What is CRM — and How Could Your Business Benefit?

In its simplest form, CRM consists of tools that make it easy for you to organize and manage the information your company has gathered and stored about your customers and prospects. This includes not only things like their names, addresses (physical and email), phone numbers, websites and social media profiles, but also all of your relationships and interactions with them.

Not Just Software, but a System

When used in this context, CRM usually refers to a system of technology tools instead of just one piece of software. Each component of the system is designed to help businesses stay better connected to customers and prospects, improve customer service, promptly follow up on leads and close more sales.

The field of CRM software has grown significantly in recent years and will likely continue to grow. For example, CRM is projected to be the largest area of enterprise software spending by 2021, according to Gartner. Businesses that don’t maximize the benefits of CRM in order to improve customer service and responsiveness and boost sales are at risk of falling behind competitors that are utilizing CRM to its full extent.

With the right CRM system, every stakeholder in your company — from sales and customer service to business development and marketing personnel — has quick and easy access to critical information about customers and prospects. It enables you to view all the information stored in your database on a customizable dashboard in one central location, which makes it faster and easier to accomplish a number of tasks, including:

• Access critical contact information
• Identify and follow up on sales opportunities
• Catalog and resolve customer service issues
• Access purchase history to identify buying patterns
• Understand and manage the sales pipeline
• Improve sales forecasting
• Manage sales and marketing campaigns.

You can even capture information from customers’ and prospects’ public social media activity and store that information in your CRM system. This includes their likes and dislikes, shares, and comments they’re making about your business and your competitors.

Tangible CRM Results

Some business owners think that CRM systems are only useful or cost-efficient for large corporations, but this usually isn’t the case. Practically any size company can reap benefits by implementing the right CRM system. Research conducted by Salesforce indicates that implementing a CRM system can lead to tangible, bottom-line results, such as the following:

• Up to a 25 percent increase in revenue
• Up to a 30 percent increase in lead conversion and sales
• Up to a 35 percent increase in sales productivity and customer satisfaction
• Up to a 38 percent increase in the speed of decision making.

On the flip side, not using a CRM system can end up costing your business money. This is especially true when you consider the opportunity cost of lost or mismanaged sales leads. Most salespeople and sales departments generate vast amounts of customer and prospect data. However, if this data isn’t quickly captured and stored in an easily accessible CRM system, it could get lost in a sea of handwritten notes, casual conversations or files stored on disparate computers.

When this happens, critical details can slip through the cracks and follow-up steps may fall by the wayside. And data may disappear forever when salespeople leave your company — or even worse, salespeople may use it to sell against you if they jump ship to a competitor.

Going Beyond Sales Management

CRM is usually thought of within the context of improving sales management and making the sales process more efficient. But CRM is increasingly being used today to boost efficiency in the customer service arena.

Customers today often contact businesses via a wide range of different communication vehicles such as telephone, email, social media and chat. If a common CRM platform isn’t used to manage all of these different customer interactions, important details can be missed. This, in turn, can lead to slow and unsatisfactory responses along with disgruntled — and perhaps soon-to-be former — customers.

Many CRM systems today can also pull in publicly available information about customers and prospects, such as recent news items and alerts, to better equip salespeople for their next conversations or interactions. They can also connect to other business apps and integrate with popular business tools like electronic document signatures, accounting and billing software, and customer surveys.

In addition, the latest CRM systems use built-in intelligence to automate many manual tasks like data entry and lead routing. This frees up staff to spend more time on value-added tasks that can help contribute to your bottom line.

Concrete Benefits of CRM Systems

Here are four concrete ways that your business could benefit from a CRM system:

1. More efficient identification and categorization of leads. A CRM system will efficiently identify and accurately categorize leads for your salespeople and your marketing team. This will enable them to prioritize leads and spend their time working with prospects that are most likely to turn into customers.
2. Increased cross-selling and upselling opportunities. When you have greater insights into your current customers — such as their purchase history, buying patterns, behaviors, likes and dislikes — you’re in a better position to offer additional products and services they might be interested in buying from you.
3. Better customer service and support. Many customers today expect fast, highly personalized, around-the-clock service and support from the companies they do business with. If they don’t receive it, there’s a good chance they’ll switch to a competitor than can deliver.
4. Improved products and services. By analyzing the data captured and stored in your CRM system, you can gain insights into what your customers are saying about your products and services. This can help you spot and head off possible problems early and make improvements to your offerings.

CRM Benefits Outweigh Costs

If you haven’t implemented a CRM system at your business, you should plan to meet with your sales, marketing and service teams to discuss how you could benefit from CRM. For many businesses today, the costs of purchasing and implementing a CRM system are far outweighed by the long-term benefits such a system offers.