CRM – What is Customer relationship Management

By March 27, 2020 Blog, CRM

Without customers, let us put it bluntly, you have no business. You need to cultivate a solid relationship with your customers and that is where Customer relationship management (CRM) comes in.

What is CRM?

We are going to borrow Wiki’s words and define Customer relationship management (CRM) is an approach to manage a company’s interaction with current and potential customers using data analysis about customers’ history with a company to improve business relationships with customers, specifically focusing on customer retention and ultimately driving sales growth. A CRM system helps companies stay connected to customers, streamline processes, and improve profitability.

For very many businesses, their most valuable and important asset is their customers. In the early days at a lot of companies, the details about those customers — who they are, how they’ve interacted with your organization — are spread out in many different places. The CEO’s brain, a sales rep’s inbox, the accountant’s stack of invoices.

As a business grows, it quickly becomes necessary to have one central place where all of this information lives. And that is where a CRM system comes in. A CRM system can give you a clear overview of your customers. You can see everything in one place — a simple, customizable dashboard that can tell you a customer’s previous history with you, the status of their orders, any outstanding customer service issues, and more. It is a central place to organize all the details of your leads and customers, it’s easy for everyone on your team to gain insight into the state of your business, and the status of every customer relationship.

Perfect scenario: Today’s customer might raise an issue in one channel — say, Twitter — and then switch to email or telephone to resolve it in private. A CRM platform lets you manage the inquiry across channels without losing track, and gives service in a single view of the customer.

Read More: How to grow your business with CRM

Components of CRM

At the most basic level, CRM bundles together customer information and documents into a single database so business users can more easily access and manage it.

Over time, many additional functions have been added to CRM systems to make them more useful. Some of these functions include recording various customer interactions over email, phone, social media or other channels; depending on system capabilities, automating various workflow automation processes, such as tasks, calendars and alerts; and giving managers the ability to track performance and productivity based on information logged within the system.

  • Marketing automation: CRM tools with marketing automation capabilities can automate repetitive tasks to enhance marketing efforts at different points in the lifecycle. For example, as sales prospects come into the system, it might automatically send the prospects marketing materials, typically via email or social media, with the goal of turning a sales lead into a full-fledged customer.
  • Salesforce automation: These tools help track customer interactions and automate certain functions intended to attract new customers.
  • Contact center automation: This might include pre-recorded audios that assist in customer problem-solving and information dissemination, cutting away the time taken by call center attendants to take care of easy customer queries and tasks. It saves time.
  • Geolocation technology, or location-based services: Some CRM systems include technology that can create geographic marketing campaigns based on customers’ physical locations, sometimes integrating with popular location-based GPS apps. Geolocation technology can also be used as a networking or contact management tool in order to find sales prospects based on a location.

  • Workflow automation: CRM systems help businesses optimize processes by streamlining mundane workloads, enabling employees to focus on creative and more high-level tasks. It ideally takes them from time-wasting activities and helps them devote their energy to where it is more productive.
  • Lead management: Sales leads can be tracked through CRM, enabling sales teams to input, track and analyze data for leads in one place.
  • Human resource management (HRM): CRM systems help track employee information, such as contact information, performance reviews, and benefits within a company. This enables the human resource department to more effectively manage the internal workforce.
  • Analytics: Analytics in CRM help create better customer satisfaction rates by analyzing user data and helping create targeted marketing campaigns.
  • AI: Artificial intelligence (AI) technologies, such as Salesforce Einstein, have been built into CRM platforms to automate repetitive tasks, identify customer buying patterns to predict future customer behaviors and more.

