Customer relationship management or CRM for short is a simple idea that helps you learn about your customers, and use that knowledge to help build a stronger relationship. Once you have that stronger relationship, you can use it to help you to sell your products and services, and then enhance the relationship further and sell them more.
In this article, let’s discuss customer relationship management software in a little more detail than that. If customer relationship management helps you to sell more stuff then it's not surprising that helping businesses to do this is big business and there are a lot of consultancies and a lot of software tools available out there to help us.
However, if you put all of your focus on software tools and maybe on processes then you will miss the most important aspect. The most important aspect of customer relationship management is building a culture, that is a set of attitudes among your staff and team members that says they want to build relationships with their customers and they're going to work hard to do it in an organic way.
Back in the old days traders and tradesmen knew all of their customers because they were largely local. They were small businesses and they could get to know the people they dealt with but that is not the case anymore. By the 19th century, businesses were already starting to outgrow this model; it was no longer possible for businesses to get to know the personalities of their customers when they were starting to span whole countries or even the globe.
In the early 20th century, businesses were starting to look at loyalty programs ways to attract and retain specific customers and customer groups to further grow their business. To do this they needed data and by the early 1990s technology was becoming powerful enough and cheap enough to open up this possibility to ever more businesses.
Now everyone in the business could in principle have access to the data and the software could aggregate combine and analyse that data to provide powerful insights for marketers for sales people and for customer care representatives now we can record and access all sorts of data about every single suspect prospect and customer and today's organisations don't just draw their data for their CRM systems from their own marketing sales and customer care records.
Increasingly, they're prepared to buy data from specialist companies now even small and medium-sized businesses can buy large amounts of data. This is why Microsoft bought Linkedin. Because Linkedin contains millions upon millions of data records that microsoft can now sell to its customers for their CRM systems.
So, what is a CRM? Well, customer relationship management is the process of managing the organisation's interactions and communications with all of its current and potential customers. As you learn more about your customers, you can create more targeted marketing offers, promotions and sales messages. As your customers get to know you better they become more likely to buy all of this.
This means more profits for corporations but it is not just commercial organisations that use CRM not-for-profit organisations and governments also use CRM to be in touch with their service users however when most people talk about CRM what they're actually thinking about is CRM tools the software that we use while this is wrong.
It's important to acknowledge that CRM software is a big part of the process and choosing wisely is therefore a big part of your success. Your CRM service can help with contact management, customer intelligence, sales management, marketing automation and customer service.
So now I'd expect you to be asking what the CRM process is? How do we do customer relationship management? Well I'm going to simplify it into five basic steps. Step one is to set up your system. You need to define a customer relationship management process and you need a software tool to embed that process and make it work.
There are a huge number of options for this there are big names like sap oracle and microsoft who work with large and medium-sized enterprises there are also niche players like Hubspot and salesforce and then there is a bewildering choice of CRM options for small businesses many of which integrate very well with standard office packages or with email communications packages next you need to gather your data because a CRM system and process is only as good as the data you have and the way that you use it.
You need to build and manage your data set gathering information from every interaction you have and possibly considering buying data third and crucially you need to build a culture. If you want to get value from your CRM system and processes, you need to build a culture where people will use it willingly and use it effectively. This is by far the hardest part but I reckon that a mediocre system used really well will give you far better results than a gold standard system with a very poor culture around it.
Fourth, you need to identify your leads and start communicating with them use your customer relationship management software system to figure out where each of your customers and potential customers are in their customer journey we looked at customer journey in another video once you've done that build a pattern of automatic and manual communications with your customers and the balance between manual and automatic will depend on the type of business you have the kind of relationship you have with the customer and frankly the scale of your business.
If you are a consumer business with millions of customers almost all of your communications will of course be automated if you're offering high value products and services to a small number of selected customers then most of your communications will be personal you need to put a lot of work into understanding how your messages mesh with your customers journey and how if they divert from the journey you are hoping they went on you'll be able to send them new messages and communicate with them in such a way as to return them to the path that you want them on.
Finally, step five is to improve your products and services using the information you learn from your CRM processes. One often overlooked benefit of a good CRM system is the ability for it to give you insights into how your customers feel about your products, your services, your brand, and your business.
If you aren't using this information then you are wasting a large part of the capacity you've built the CRM may also tell you what products and services they're going to want or need next that will help you feed into the pipeline of new product development indeed you can actively use your CRM as a way of asking customers surveying them meeting them speaking with them to find out their perceptions and their priorities.
As a result CRM can help you to spot problems with your service or the reliability of your product and it can help you spot gaps that you can fill with other profitable products so CRM is a very valuable tool for all marketers these days most businesses down to the very smallest have some form of CRM process using some form of CRM system and if you've not yet had a chance to engage with it you will at some point so it's important that you understand about it
