finances in the long term.
- Some CRM systems support their users in complying with legal requirements using certain functions. This is particularly relevant because customer relationship management involves processing personal data and this procedure is subject to the General Data Protection Regulation.
A CRM system is a complex software that can have a few potential disadvantages. However, these can usually be minimized through forward planning:
- Choosing the right CRM system can present a company with challenges that it did not expect. To avoid being surprised by these challenges, make it clear to yourself step by step what requirements the CRM system should meet.
- The introduction of a CRM system will bring about a radical change in the way your employees work. The software may therefore be met with resistance by some. To avoid this, you should develop an appropriate change management strategy.
- There is no guarantee that the introduction of the CRM system will be successful and that all employees will be happy with the software. However, this risk can be greatly reduced through thorough planning and preparation.
7. What are the costs of using a CRM?
HOW MUCH DOES A CRM SYSTEM COST?
How much a CRM system costs varies from provider to provider. There are also a few other factors that determine the price:
- Cloud system or on-premises: Depending on which license model you choose, the price can be higher or lower and when the majority of the costs are due also varies. For example, the introduction of on-premises software usually involves a high initial investment. However, the monthly fees are usually lower. Cloud systems, on the other hand, charge a lower price initially, but their follow-up costs are often significantly higher.
- features: The cost also depends on how many functions are required. Most CRM systems are scalable, so the range of functions can be adapted to the needs of the company.
- Number of users: The costs increase with the number of users. It should be noted that the number of users and therefore the costs can change due to growth.
- Adjustments: In some cases, the software must be fully customized to the company. This requires a lot of work on the part of the provider, which in turn drives up the costs. If no customization is necessary, the overall costs are lower.
- Add-Ons: It is not uncommon that add-ons are required in addition to the CRM software. Setting these up also increases the costs.
8. What CRM news is there?
CRM TRENDS
Various trends have developed over time in the area of customer relationship management. The three most important are as follows:
MOBILE CRM
This trend refers to the mobile availability of contact-related data in CRM. This is an important factor for efficient work, especially for employees in the field or those working from home. Mobile CRM is not just limited to making mobile access easy for users. It is about making access simple and convenient.
SOCIAL CRM
Social CRM incorporates data from social networks, for example in the form of web monitoring. The social networks are searched for mentions of the company or product. In a further step, the associated context is analyzed to find out whether the term is mentioned in a positive or critical way. The public profiles of the target group are also examined, which then allow conclusions to be drawn about demographics.
XRM
xRM is also known as “Any Relationship Management”. In addition to customer relationships, relationships with all other parties associated with the company are organized and maintained. This approach creates a more accurate picture of the ongoing communication processes.
YOUR COMPANY BENEFITS FROM CRM: OUR CONCLUSION
Customer relationship management is suitable for any company that values long-term and stable customer relationships. In order for the strategy to be successfully implemented, marketing, sales and customer service must concentrate their efforts on the customer. This is achieved by collecting, managing and organizing customer data centrally. This is where the CRM system comes into play, which acts as a database that forms a hub between departments and at the same time acts as an intermediary between the company and the customer. With the help of a CRM system, customer-related processes and the acquisition of new customers can be continuously optimized, which ultimately leads to an increase in sales.
Would you like to learn more about CRM or would you like comprehensive advice? Please feel free to contact us!