Four reasons why your business needs a CRM
Business visionary Peter Drucker once said, “The purpose of business is to create and keep a customer.” That seems fairly simple, but as we know, doing so is a whole science in and of itself. To help with this, customer relationship management (CRM) software was created to provide users with a platform to store and organize customer information. They house and intuitively display data acquired on existing customers, leads, potential markets, and touch point details in order to help automate processes and produce actionable insights.
CRMs represent the largest software market in the world, which is expected to reach more than $80 billion in revenue by 2025, and for good reason. CRMs can increase the efficiency of correspondence and provide salespeople with the data they need. They can also help realize trends or relationships that assist in the pursuit of augmenting customer experience and conversion. The following discussion elaborates on the importance of a CRM through four reasons as to why your business needs one.
1. Intelligently store information
If your business needs to effectively store and actionably use information on potential and existing customers, you should consider a CRM. Your CRM can store demographic or behavioral information, touchpoint data and annotations throughout each customer’s lifetime to educate lead sourcing, qualification, and account management. A CRM can also serve as a direct interface between businesses and their customers.
Any form of contact conducted through the CRM registers an entry of data connected to the customer or prospect that describes the interaction and can be further added to by employees. This central store of prospect and client information provides businesses with a means to keep everyone on the same page regarding customer or market characteristics, interactions, and important numbers or metrics. This is all in the pursuit of strategically driving conversion, customer retention and, ultimately, revenue and profitability.
To this end, it is beneficial to use a CRM to connect entries with demographic or preference information as well as other attainable pieces of data viewed as drivers of success. Utilizing this CRM data in statistical modeling can yield insights on customer segments and help to improve sourcing. It may also inform on how to better craft the customer experience and show the evidence (or lack thereof) for value in customer acquisition techniques such as strategic personalization.
Cloud-based CRM may take further advantage of this data through more seamless integration with AI or machine learning. The cloud-based share of all CRMs grew from 12 percent in 2008 to 87 percent in 2017. The analytical technologies they enable operate with a goal of deriving association between data points and desirable outcomes in an attempt to find factors that may predict successful conversions or positive customer experiences. Using a CRM to store data and feed it to such algorithms, as well as to your own analysis, will help you to come up with insights that inform your customer acquisition and maintenance strategies.
2. Visualize data
As you gather data and insights, a CRM will allow your business to organize the information into more digestible and shareable formats. CRMs serve as a platform to create, update, iterate and export reports. Whether it be a table displaying a segment of customers, a graph or a chart, CRMs not only house the underlying data, but also offer tools and integrations to create and customize visual devices based on it.
CRM platforms centralize customer and prospect information, oftentimes in the cloud, granting all organization members with access the ability to generate reports rooted from the same bank of information. This helps to ensure data integrity and accuracy while marketing, sales or operation departments create data-driven campaigns using insights derived from the information organized and reported in the CRM. In addition to serving as the platform to structure and organize data and then display it in reports, CRMs also serve as the means to share such depictions with internal or external stakeholders. Team members can access shared dashboards just as they access the shared data repositories. These visualizations may then be adjusted as needed, exported, digitally saved or printed in order to send or showcase to potential investors or partners.
At one point, spreadsheets alone were enough to manage your customer information. As your business grows larger, though, they become increasingly cumbersome and less accommodative than CRM software that’s dedicated to that purpose. CRM technology will allow you to transition from disparate spreadsheets in favor of a more centralized and organized workflow that comes with the many aforementioned benefits. But what if your business continues to grow? The right CRM will grow with it.
Cloud-based CRMs offer the ability to scale their capacities to the current needs of your organization. Product features, the amount of data storage, and the number of users may be adjusted over time to ensure you get and pay for what you need. The scaling flexibility and pay-as-you-go cost structure of cloud CRMs position them as solid options for small businesses. If your business grows sufficiently large, there are always ERPs with which to integrate your CRM down the line.
4. Insight into purchasing dynamics
With the ability to report metrics and visualize information, CRMs help provide your business additional visibility into the specifics of a customer’s journey. CEO Mark Hurd tells us, “Today’s consumers have the ability to review, compare prices and purchase nearly any product at any time. This shift in the balance of power makes it more important than ever for companies to focus on customer experience.” A CRM will help your company do just that.
Employees who are somewhat removed from customer interaction at certain parts of the funnel will be given fresh eyes for data that can inform their decisions, whether they be for marketing, sales or product initiatives that impact the overall customer experience. CRMs also offer the chance to monitor the successes or shortcomings of your customer service. These instances can be directly viewed on the interface as well as further analyzed using surrounding data to find predictors of desirable outcomes.
Such insights on the customer experience may help gauge the effectiveness of customer relation practices or customers’ satisfaction with the product. The creation of insights facilitated by a CRM also offers value for gauging breakdowns in the sales funnel and what might have contributed to them. These realizations can, in turn, help guide product improvements, sales or marketing efforts by shedding light on the product’s demand and how your company did or did not intersect it. On the whole, CRMs open windows into data and insights that are useful for the continued ability to strengthen your interactions with leads and customers, enhance your product and improve how you offer and service it.
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