What is CRM?

CRM

Question: What does CRM stand for?

CRM stands for Customer Relationship Management. It is a strategy for managing business relationships and interactions with customers and potential customers. It is also designed to help improve profitability.

Companies create vast quantities of data every day. Each time someone picks up the phone and talks to a customer, goes out to meet a new sales prospect, or follows up a promising lead, they learn something new and potentially valuable.

Customer relationship management (CRM) takes customer data and turns it into a useful insight to help a business.

So what is a CRM system?

Fundamentally, a CRM system allows businesses to manage the relationships they have with their customers to help business growth.

In fact CRM goes far beyond customers, allowing businesses to focus on relationships with all sorts of people – colleagues, suppliers and service users as well as customers.

At the most basic level, a CRM system provides a central place where customer and prospect contact information can be stored and shared with colleagues. Click on the images below to discover some of the basic functions of a CRM system.

File and content sharing

Instant messaging between employees

Sales forecasting

Email integration with Outlook and Gmail

Dashboard-based analytics

But modern CRM platforms, such as Salesforce, go much further, integrating with marketing automation and customer service systems to provide a complete, cloud-based system for customer data. There will be more on cloud-based systems later on.

Why CRM Matters

Why does it matter?

A CRM system helps businesses to grow because it tracks the history of customer interactions. To run smoothly, a business needs customer relationship data that’s automatically updated, with instant access for employees, and provides a full history of all communications, meetings, and documents shared.

With a CRM system, there is one place to store every customer, every lead, every service request, all of their contact info, preferences, and history so your conversations are always personal, relevant, and up-to-date. All available on mobile, desktop and through powerful reports and dashboards.

By understanding customers better, cross-selling and up-selling opportunities become clear – providing the chance to win new business from existing customers.

CRM helps businesses to better understand the pipeline of prospective sales making forecasting simpler and more accurate. There is clear visibility of the path from enquiry to sale, available wherever and whenever it is needed.

Life without CRM

Question: Companies don't really need CRM systems?

The truth is that companies do need CRM systems.

An active sales team generates a flood of data. They can be out on the road talking to customers, meeting prospects and finding out valuable information – but all this information gets stored in handwritten notes, laptops, or inside the heads of salespeople.

Details can get lost, meetings are not followed up promptly and prioritising customers can be a matter of guesswork rather than an exercise based on fact. Worse still it can all be compounded if a key salesperson moves on. As Bill Gates, CEO of Microsoft, said “How you gather, manage, and use information will determine whether you win or lose”.

On top of this customers may be contacting businesses on a range of different platforms – phone, email and social media. Asking questions, following up on orders or complaining. Without a common platform for customer interactions, communications can be missed or lost in the flood of information – leading to an unsatisfactory response.

Even if this data is successfully collected, businesses face the challenge of making sense of it. It can be difficult to extract intelligence. Reports can be hard to create and waste valuable selling time. Managers can lose sight of what their team are up to in reality, which means that they can't offer the right support at the right time – while a lack of oversight can also result in a lack of accountability from the team.

How CRM helps

Reduced costs

Marketing and sales costs average 15% to 35% of total corporate costs. According to Harvard Business Review sales increases arising from advanced marketing and sales information technology have ranged from 10% to more than 30%, and investment returns have often exceeded 100%.

Introducing a CRM platform has been shown to produce real results – including direct improvements to the bottom line.

Sales
Sales Productivity
Forecast Accuracy

Source: Salesforce.com Customer Relationship Survey conducted March 2014 - May 2014, by an independent third-party, Confirmit Inc., on 4,100+ customers randomly selected. Response sizes per question vary.

Click on the icons below to discover how CRM can further help businesses.

Identify and categorise leads

A CRM system can help to identify and add new leads easily and quickly and categorise them accurately. This means that customised pitch documents can be created in less time, cutting down on response time and enabling sales teams to move on to the next opportunity.

With complete, accurate, centrally held information about clients and prospects, sales staff can focus their attention and energy on the right clients.

Increase referrals from existing customers

By understanding customers better, cross-selling and up-selling opportunities become clear – providing the chance to win new business from existing customers.

With better information businesses will be able to keep customers happy with better service. Happy customers are likely to become repeat customers, and repeat customers spend more – up to 33% more according to some studies.

Improve products and services

A good CRM system will gather information from a huge variety of sources across a business and beyond. This gives unprecedented insights into how customers feel and what they are saying about an organisation – this enables businesses to improve what they offer, spot problems early and identify gaps.

Watch the video below to see how the Financial Times have used CRM to improve their products and service.

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