Types of CRM technology

The four main vendors of CRM systems are SalesforceMicrosoftSAP, and Oracle. Other providers are popular among small to mid-market businesses, but these four tend to be the choice for large corporations. The types of CRM technology offered are as follows:

  • On-premises CRM: This system puts the onus of administration, control, security and maintenance of the database and information on the company using the CRM software. With this approach, the company purchases license upfront instead of buying yearly subscriptions from a cloud CRM provider. The software resides on the company’s own servers and the user assumes the cost of any upgrades. It also usually requires a prolonged installation process to fully integrate a company’s data. Companies with complex CRM needs might benefit from an on-premises deployment.
  • Cloud-based CRM: With cloud-based CRM, also known as SaaS (software as a service) or on-demand CRM, data is stored on an external, remote network that employees can access anytime, anywhere there is an internet connection, sometimes with a third-party service provider overseeing installation and maintenance. The cloud’s quick, relatively easy deployment capabilities appeal to companies with limited technological expertise or resources. Companies might consider cloud CRM as a more cost-effective option. Vendors such as Salesforce charge by the user on a subscription basis and offer the option of monthly or yearly payments.Data security is a primary concern for companies using cloud-based systems, as the company doesn’t physically control the storage and maintenance of its data. If the cloud provider goes out of business or is acquired by another company, an enterprise’s data can be compromised or lost. Compatibility issues can also arise when data is initially migrated from a company’s internal system to the cloud.Finally, the cost may be a concern, since paying subscription fees for software can be more costly over time than on-premises models.
  • Open source CRM: Anopen-source CRM system make source code available to the public, enabling companies to make alterations at no cost to the company employing the system. Open source CRM systems also enable the addition and customization of data links on social media channels, assisting companies looking to improve social CRM practices. Open Source CRM platforms such as OroCRM, SuiteCRM, and SugarCRM offer alternatives to the proprietary platforms from Salesforce, Microsoft and other vendors.Adoption of any of these CRM deployment methods depends on a company’s business needs, resources and goals, as each has different costs associated with it.

CRM examples in practice

  • Contact center: Traditionally, data intake practices for CRM systems have been the responsibility of sales and marketing departments, as well as contact center agents. Sales and marketing teams procure leads and update the system with information throughout the customer lifecycle, and contact centers gather data and revise customer history records through service calls and technical support interactions.
  • Social CRM: Social media in CRM involves businesses engaging customers directly through social media platforms, such as Facebook, Twitter and LinkedIn. Social media presents an open forum for customers to share experiences with a brand, whether they are airing grievances or promoting products.To add value to customer interactions on social media, businesses use various social CRM tools that monitor social media conversations, from specific mentions of a brand to the frequency of keywords used, to determine their target audience and which platforms they use. Other tools are designed to analyze social media feedback and address customer queries and issues.

  • Companies are interested in capturing customer sentiments, such as the likelihood they will recommend products and their overall customer satisfaction, to develop marketing and service strategies. Companies try to integrate social CRM data with other customer data obtained from sales or marketing departments to get a single view of the customer.Another way in which social CRM adds value for companies and customers is through customer communities, where customers post reviews of products and can engage with other customers to troubleshoot issues or research products in real time. Customer communities can provide low-level customer service for certain kinds of problems and reduce the number of contact center calls. Customer communities can also provide new product ideas or feedback that companies can use in lieu of feedback groups.
  • Mobile CRM: Applications built for smartphones and tablets have become a must-have for sales representatives and marketing professionals who want to access customer information and perform tasks when they are not physically in their offices. Mobile CRM apps take advantage of features that are unique to mobile devices, such as GPS and voice recognition capabilities, to give sales and marketing employees access to customer information from anywhere.
  • Business-to-business (B2B) practices: A CRM system in a B2B environment helps monitor sales as they move through the sales funnel, enabling a business to address any issues that might come up during the process. CRM systems in the B2B market help create more visibility into leads and, therefore, increase efficiency throughout the sales process.

CRM challenges

For all of the advancements in CRM technology, without proper management, a system can become little more than a glorified database in which customer information is stored. Data sets need to be connected, distributed and organized so that users can easily access the information they need.

Companies may struggle to achieve a single view of the customer if their data sets are not connected and organized in a single dashboard or interface. Challenges also arise when systems contain duplicate customer data or outdated information. These problems can lead to a decline in customer experience due to long wait times during phone calls, improper handling of technical support cases and other issues.

Conclusion

CRM systems work best when companies spend time cleaning up their existing customer data to eliminate duplicate and incomplete records before they supplement CRM data with external sources of information.

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