Teamleader Blog Article

What is CRM?

Cedric Auman Cedric Auman on 19-Apr-2019 16:31:31 in Sales & Marketing

What is CRM?

If your business uses CRM, you’re probably well aware of what it can do for your sales revenue and customer relationships. If you don’t, this blog provides an honest perspective on all the things Customer Relationship Management could mean to you and your company.

What does CRM mean? 

CRM is an acronym for Customer Relationship Management. It’s a strategy to manage all your company’s relationships and interactions with your potential and current customers. In more recent years, people have broadened the scope of CRM to managing relationships with all valuable stakeholders in the business, such as colleagues, suppliers and resellers.

People typically talk about CRM in relation with different words such as software, a system or a strategy. More commonly, instead of just referring to CRM, people use the term CRM system, software or tool interchangeably as a way to manage contacts, sales, improve internal processes and productivity.

CRM: strategy or software? 

It’s both. CRM is indeed a strategy, but that strategy will need the support of technology to really get off the ground. You can create the perfect blueprint to maintain customer data mistake-free or meticulously follow up on your leads… but without software support, you might as well throw your strategy in the bin. Soon, it will require a dose of manual labour that’s hard to maintain once you get more customers.

Likewise, using CRM software can get you on the right path to success, but it doesn’t mean much on its own. Just like a decent pair of football boots don't necessarily make you a world-class football player, CRM software is only useful if you have an effective strategy and implementation to back you up.

In practice, a solid CRM strategy and CRM software walk hand in hand.

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What type of business needs a CRM system? 

CRM what type of business

Every business that sells products or services to more than a handful of leads and customers will benefit immensely from a CRM system.

Your company’s priorities depend on the goals you have in front of you. Yet all of them should be closely connected to your (potential) customers: how to find them, sell to them, and keep them.

To illustrate, let’s start with a broad generalisation - albeit one that is based on years of experience dealing with SMEs - and say there are two business archetypes. Note: the majority of businesses will probably fall somewhere in the middle.

  1. Businesses that want to keep growing and reach for the stars. They want to keep hitting ambitious sales targets and show strong growth in revenue. Their goal? Being as productive as possible to become bigger and better every day. 

  2.  Businesses that want to stay healthy by maintaining solid, steady results. Growth is great, but secondary to running a profitable, future-proof business without having to work seven days of the week. Their goal? Managing a sturdy, relatively worry-free business.

If you want ambitious growth, you need to efficiently turn leads into customers, and make optimal use of opportunities to offer those customers more goods and services.

Solid and steady business owners, in turn, will need to use their resources well and build a durable database of customers, preferably to maintain long and loyal relationships with.

Whichever goal your business wants to achieve, you need the same things: a crystal-clear overview of up-to-date, clear lead and customer information, coupled with operational efficiency. A CRM system gives you both.

Can my business live without a CRM? 

Before opting for a CRM system, many companies choose to use a regular email application, Excel spreadsheets, task managers, sticky notes - just whatever works for their business at that point in time. If your company is just starting out or you’re a one-person business with just a few customers to take care of, that’s definitely not a bad way to start.

But businesses change. They grow, and luckily so. There’s no way to measure the precise number of leads and customers your business must have to really need a modern CRM system - but you don’t have to become Amazon before your company outgrows those decades-old ways of doing business.

Eventually upgrading to a more professional system and centralised platform to manage contacts becomes a necessity to keep an overview of a growing customer base and handle more customer interactions.

Life without CRM 

Do you think using Excel, post-it notes and your inbox is okay and convenient? Then you’re not alone. But there are some really good reasons why you should consider a CRM. The best way to illustrate the importance of CRM is by showing you a few typical scenarios of life without a CRM system.

  • Communications can get lost in the flood: what happens if a co-worker gets ill or is on holiday? The communication history with a lead might suddenly be inaccessible, or you have to dig through emails to find it. Having this information in one CRM system allows anyone who needs it to keep tabs on important interactions.

  • The risk of lost sales opportunities is bigger: say a salesperson is working on 30 deals. Without a CRM system, it’s difficult to get an overview, prioritise and remember to get back when promised. CRM helps you track this in one overview, and remind you when follow-up is due, so a sale can never fall through the cracks.

  • It’s a challenge to make sense of data: creating insightful reports in spreadsheets is not for everyone. It also takes away valuable selling time. If you do crunch the numbers manually, it gets time-consuming to answer important questions like: How many leads did I get last year? Where are most of my sales coming from? How much revenue do I expect to earn next quarter? CRM can deliver this to you - quickly and easily.
  • No overview of what your team’s doing: a lack of oversight into the tasks and agenda of your team means you’re never fully up to speed. You might want to know if your co-worker finished that important task, or follow your team’s performance. CRM takes away the need for assumptions by making information readily available for everyone.

