Customer Relationship Management or CRM software is a system that enables businesses to build strong customer relationships and manage all relevant customer information and data. CRM includes tools and applications to collect, process and analyze data coming from various interaction channels such as website visits, phone calls, emails, social media and others. CRM software organizes and tries to make sense of all these disparate data in order to extract useful information that can show sales opportunities, and be used to create sales funnels as well as carry out sales and marketing campaigns.
CRM software is designed to let businesses know everything about their customers, both existing ones and prospects. A business can be responsive only if it knows what a customer wants, and a CRM system can help in finding out customer preferences and behavior through their purchasing history and buying trends. CRM helps businesses put focus on the customers to drive engagements and interactions, strengthen customer loyalty, convert prospects to actual customers, improve products and services attuned to customer tastes, and give the best customer experience. All these are intended to bolster business growth and profitability.
What are the benefits of CRM software?
Businesses of all sizes and types in whatever industry can take advantage of the many benefits of CRM software. The system has been around for decades, but with today’s cloud technology it has taken on a bigger role and deeper significance. It has become more affordable, scalable, lighter, faster and mobile compatible. No more hardware setup or extensive training. It can be up and running immediately. The current crop of CRM software available in the market brings with them powerful functionality and features that can help your business realize the following:
- Increase sales – CRM software allows you to follow quality leads, check customer buying histories to identify potential leads, upsell opportunities, or repeat customers. It can identify your most valuable customers and create a customer reward system or personalized communication to increase engagement and conversion. You can also pinpoint weak links in the sales process and address them promptly.
- Boost efficiency and productivity – The software streamlines processes across your business operations to make sure sales opportunities are not lost and costs are minimized. Employees can access important data quickly to serve customer needs or resolve issues faster. CRM also integrates processes like accounting, inventory and sales for a seamless pipeline, avoiding repetition of tasks. Items like contracts, events, projects and products are aligned in one CRM infrastructure for faster turnaround of deliverables.
- Make intelligent decisions – A well-informed manager with access to real-time data can make adjustments quickly to react to market trends. CRM can produce accurate insights from real-time and on-location data. This means you can fine tune your strategies or tactics right away to take advantage of an opportunity or avert a crisis. Likewise, more accurate data permits the pooling of best practices by different departments to further improve overall business operation.
- Reinforce data security – Confidential customer data and trade insights are kept in a centralized CRM system instead of separate and disconnected desktops. You can focus your budget, human resources and capital infrastructure on one item: the CRM ecosystem. You can set parameters so only authorized employees can access the data, while keeping a close tab on a single channel for any instance of breach.
- Allow mobile operations – Mobile technologies today allow field teams to access CRM data like customer personal information, purchases or product information and delivery schedules on location and make decisions or reports on the spot, in front of the customer. Other field applications of mobile CRM include checking real-time inventory, checking customer credit limits, receiving alerts like out-of-stock items, and processing approval in minutes instead of days.
Overview of the CRM industry
CRM first started in the early 70s when annual surveys were used to gauge customer satisfaction. It has evolved through the decades and in recent years has become a thriving sector experiencing continued growth. The expansion of the CRM software industry has been pushed mainly by cloud technology facilitating the adoption of the software as a cost-effective SaaS platform. Since 2010, the CRM market has been on a continued upswing, growing at an average of 27% year over year and valued at %36 billion in 2016. For 2017, the latest forecast saw the CRM market exceeding $40 billion.
To give you an idea of how CRM has become an indispensable tool in today’s business, here are some 2017 CRM statistics culled from various sources:
- ROI on CRM is approximately $5 to every $1 invested (Baseline)
- 79% of leads fail to convert without CRM (Pardot)
- 30% of all leads fail as a result of bad data sources (Cyber Sphere)
- 26% is the recorded adoption rate for CRM (Salesforce)
- 65% boost in sales quotas is realized by businesses with CRM (Innopple Technologies)
- 41% revenue increase is attained with CRM (Trackvia)
- 60% of the time, CRM is used for email marketing by small businesses (MarketingCharts.com)
- 47% of the time, leads nurtured in a CRM system are converted (Annuitas Group)
- 300% improvement in conversion rates with CRM in place (Cloudswave)
- 40% improvement in average purchase value with CRM (Cloudswave)
- 23% reduction in lead cost with CRM (Cloudswave)
- 47% improvement in customer service with CRM (Capterra)
- 26% improvement in retention via Social CRM (Nucleus Research)
- 74% of businesses using CRM report better customer relationships (Software Advice)