What does CRM mean? Customer relationship management definition and benefits
Customer relationship management (CRM) is an approach to manage a company's interaction with current and potential customers.
What is CRM? CRM stands for customer relationship management. It’s technology that analyzes and manages customer interactions and data throughout the entire customer lifecycle, thereby building better customer experiences, better customer service, and better business relationships while increasing revenue.
The meaning of CRM becomes more clear when you think of it as modern software akin to a traditional filing system, in which the names of customers and prospects as well as all of their relevant information (phone number, email, deal stage, notes, etc.) are stored.
CRM systems help to improve customer relationships and connections by offering a 360-degree view of the customer with easy access to data like contact info, customer service requests, marketing campaigns, and sales history and opportunities, thereby streamlining businesses processes.
CRM software has become nearly ubiquitous in the business world for growing larger-scale organizations – there’s a few reasons for this. Let’s look at how a customer relationship management system addresses and solves pain points across the entire organization for modern, growing companies.
Examples of CRM in business
Customer relationship management (CRM) is an approach to manage a company’s interaction with current and potential customers.
It uses data analysis about customers’ history with a company to gain critical insights into all facets of the organization and opportunities, including the following examples:
- Improve business relationships with customers
- Focus on customer retention
- Drive sales growth
- Streamline business functions and automated manual processes to free up resources
- Automate marketing, workflow, lead management, sales force, and contact center operations
- Create better products, better experiences, and better customer service
- Access real-time, actionable information across the organization and the supply chain
- Strengthen B2B operations and relationships
- Train employees to build strong customer relationships built on trust and empathy
Top companies use relational systems that allow them to adapt to the way different customers buy and convert prospects into qualified leads through the sales pipeline.
The benefits of CRM aren’t just internal – CRM also improves the overall customer experience, thanks to boosted customer engagement and loyalty.
What is customer experience? CX defined
What is customer experience? Brand messaging and morals, social interactions, sales processes, in-store experiences, and customer service, for starters.
CRM system: Functionalities that drive success
CRM systems can have optimal outcomes for many parts of your business or organization, which include:
- Customer service
- Data and tracking
- Increased personalization
Customer service and CRM
The backbone to any good company is rock solid customer service – from first touch as a prospect through the lifecycle of that customer.
For smaller companies, it may be plausible to use Excel or another system to denote each and every prospect, the notes from the calls, and then the move to a customer. However, over time, detailed updating of spreadsheets and their maintenance can become incredibly time consuming, taking your sales folks and other team members away from their revenue-generating responsibilities.
This is where customer relationship management software comes in handy. It works with other online tools to pull in relevant information automatically, helping to alleviate some of the workload from employees. For instance, CRMs can pull in information around first-touch attribution (from which channel did a prospect first hear about you).
A good customer relationship management software solution makes the updating of customer information incredibly easy and visible company-wide. This is helpful should a prospect or customer need to be handed off to another team member. There’s no need to transfer Excel docs or grab a meeting to discuss the history of the customer; instead, it’s all right there, noted and tracked in the CRM.
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Data and tracking with CRM software
Beyond easy transfer of information and manual tracking of inputted information, a CRM software also tracks much more than a salesperson will be able to do.
What kind of data can you track with a CRM system?
- Customer activity on the website
- Customer engagement with company emails
- Email activity with sales people or others at the company
- Which forms on a website customers have filled out, how often, when, and from which attribution channels
This kind of tracking goes above and beyond traditional customer relationship management, which tracked only customer/prospect contact and deal stage information (or the information a salesperson could enter into a spreadsheet on their own).
With this information, you can now begin to run analysis on generalized data.
Examples of important business questions a CRM can begin to answer:
- Do prospects convert better into customers when they fill out a form on the homepage versus a sales page?
- How long is the average deal lifecycle for someone who signs up for our blog newsletter?
- How many pages on the site do typical prospects look through before filling out a form?
- Which pages on the site covert the most prospects to customers? Is this different based on the first-touch attribution channel?
All of this information better arms a marketing team to put more money where the shortest lead cycles are with the highest prospect to customer ratio.
In addition, this information helps sales folks better understand the prospects journey, altering their pitch and conversation based on what is most relevant to that exact customer, as well as what the aggregate data says about the sales cycle and journey this prospect is on.
Increase personalization using customer relationship management
Tailoring a message or content specifically to the actions of a prospect or customer is now table stakes in organizations around the world – and CRM capabilities helped make that happen.
Your entire team can pull both aggregate data and information on customer journeys, as well as dig down into the specifics of each customer – so your marketing, sales, and customer service teams can tailor specific messages, conversations, and content to those customers or prospects.
This helps to better engage with those customers and prospects, build rapport, earn trust, and ultimately increase their affinity for the company.
CRM covers how the customer relationship is managed across all divisions of your business, including marketing, sales, service, and digital platforms like e-commerce.
CRM solutions allow you to automate customer interactions, including personalization, social, analytics, and collaborations across your enterprise.
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All hail technology: CRM automation is beneficial
The benefits of CRM are many:
- Modern CRM allows businesses and organizations to experience higher levels of customer engagement, loyalty, and revenue while lowering costs
- Next-gen CRM can help increase sales and revenue, lead generation, forecasting
- CRM software solutions allow you to run real-time analytics to quickly seize new opportunities
- Collaborative CRM allows companies to share information across teams, departments, and internal and external stakeholders
Different types of CRM software
Now that you know the main benefits, CRM meaning, and uses of a CRM system, it’s important to know the types that are available.
The three traditional types of CRM software:
- Operational CRM uses sales and marketing automation to give you a complete view of each customer’s journey.
- Analytical CRM analyzes your customer data and identifies patterns to help you make better business decisions.
- Collaborative CRM organizes and shares customer information with your internal and external stakeholders.
Keep in mind, many CRM software solutions combine all three of these types – making for a fourth type that you might call an integrated CRM.
Modern solutions for customer engagement
Modern CRM solutions offer much more than their traditional counterparts. Just like business has evolved, so has the CRM meaning.
When your customer relationship management is in the cloud, you can harness more functionality, in-memory technology, a 360-degree view of the customer, and data and analytical insights to create contextual, personalized, omnichannel customer engagement in real time – across any channel or line of business.
CRM for Sales: Gain the customer insights you need to close deals anytime, anywhere. At the heart of the sales cloud CRM is the customer and their history with your company, across both the front-office and the back-office.
CRM for Marketing: Provide contextual, individualized customer experiences across every channel with every interaction. Gain deeper insights with machine learning to identify the best audiences and experiences for individual customers, while making each customer feel like your only customer.
CRM for Commerce: Give customers a personalized digital shopping experience with solutions for mobile, social, and e-commerce.
CRM for Service: Your customer service reps need customer visibility and real-time problem-solving tools to win loyalty and cut costs – give it to them.
