The Importance of Customer Relationship Management

Building strong, long-lasting relationships is a key ingredient in the success of any business. And thanks to Customer Relationship Management (CRM), there’s an entire discipline dedicated to strengthening connections with customers, streamlining the methods to do so and, ultimately, improving profitability.

Below, we’ll define CRM in more detail, run through how it works and why it’s important for businesses – so that yours can start benefitting from CRM’s power in the near future.

What is Customer Relationship Management?

CRM is a system that companies use to manage and analyse their interactions with current and potential customers. CRM systems are used to improve customer service relationships, retain customers and improve sales growth by tracking each interaction a business has with a prospect or customers. 

Over the years, CRM has transformed from traditional, on-premise systems that focus on data management and tracking sales activities, into newer cloud-based systems that offer more functionality, improved accessibility and more user-friendly interfaces.

Let’s look at the nuts and bolts of how these systems manage and analyse these interactions in more detail below…

How does CRM work?

Collection and storage of customer data

Traditional CRM collects customer data from various communication channels, such as a company’s website, telephone history, email, live chat, and marketing materials.

Once this data has been gathered, it’s then ready to be analysed in more depth.

Segmentation of customer base

By breaking down the data based on certain demographic information like age, location and job, as well as their online behaviour and purchase history, CRM systems then easily create audience segments for you to put to use.

Use of data to automate marketing and sales workflows

CRM systems can track customer interactions and then use this data to automate the right business functions of your sales cycle. Likewise, certain systems can also automatically send marketing emails or publish social media posts, helping to keep sales leads engaged while you focus on other activity.

Integration with other business tools

To improve your sales and marketing activities and strengthen the flow of information even more, the right CRM system will be able to effectively integrate with your other business tools, whether it’s your email system, social channels or right down to operational tools like billing, accounting and document signing.

Reporting and analytics features

CRM systems have plenty in the way of reporting and analytic features to gauge your performance with. By analysing customer engagement, campaigns and other data, businesses can then identify trends and patterns to optimise their strategies and resource allocation more effectively.  

Why is Customer Relationship Management important for businesses?

Streamlines the sales process

A CRM has the potential to capture and convert more prospects into valuable leads and loyal customers, streamlining the sales process by doing the following…

• Automating drip sequences and emails so you can follow up with prospects at the right time
• Managing prospects across your sales funnel by viewing which stage they’re at in real time – and prioritising your hotter leads
• Creating a more effective sales handoff process, transitioning leads over to sales at the ideal moment

Elevates customer service

Unsurprisingly, CRM can do wonders for your customer service too. With a bank of customer interactions and history to track, it’s much easier (and quicker) for your team to respond to inquiries, deal with issues, and deliver more personalised communications to different customer segments.

Improves customer loyalty and retention

And all of the above has the added advantage of improving customer retention and loyalty. With it being more cost effective to keep hold of existing customers over gaining new ones, CRM systems can identify and prioritise the customers providing you with the most value.

When you know who these are, you can then tailor specific retention strategies to them, addressing their pain points, supporting them more thoroughly and offering incentives and discounts based around the products you know they love.

Allows for data-driven decision making

When you can rely on hard figures and stats to base your decisions on, your business stands to improve its chances of marketing success. By monitoring and analysing the data you have to hand, you’ll know what’s working (so you can do more of it), what isn’t (so you can do less of it) and adapt your approaches to the changing needs of your customers.

What are the key benefits of CRM?

Centralised access to customer information

When all your customer information is in one place, it stops silos from forming – and key info getting lost. Not only does this make finding everything you need far easier, but it means understanding who your customers are, and what they’re drawn to clearer as well. All of which gives you the key ingredients you need to optimise your interactions and better personalise the experiences you provide.

Better communication across teams

With the ability to freely share data across your sales, marketing and support teams, along with real-time info and updates, inter-team communication becomes far stronger – especially if your CRM has messaging capabilities that allows colleagues to chat and send files and information to each other through too.

Improved customer engagement

By offering more personalised communications and offers through emails, social media and other channels, your customers are more likely to engage with your brand – and refer you to others who then do the same.

Let’s say you offer hiking equipment. The data gathered through your CRM will let you build and send emails to customers who have purchased specific products, offering them info or discounts on related items. Or you might have a loyalty program you can invite them to. Whatever you’re offer is, these personalised messages can have a positive effect on audience engagement.

Improved sales conversion rates

Ultimately, all of the above benefits add up to create higher sales conversion rates. When it comes down to it, CRM efforts are profit driven, much like a lot of things in business. Improving your CRM involves activity that tends to be centred around moving your customers along the funnel – so it makes perfect sense that the more customers you push towards a purchase, the higher your sales conversion rates will be.

Why you should invest in CRM Software

CRM isn’t a cure-all that magically makes all your customer woes go away. You’ll still have to be pro-active about making it work once your business is set up with one. And while that takes effort, time and manpower to achieve, it can often be well worth it in the long term. There’s no shortage of studies and statistics on how high the ROI of a CRM is in case you were wondering, but if you’re still sceptical, we’d definitely recommend scoping them out in case you need some more convincing before you go ahead with purchasing yours.

Improve your Digital Marketing Maturity

The effectiveness of a CRM can also depend on your business’ current level of digital marketing maturity. If you aren’t at the right level, then attempting to move into areas of activity you aren’t ready for can backfire.

But we’re here to help. By taking our quiz, and then plotting yourself on our Digital Marketing Maturity Matrix, you’ll be able to identify your current level – and then the right levers for you to pull so you business can start progressing.

Fill in the form below to unlock your level of maturity.

Something blocking your customers from making those all-important purchases? Our team are well-versed with creating a customer journey without roadblocks and restrictions. Head here for more information, or give us a call on 0345 459 0558.