In this definition...
What is CRM?
Customer relationship management (CRM) describes all aspects of sales, marketing, and service-related interactions that a company has with its customers or potential customers. Both business-to-consumer (B2C) and business-to-business (B2B) companies often use CRM software to track and manage communications through the web, email, telephone, mobile apps, chat, social media, and corporate marketing materials.
What are the benefits of CRM?
Before CRM systems became commonplace in the 1990s and 2000s, customer data was spread out over office productivity suite documents, email systems, mobile phone data, and even paper notecards and Rolodex entries. Today’s systems consolidate this data and store it in a single location that can be easily accessed, updated, and organized according to business needs. Similarly, the automation capabilities create a more impactful, streamlined customer and prospect experience while also saving time and money.
A typical customer relationship management strategy helps businesses with the following objectives:
- Removing silos between sales, marketing, and customer service
- Obtaining a 360-degree view of customers and prospects
- Retaining customers through better service and loyalty programs
- Attracting new customers and receiving new business
- Evaluating the efficacy of existing campaigns/initiatives
- Increasing profitably
- Decreasing customer management costs
The data captured by CRM solutions helps companies target the right prospects with the right products, offer better customer service, cross-sell and up-sell more effectively, close deals, retain current customers, and maintain an accurate picture of who their customers are and what they want.
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Components of CRM software
A successful CRM software accomplishes the objectives above by connecting multiple subsystems from marketing, sales, and customer service and providing broad-reaching functionalities. These include:
- Lead management: A list of prospective customers, relevant demographic information, and interaction details, plus tools to collect this information.
- Pipeline management: A visual depiction of all potential sales/contracts in relation to how close they are to being actualized. Users can manipulate the location of a customer/prospect within the pipeline as they advance from one stage to another.
- Campaign management: A record of all marketing activities, including email, social media, and advertising.
- Documentation management: Stores all relevant RFPs, contracts, invoices, form submissions, support interactions, etc. between a customer and the various departments with which they have contact.
- Analytics: Measures the effectiveness of current processes and are used to craft insightful reports. Strong analytics are most helpful for advising the best course of action for a particular customer or contact.
- Automation: Uses various triggers to perform specific tasks without manual human intervention. Examples of CRM automation include drip email campaigns, customer service chatbots, and lead assignments.
- Integration: Determines which third-party applications can be connected to a CRM system to collect additional data and/or perform more niche operations than are inherently supported.
Types of CRM software
There are many types of CRM software that are specifically tailored to a specific industry or business need including:
- Financial services CRM
- Nonprofit CRM
- Call center CRM
- Cloud CRM
- Open source CRM
- Social CRM
- Inbound CRM
- Small business CRM
Examples of CRM software
Many of today’s most popular CRM solutions are delivered as cloud-based solutions. Because they have Web-based interfaces, these tools allow sales teams to access customer and lead information from any device in any location at any time of day. Software-as-a-Service (SaaS) solutions tend to be more user-friendly than legacy CRM applications, and some include artificial intelligence or machine learning features that can help organizations make better business decisions and provide enhanced support and service to their customers.
Prominent CRM software vendors include:
Read more: Best CRM Software and Tools