The benefits of CRM 

What is CRM benefits

CRM software can offer plenty of small and bigger benefits that justify its reputation as a smart solution for improving sales and customer loyalty.

Here are some examples of day-to-day CRM use:

  • A lead calls and you want to have the best sales talk? Use your CRM to check up on your colleague’s notes about this customer, view a lead’s stage in the sales funnel and know which actions follows next.

  • A customer calls and you want the conversation to be helpful and efficient? Use your CRM to look up the customer profile, view past interactions (email, telephone, etc.) so you have enough information to help a customer out right away.
  • You organise a small event and want to inform only local leads about it? Use your CRM to add geographical information for each lead. You then have a potential mailing list of people in that region available at your fingertips by simply filtering on location.
  • You want to improve your sales process and know which leads to contact today? Use your CRM to check which leads are in the right stage to follow-up

What is CRM software used for? 

At the most basic level, CRM software started out as a system to consolidate customer information and documents in a central location so businesses could access and manage them more easily. Basically, it allowed companies to have a clear overview of all the information they had on their customers - in one place. “Information” of course encompasses a lot: it’s more than just names and addresses. There’s also previous purchase information, geographic location, company size, communication history and plenty more.

Over time, functionalities of CRM systems have expanded which made them much more useful. The data in a CRM system began to serve as the launching pad for running a smoother business. Below is an overview of some common functionalities of CRM software:

  • Sales and lead management: CRM basically enables salespeople to track and analyse leads in once place. It gives a clear window into each step of the sales process: which leads exist and who’s responsible for them, which sales opportunities should be prioritised... A CRM also informs you about sales performance and basically tells you who’s doing what for each lead for maximum transparency.
  • Analytics: CRM can provide you with profound insights into who your customers are, their needs, what your biggest source of leads is, how much they’re buying from you... Depending on which other functions your CRM has (such as time tracking, project management - see the bullets below), it can also tell you how your team’s performing, how much revenue you’re making, how much time you’re spending, and much more. This level of granularity helps you make informed, strategic decisions to improve and grow your business based on up-to-date information.

  • Customer support: a CRM system can also offer a support inbox that links all customer interactions (for example, complaints or questions via email or telephone) with the corresponding customer profile. This gives you an overview of the entire conversation history and all interactions.
  • Project management: by connecting the sales management aspect of CRM with project management, this type of CRM skips time on sales administration and can move from having a project offer accepted straight to managing a project. What’s more, it allows you to easily keep customers up-to-date on project status and monitor the lifecycle of your project. For projects budgeted on time and material, time tracking functions can be an added bonus.
  • Invoicing and workflow capabilities: A large number of CRM systems let business optimise their day-to-day processes by automating repetitive tasks such as creating and sending quotations or invoices.

CRM: rising to a $40 billion market in 2018

As companies begin to see that (long-term) customer relationships are their most valuable assets, more and more companies, big and small, are looking to invest in CRM. According to renowned research company Gartner, at the end of 2017, the worldwide CRM software market was worth a whopping $39.5 billion. In 2025, this is expected to double with $81.9 billion.

Julian Poulter, Research Director at Gartner, expects the CRM software market to reach the number one position in the software industry this year:

“In 2018, CRM software revenue will continue to take the lead of all software markets and be the fastest growing software market with a growth rate of 16%.”

The rise of Mobile CRM

What is CRM mobile CRM

The use of CRM on mobile devices is on the rise and that’s no surprise: according to Statista, in 2017, global mobile internet traffic amounted to 52.99%, surpassing desktop traffic. As a result, mobile CRM has massively increased in importance.

Mobile CRM creates the option to access and update data from anywhere and share information with co-workers on the go.

Furthermore, its adoption seems to correlate with increased sales success: research from Innoppl Technologies shows that 65% of businesses that use mobile CRM achieve sales targets, as opposed to just 22% of businesses who don’t.

The future of CRM 

As technology continues to evolve (see new developments with artificial intelligence and the internet of things), so do CRM platforms. What does the future hold? Here are some must-know trends shaping the CRM landscape:

  • More and more businesses are using software to help support them in their day-to-day efforts. Tools for email marketing, group chat, accounting, online payments, file management and more are becoming commonplace. As your company’s backbone, CRM is trending beyond just standalone software, and is designed to work well alongside a company’s other business tools, hency why even more third-party integrations will start popping up.

  • As CRM is becoming more mature, mobile access to CRM through a mobile app will be at the top of the list for software requirements as well as the possibilities to use mobile for CRM.
  • To help accommodate the rising demands of SMEs, more functions will be merged into one application. Look for the merging of invoicing, project management, sales and customer support features.

  • The latest technology trends such as artificial intelligence and machine learning are new to the CRM space and are still in their infancy. A CRM is a treasure trove of useful data for AI to thrive on: AI will allow companies to better serve clients and automate more routine tasks. These types of technology will make software smarter by predicting patterns, recommending new processes and providing deeper analytics and insights.

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