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What is CRM? The Definitive Guide to CRM Success (Strategy, Process, Trends)

What is CRM? Customer Relationship Management

Post summary:

  • What is CRM, what does it stand for and why should your business care about it? We answer all these questions and more to show you how CRM can benefit your business.
  • How does CRM align with sales, marketing and customer service departments? By putting the customer first, you can break down organizational silos and become a customer centric company. 
  • CRM is more than technology. When implemented successfully, CRM helps you build better customer relationships, increase company revenue and create a superior customer experience.

You've heard the acronym before.

And you know that the 'C' is for customer....

But, what is CRM?

CRM stands for Customer Relationship Management.

It's a company-wide business strategy designed to improve revenues and profitability, reduce costs and increase customer loyalty.

The CRM philosophy is simple:

Put the customer first.

When your business looks at every transaction through the eyes of the customer, you can’t help but deliver a better customer experience, which in turn increases loyalty to your company.

For example;

  • 86% of customers are willing to pay more for a better customer experience
  • Customer centric companies are 60% more profitable than those that aren't
  • 1 in 3 customers will leave a brand they love after just one negative experience

CRM software brings together all information from different departments throughout the company to give one, holistic view of each customer in real time.

This allows customer-facing employees in areas such as sales, marketing and customer support to make quick and informed decisions on everything from up-selling and cross-selling, to improving the quality of customer communication and responsiveness, to coordinating the management of sales and marketing campaigns.

crm strategy

When implemented successfully, CRM gives companies not only insight into the opportunities to grow business with each customer, but a way of measuring their value.

Why is CRM important to your business?

CRM is more important than ever to businesses because it can help you to gain new customers and retain existing ones.

And the CRM industry shows no signs of stopping!

report by Gartner found that CRM software revenues have now overtaken database management systems to become the largest of all the software markets!

crm revenue forecast 2025

In today’s highly competitive environment and with so many products and services to choose from, customers are picky and customer loyalty seems to be a thing of the past.

The moment a new product is introduced into the market, it takes only a few months before that product or service suddenly becomes a commodity, which, in turn, means it’s easy to switch companies.

And despite what you might think, not all customers are created equal.

Some are a drain on customer service teams despite spending very little. Other customers do business frequently, often buy new products and services and may even be strong influencers in their market.

In cases like these, CRM helps prioritize sales and marketing efforts when dealing with different customer groups.

It also gives companies a better way of understanding customer needs and wants in order to improve the way the product portfolio is offered to them. The more you know about your customers, their buying preferences and behavior, the more likely your offer will be on target.

crm builds strong customer relationships

How does CRM work?

Although some people think of CRM as just a technology, it is so much more than that.

No technology, no matter how sophisticated – can be successful without a strategy to guide its implementation and use. Business strategy and technology must work together in order to bring a customer-centric plan to life.

Let's take a look at the role CRM plays in customer-centricity, customer data management and automation.

1. Supports a customer-centric strategy

A CRM system supports a strategy which says that the customer is at the center of everything that you do. This customer-centric strategy must be based on clear goals and a vision of what a meaningful experience looks like.

customer-centricity

A valuable customer experience is an integral part of CRM, according to Gartner’s report, “Improving the Customer Experience”.

Every time a customer comes in contact with an organization, through any of its channels, the customer has an opportunity to form an opinion – be it good, bad or indifferent. Through time, this collective set of customer experiences forms a picture in the customer’s mind, which in turn, forms the image of the brand and values.

Organizations that are serious about CRM design and maintain a quality customer experience because they recognize that a poor customer experience is a step toward customer churn, whereas a good experience encourages loyalty.

2. Centralizes all your customer data

CRM software combines all sales, marketing and customer service information into one central database.

With 92% of businesses collecting data on prospects and customers, having access to all data in a database means fewer silos within your organization - thus helping you achieve customer centricity.

customer-centric challenges

What kind of customer information is being collected?

Customer information includes, but is not limited to, phone numbers, addresses, and last contact made. The software also records what was discussed, what the next follow-up date is and even the status of an open item - all of these play an important part in being GDPR compliant.

