CRM stands for Customer Relationship Management. It is a technology that manages all your company’s interactions and relationships with clients. Essentially, it is a database, but it does a little more than just that. A CRM system updates in real time based on real customer interactions.
WHAT DOES A CRM SYSTEM ACTUALLY DO?
A CRM system replaces the wide array of spreadsheets, databases and apps that many companies use to track client data. Instead of having different snippets of data stored in various bits of software, it is all kept in one place. Whilst it is possible to host a CRM system on your business servers, they are usually cloud based. This means your entire team will be able to seamlessly access details such as contact information, documents, quotes, purchases and tasks for clients. Streamlining this process optimises organisation, time management and efficiency, which ultimately leads to more sales, improved customer service and increased profitability.
We’ve discussed the importance of data before, and whilst it may not be the most riveting subject for many, it is crucial to remember: your data can make or break your business. Whether you are an independent trader or a large multinational, data management is essential for your business. This is partly why CRM is one of the world’s fastest-growing industries, expected to grow at a rate of 14% between 2021 and 2027; it is a near-vital tool for so many.
The pros
CRM systems have a whole host of benefits for many businesses, but the main aim is to help you better manage your relationship with your customers. They do this in a variety of ways:
1. Centralising customer data:
This is probably the major benefit of a CRM system; having all of your customers’ data in one place, accessible by every member of your business. Whether your staff all work in one building or are spread across the world working remotely, this ensures the whole organisation is able to work seamlessly to offer your customer the best possible experience. This also increases productivity and efficiency, and streamlines internal communications as everyone is on the same page. Not only does this make working processes easier, but it improves customer service, therefore increasing customer retention and sales.
2. Scalability:
As a company – and its list of clients – grows, it becomes more difficult to meet customer needs in a personal manner because each interaction takes a specific amount of time and there is, after all, only so much time in a day. A CRM system grows with your company, ensuring that your customer’s needs are met effectively.
3. Lead scoring:
The best CRM software can show how hot or cold a lead is based on the rules you set. Points are then added to a lead record for important actions taken. This means that your sales team can identify which leads are most effective and can focus on them, which would be almost impossible without a CRM system.
4. Automation:
Some CRMs utilise automated data entry, saving your team valuable time but they also boost efficiency by automating other tasks: for example, you can create and save email templates, automatically log calls and emails, send personalised emails based on location, schedule meetings automatically, automate detailed sales reports and prioritise leads.
5. Analytics:
A CRM system helps you to delve deeper into all of your data and metrics, including those from other sources such as Google Analytics and social media. It can track complex and dynamic data such as what emails a customer has opened, their last purchase, where they have clicked on the website and what ad sent them there in the first place. This can help you identify where your best opportunities are, how well you’re interacting with leads and customers, trends in your sales and more.
6. Dynamic data:
The information contained within a CRM system is constantly updating as your customers take more actions. The importance of this is clear. Bear in mind that for the majority of businesses, decision making is based on data. Whether this data is accurate and up-to-date will have a massive impact on the success or failure of a decision, and by extension, a business.
The cons
Along with the many benefits of CRM systems, there are inevitably some cons too and it is only fair to discuss them too:
1. Cost:
There are dozens upon dozens of CRM options available on the market and many pricing plans to go along with them. When deciding whether a CRM is right for your business, it is important that you carefully consider the total cost of ownership. We are not just talking about the software purchase cost and subscription fees, but the hidden costs such as the cost of staff training, possible hardware upgrades, required IT resources or upgrading to premium features. Some CRM systems also charge per user fees or charge for additional data (eg. for each set of 1000 or 10,000 people in your database).
2. Security concerns:
Having a large amount of data in one place creates obvious risk and should you be subject to a security breach, you would be held responsible and be forced to pay a considerable fine. Ensuring you have two factor authentication enabled for your CRM system (and anything else for that matter) will best protect you from this issue. There should also be systems in place to backup the data.
3. Setup and implementation:
Depending on the CRM system you choose, you may have to input all your customer data manually. This is obviously very time-intensive and subject to human error. If your CRM system is not set up correctly from the very start, this can cause problems with usability later down the line. Implementation of the system once installed and staff training can also be difficult.
In summary
We believe that a CRM system is a hugely valuable tool in maintaining customer relationships and increasing revenue – but it is important to remember they aren’t suitable for every business. However, if you’re thinking of investing in a CRM system for your business, why not take a look at the different types? Here at TDS we have a wealth of experience in managing and using CRM systems so if you’d like to discuss which options are best for you and your business, get in touch.