Customer Relationship Management [System] (CRM)

What is customer relationship management system (CRM)?

CRM could refer to a number of things, namely processes, software, and strategies that businesses use to facilitate communications with customers and clients. A better understanding of the CRM meaning will enable you to realize the advantages of CRM across all industries.

Businesses often rely on a customer relationship management system to keep track of all communications with new and existing customers. A reliable CRM can streamline all communications and give business leaders and others the ability to build relationships with prospects and customers alike. In the process, you can eliminate many sources of inefficiency, such as spreadsheets, multiple apps, and databases. 

The following guide to CRMs will review what they are, how they work, and the reasons why you should use them for your business.

Customer relationship management definition

Customer relationship management, or CRM for short, uses a combination of business software, processes, and strategies to connect with, acquire, and retain all types of customers. 

Often, businesses rely on effective CRM software that automates communications via automated workflows. Incorporating good CRM strategies into this software can then ensure that you benefit from efficient and consistent communication with leads and customers throughout the buyer's journey.

With the help of the right solutions, you can acquire and nurture more leads, increase conversions, boost sales, and maximize customer retention. In doing so, you can collect relevant data and glean actionable insights that guide marketing and sales efforts. You can also gather data from multiple sources at various touch points along the customer journey. 

In short, CRM systems can give you complete control over communications to get the most from them.

A short history of customer relationship management (CRM)

Many people mistakenly believe that customer relationship management began toward the end of the 20th century with technological advancements during this period. However, the actual practice of CRM has been in place since the birth of businesses and customer relations.

In fact, you can trace the concept of CRM as far back as 20,000 years ago, when what is now known as Papua New Guinea saw the trade of obsidian knives. At the time, obsidian was a highly valuable material that forged reliable, durable knives and other tools that made it popular across the sea. CRM was one of the reasons why obsidian knives and other utensils had such a wide reach all over the globe.

CRM has always been important, and it continues to be so in today's business environment. The biggest understanding involved in CRM is that it's better to work toward retaining customers than to focus solely on acquiring new ones. If you can encourage repeat sales from your most valuable customers, you can benefit from a steady revenue stream and substantially increase your bottom line.

Today's developments in CRM technology have made it easier than ever for businesses to manage every aspect of customer relationships. The right tool will give you complete transparency into the customer journey. Based on the critical data you collect and manage, you can then take steps to further streamline communications.

How a CRM platform works with examples

A good CRM platform will make it easy to keep track of all communications at every touchpoint. Not only will it collect valuable information about communications, but it will also help you make full use of it. 

A CRM solution will enable you to personalize messaging to speak to each customer segment, with the right timing. It will also help shorten sales cycles, focus your sales efforts toward the most valuable prospects, and measure the results of your campaigns. 

Some customer relationship management examples of templates you can use include the following:

Lead acquisition emails

CRM platforms can help you send personalized lead acquisition emails to your audiences. For example, you might send an email with the following template to new leads who enter the sales funnel:

Hello [Name],

We appreciate you reaching out to us for more information about [topic]. If you want to find out more about how our solution can help people like you in [industry], reach out to us at [link] to get started on implementation today.

[Signature]

You can also use a CRM to collect initial contact information to bring people into the buyer's journey. For example, you might want to offer free content in exchange for entering basic contact details. In these instances, you could lead people to a landing page that discusses the free content. On that page would be a contact form that asks for key info such as the lead's name, email, phone number, and company name. This would go into the CRM and your contact lists, and you would know what these prospects are interested in based on the specific form they completed.

These are just a couple of the many ways you can use CRMs to optimize customer communications. 

What are the benefits of CRM?

CRM offers a range of benefits for businesses across all departments. The right practices and solutions will benefit you in some of the following specific ways:

• Increased knowledge of customers — A reliable CRM solution will store all necessary information about your customers on a single, centralized platform. You can then use this information to gain a deeper understanding of your audience.
• Improved segmentation — CRM will also help you segment your customers into different groups that respond to different types of communications. For example, you might have one type of customer that's interested in different features of your offering than what another might want. You can then cater your messaging to each based on their interests.
• Optimized customer retention — In addition to acquiring new leads and converting them into customers, you can use CRM to maximize retention among existing customers. You'll know how and when to communicate to your current customers to drive repeat sales and increase loyalty.

What are the benefits of CRM for marketing and sales teams?

CRMs come with many general advantages for businesses, but they can benefit your marketing and sales teams in even more specific ways. The following are some of the key benefits for both marketing and sales teams:

• Accelerated leads to revenue cycles — If your CRM solution includes marketing capabilities, you can use it to optimize your marketing campaigns to connect with leads and accelerate conversion rates.
• Increased personalization — Marketers can also personalize communications to speak more directly to audiences. You'll also be able to develop communications for any of the channels you use, from email communications to social media.
• Automated sales processes — Sales teams can also benefit from CRMs through increased automation of sales workflows, enabling sales teams to acquire more leads and close more deals.
• Improved sales management — CRMs also allow sales teams to manage several sales channels at once using one reliable platform. Through the use of artificial intelligence and machine learning, you can make the most of the data you collect to hyper-target and streamline sales efforts.

Types of CRMs

There are three main types of CRM systems you can use for your operations. These include the following:

Collaborative CRMs

Collaborative CRM systems help connect all departments within an organization with a centralized platform. Your sales, marketing, and customer service departments will all benefit from a collaborative solution that helps ease customer communications at every level. All data on these systems is also consistent and updated, which ensures that your teams always have access to the information they need.

Operational CRMs

These CRMs optimize customer relationships through streamlined processes. You can gain complete transparency into the customer journey from initial interactions to repeat purchases. They specifically work by helping automate many mundane tasks to free up more time among your sales, marketing, and customer service teams.

Analytical CRMs

Using analytical CRMs, you can analyze customer data to gather actionable insights that help you continually optimize the customer experience. These platforms would help collect large quantities of data and contextualize it, enabling you to get the most from it. You can also use these tools to identify certain trends among your audiences that can inform your campaigns.

Use a Reliable CRM to Improve Customer Communications

With the right CRM solutions and practices, businesses of all types can improve customer communications at every stage of the customer journey. 

To learn more about how Storyly can help you connect with customers and complement other CRM efforts, explore Storyly and its capabilities today.