This information can then be used to manage, measure, and keep track of marketing, sales and customer service activities as they relate to the customer. Overall, it builds greater customer loyalty and a better customer experience.

Since a CRM system centralizes all customer-facing information, silos and finger pointing are significantly reduced. Sales can’t blame Marketing for not communicating with them. Marketing can’t blame Sales for not implementing their campaigns and Customer Service can’t blame Sales for disgruntled customers.

Everyone has the same access to the same customer information - giving you a complete 360-degree view of the customer.

360 degree view of customer

3. Automates customer-facing business processes

Companies have business-facing processes and customer-facing processes.

Business-facing processes are those which make the business run more efficiently such as budgeting and planning whereas customer-facing processes include sales, marketing and customer service.

A CRM strategy focuses primarily on the customer-facing processes and makes them better in terms of meeting the needs of the customer.

The following chart explains a sample what is included in each process:

crm business process improvement

The whole CRM process begins with a lead – the name of someone you think you can sell something to.

Usually, a person has filled out a web form and provided you with their contact information.

Once the lead is put into the system, the software will then take it through to the sales process. It’s the CRM system that will remind the sales person to call at an agreed upon time, for example. Each time you interact with the prospect, you will record it into the CRM system. The same applies if someone else ends up talking to the prospect.

In a nutshell, CRM keeps track of all lead-related actions and what’s been said and done.

At the same time, CRM is a library of documents, phone calls and emails. When an interaction with a prospect is initiated, you get an instant, automated trail of communication. Because the information is in one central place, anyone in the company can help this person out.

Whether you’re in sales, marketing or customer support, a CRM system can help to automate a particular business process, as well as to automate the way each process works together with the other. But, it goes without saying that each business process must be well defined and efficient in order for a company to achieve good results.

Customer-facing process automation

1. Lead management

There’s an entire process before a lead becomes a customer.

You need to identify a lead, then qualify it and only then convert the lead into a sale.

A lead can come from many channels – a website, cold calling, social selling, an event/seminar, or it can be purchased (providing the purchase list is inline with GDPR).

With this number of channels, it must be clear which person or department is ultimately responsible for logging the lead in, because this determines how the lead should be routed and how it will be followed up on. Without a clearly defined process (work flow), leads can end up lost or forgotten, which results in frustration, lost sales productivity and even a bad customer experience.

marketing work flow

2. Customer support

There should be clear rules for how customer service requests are managed.

These rules define whether a request goes to the first or second line of support, what resources will be used to solve a customer’s problem and how status updates will be shared to ensure that the issue is being addressed. Once the work flow and rules are defined, the CRM system can automate the whole flow.

At the same time, it keeps a record of all contacts’ history, so that customer service teams can view the information to get a better understanding of how to help the customer, which can then be used to improve customer satisfaction.

customer work flow

3 Types of CRMs

Not all CRMs serve the same function.

Depending on your business goals, you may only require a specific set of tools for your sales, marketing and customer support departments. 

Here’s a close up of how CRM can support each of these critical roles.

1. CRM for Marketing

Successful marketing campaigns rely on data from potential and existing customers to create smarter strategies and build better business relationships.

Marketing CRMs allow you to collect and store this data in a system while tracking information across many touchpoints in your customer’s journey.  

As potential customers engage with your marketing campaigns through forms, blog posts, and email, you can easily identify buying patterns and behavioral trends. This helps your marketing team to cater more accurately to a potential customer’s needs, personalize their experience, and increase new customer onboarding. 

KEY BENEFITS

  • Reach your target audience more effectively
  • Capture more high-quality customer leads
  • Initiate meaningful conversations with your business

2. CRM for Sales

While a marketing CRM provides the tools to attract, engage, and nurture relationships, a sales CRM focuses on closing deals

As customers move closer to a buying stage, having the right tools helps your team stay on top of sales opportunities without losing track of a deal. 

Sales CRMs are designed to deliver quotes, track performance, and organize activities. It should also provide your sales rep with a centralized hub to manage their time effectively, automate manual tasks, and receive feedback in real time.

Companies that use a sales CRM can predict expected revenues more accurately by analyzing value, estimated close dates, and likelihood of closing a deal throughout their sales pipeline.

KEY BENEFITS

  • Delivers real-time insights on customer and sales activities
  • Creates a database that manages and monitors deals
  • Increase pipeline performance and forecast accuracy

3. CRM for Support

Managing customer relationships requires interactive tools to handle complaints, resolve problems, and follow up effectively.

A CRM for support teams includes a ticketing system to manage all customer inquiries with ease. All customer inquiries, whether by email, social media messaging, or phone calls, are captured and organized centrally in a CRM database.

In order to provide meaningful customer support, having a dedicated CRM helps to better equip your team to deliver a seamless customer experience - such as a knowledge base, live chat support and automated response.

KEY BENEFITS

  •  All-in-one ticketing system to track, communicate, and resolve customer inquiries
  • CRM database to align your support team’s action with automated responses for a seamless experience 
  • Provide 24/7 self-support through a library of faqs (i.e., Knowledge Base)

Depending on your immediate goals and needs, a complete CRM may not be necessary. However, empowering your marketing, sales, and customer support teams with the right tools can enable them to deliver a better experience to your existing and potential customers.

Conclusion

B2B buyers no longer need you to tell them what they need or want anymore.

They already know what they want since they’ve been searching on the internet, through forums, blogs, social media, and so on.

What they want is to be treated as individuals. They want to feel like their business matters to you and that you care.

In B2B sales, a CRM system can make all the difference in whether or not you gain a new customer or retain an existing one. Customers who feel valued are happy customers and happy customers mean repeat business – not to mention, improved bottom lines.

Do you want to learn more about CRM and which solution is right for you?

Then download our free buyers guide (below).

CRM buyers guide 2018

CRM

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Comments

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Kate

2 years ago

Many brands only care about how to buy their services or products. Customer involvement may occupy the last position in their list of marketing strategies. Customers who feel involved will usually buy, promote, and show their loyalty to one product or brand. Businesses that focus on customer relationship management (CRM) focus more on value creation, not income extraction.

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Steven MacDonald

2 years ago

That's an excellent comment, Kate. Well said!

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Donald Vaccaro

2 years ago

Thank you so much! I have read so many things related to CRM, but this is the first article that truly understands the philosophy of it.

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Steven MacDonald

2 years ago

Thanks, Donald!

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Nicole Peterson

one year ago

Why is CRM important to your business? CRM or Customer Relationship Management may be a strategy for managing associate organization's relationships and interactions with customers and potential customers. A CRM system helps many firms to keep connected to customers, contour processes, and improve profits. CRM helps in keeping track of the clientele contact info such as full name, address, email address, mobile, telephone website url and any social media links. It extracts other information like news about the company’s activity, and it also helps in storing details like what is the personal preferences from the communications. The CRM system organizes this info about the people and companies which will help you in understanding the relationship with them over time. Why is CRM vital to your business? A CRM application brings all this information into one cohesive unit. The customer’s complete history together with your business exists adjacent to a list of your deals; your emails, notes, and appointments board within one interface. In fact the on-time notifications the minute your customer performs a task of appropriate value to the business – like when they click on your email with the hyper link highlighting the price tags. Here we are talking about the goldmine of data points of your end customer available under one roof and one system. CRM as a powerful tool is the one-stop answer for your sales group. It will be the distinction between winning a deal and losing it. It may also be your entrance to spike in the sales productivity, hot prospects and better coordination between different groups. However at its core, a CRM application helps you build long lasting relationships together with your customers.

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Sawailal

one year ago

Great content. Thank you so much for sharing the importance of a customer relationship management strategy.

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Bekur Girma

one year ago

Great article! It really helps me to understand what CRM is and the importance of it.

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Patricio Quiroz

one year ago

Loved this article, very useful information about CRM! I am glad more and more companies are shifting into focusing in this area. It is a must have in today's world for successfully tracking and managing your business.

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Daniel

one year ago

Brilliant content, you are making me feel that investing in CRM will certainly benefit our company. I've been testing firmao.net/info and it is very intuitive and easy to use, will see how it goes :)

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Shivam D.

one year ago

I agree with you. CRM Software allows you to close more leads in less time with features like data entry automation, smart analytics and business insights etc. And as your business grows, you need tools that help you scale outreach and sales development.

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Dominic C.

one year ago

Managing customer relationships is very important and CRM helps in several ways: - Link tasks to many CRM features and stay organized, - Powerful support system with ability to auto import support tickets, - Track time spent on tasks and bill your customers, - Ability to assign multiple staff members on task and track time per assigned staff, - Keep track of leads in one place and easily follow their progress, - Ability to auto import leads from email, add notes, create proposals. - Organize your leads in stages and change stages easily with drag and drop, - Create great looking proposals for leads or customers and increase sales.

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Thomas C.

one year ago

Thank you Jennifer, for this great write up on CRM.

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Sakshi

one year ago

Customer relationship management is the most important part of any kind of business.

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PROF YUSUF ABDALLA AWAD

one year ago

Customer Relationship Management (CRM) is the most important tool or strategy that plays a vital role in improving the business smooth going process, that is why many business experts put a lot of emphasis on customer retention and satisfaction. Many thanks for the article.

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Nicholas

10 months ago

So true! CRM really does bring all organizational operations and data under a single roof.

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Andrew Robinson

10 months ago

Great post on CRM. I've read a lot of blogs on the topic, but I love that you mentioned customer centricity. Putting the customer at the heart of your organization is the key to a successful business. Thank you.

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Sushil Bhatt

9 months ago

Some great insights here! Loved the information presented. In today's market, CRM is highly necessary!

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Hasan Ahmed

9 months ago

Great article! CRM enables you to manage your leads and sales opportunities.

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Robert S.

8 months ago

This was a good rundown on CRM and why it's so important. Like you said at the start to this piece, it's important to put the user first, not only in terms of how they're interacted with in person but the online experience they receive. When a website provides them with the information they need in rapid fashion, CRM efforts prove that much more successful.

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Majed B.

8 months ago

Thank you so much! I'm learning so many things related to CRM lately as I begin my project into Customer Relationship management.

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Rita OptSoft

7 months ago

Every business owner should know about CRM (Customer Relationship Management). It is really wonderful tool to organize and run business smoothly.

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Katie H

7 months ago

Hey Jennifer, thanks for this great article explaining the importance of a CRM. The visuals are useful to show how implementing this software affects many of the day to day business processes such as marketing, sales, etc and how it can be brought under one roof. Creating a seamless experience and smooth flow of data at every stage of business all centered around the customer. Thanks again for sharing.

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Prateek Mishra

6 months ago

Here is such a nice explanation about why CRM is important. Thank you for sharing this, Jennifer.

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Khushi

5 months ago

Thank you for sharing your knowledge with us, and in the growing era, it is really necessary to have CRM as a strategy, not only to retain customers but to get the deeper insights of customers and their behavior, analytics everything.

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Ryan Williams

4 months ago

Great post Jennifer! I really appreciate the detailed explanation about CRM and how it can positively impact my business.

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David Witt

4 months ago

This is a really great article on CRM and its benefits. Thank you, Jennifer!

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Nassa H.

3 months ago

Great article. Thanks for sharing this piece on CRM.

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Amrit

3 months ago

Thank you. I got a lot of info about CRM and it's benefits.

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Adam

2 months ago

A CRM is more than a tool. When used correctly, it can transform your business. Thanks for sharing, Jennifer!

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Nick W.

2 months ago

Literally, great content on CRM methodology. Nicely explained!

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Nicholas Creer

one month ago

Hi Jennifer, this information on CRM is very useful to many people. Thank you!

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Prasanth

one month ago

This in-depth and data driven guide to CRM is very helpful. Apart from building a customer-centric strategy. We need to improve the customer communication as well to convince and retain our existing customers.

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SANDEEP UPPALA

18 days ago

Thanks for the post, Jennifer. Very useful introduction to CRM.

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