What is CRM? [The Complete Guide for Beginners]

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That means they are slow to follow up. Their messages aren't personalized, and more time is wasted on outdated processes. Cloud-based CRM systems, an integral IT service, came in as a strategy to rectify this very problem, turning companies into well-organized units.

CRM was the largest software market in 2017, and the trend will steadily continue to grow as more companies realize the benefits of CRM technology integration. According to HubSpot, engaging customers by providing customer touchpoints with CRM, which is a strategic resource, increases the odds that they’ll buy more products by 20 to 40%.

Despite their widespread availability, and even with the prevalence of free, open-source CRMs, not every business is taking advantage of online CRM software. A few years ago, 18% of salespeople didn’t even know what CRM pricing was and shockingly, 40% of salespeople were still using dated resources like Microsoft Excel or Outlook to store their lead data. Switching to a dedicated CRM service provider can greatly enhance productivity and customer satisfaction.If you’re struggling with outdated processes or frustrated with your current software's ability, it’s time to get up to speed with cloud-based CRM systems. A pipeline of resources and CRM tools is readily available to help every team member, especially your employees, get started with CRM. These useful tools will change your business activities, effectively simplifying and organizing them.

The term “CRM” stands for “customer relationship management.” As a concept, customer relationship management is a method of using data and analysis to optimize your company’s interactions with both your customers and potential customers. CRM is particularly focused on sales growth and customer retention—a strategic component pivotal for any organization's success. A good CRM solution keeps track of customers' history and experiences with your business, enabling you to respond to their needs effectively. In this era, efficient CRM technology, such as the ones offered by online CRM software, plays a paramount role in connecting various customer touchpoints.

Although it may not make sense grammatically, you’ll often see and hear the term referenced as “a CRM” or “the CRM.” In this context, a CRM is a type of software that helps you manage your customer relationships. This solution, or rather, CRM solution, has become a staple system across businesses and service providers globally, helping improve customer retention rates and maximize return on investment out of your marketing budget.

When they first hit the market, you had to install CRMs on your business computers with a hard copy like any other type of software. But today, most CRMs are cloud-based tools you can log into with an account. As the business world has become so complex and interconnected, CRM providers have expanded their software’s capabilities to include customer segmentation, thus enabling email campaigns and aiding customer support teams in resolving issues more rapidly. These CRM tools keep a record of your employees' activities while providing the ability to answer important questions regarding customer interactions. In the digital age, Customer Relationship Management (CRM) systems have become an indispensable solution, playing crucial roles in growing businesses and ensuring the security of customer information.

Some of the most popular CRM systems include:

Operating at the basic level, CRM systems are much like a digital Rolodex. They safely store the vital data of all your contacts, ranging from their email addresses, phone numbers, names, job titles, and more, within a secure IT infrastructure. Easy access to this data greatly helps beginners efficiently handle customer interactions, elevating their customer support teams to provide superior service.

What is CRM?

Today’s CRMs, however, provide much more value than just being a digital Rolodex. The best of them can integrate flawlessly with almost all your other sales, marketing, and even third-party analytical tools, offering solutions that potentiate the maintenance of a smoothly running business.

Experts mainly categorize CRM into three types: Operational, analytical, and collaborative. Some CRM systems combine all three types, constantly emerging with new and thrilling applications, much to the delight of their users.

Operational CRM software is tailored to streamline and optimize business operations. Achieving this primary function through automation— a computer technology that performs a task or a sequence of tasks with minimum human intervention—CRMs can efficiently support various business processes such as sales, marketing, help desk support services, billing, and even HR. These processes, especially sales, marketing, and customer services, form the core functions of an operational CRM.

Marketing automation tools, a crucial ingredient of CRM systems, track visitors on your website, noting their actions and any data they put into form fields. This technique, which operates under the umbrella of contact management, enables you to discern who is interacting with your marketing assets and what their motivations might be. It equips you with detailed customer experiences information for each site visitor, allowing you to market to them more effectively and efficiently manage your marketing budget.

Drawing from a comprehensively designed dashboard, your CRM manages the data collected to customize your messages when conducting email campaigns and other forms of outreach, eliminating tedious manual processes. CRM features also come in handy in managing the sales cycle, especially when making calls or engaging in chat sessions with potential and existing customers.

On the sales side, automation tools facilitate the creation of workflows, scoring of leads, and automated reminders for follow-ups, thereby improving customer retention rates and bolstering return on investment. Through these CRM features, it's easier to manage the sales pipeline, track calls and chats, thereby maximizing productivity and enhancing customer experiences.

• HubSpot CRM
• Salesforce
• Oracle CRM
• Zoho
• Sugar CRM
• Agile CRM
• Pipedrive

Customer Service automation tools filter customer activity and immediately notify your agents of new tasks while providing immediate responses to customer queries. This boosts the efficiency of your customer support teams through real-time chat communication. You can even automatically update a customer's account data with minimal data entry. The expanded CRM capabilities, including integrated sales tools, can significantly streamline this process, resulting in better team productivity and contributing to successful customer acquisition.

The key to using a CRM system successfully lies in its ability to harness and manage data, an aspect that surprisingly, up to 73% of companies overlook according to Forrester. Modern CRM solutions like MailChimp have evolved to fill this gap, doubling down on sentiment analysis tools to extract invaluable insights, particularly from data obtained from chat sessions and calls, throughout the sales cycle.

The analytical component of a CRM performs automatic data collection at specific touchpoints and correlates it with different contact profiles. For example, if visitor A arrives at your website, your CRM may record their IP address. Consequently, armed with insights derived from their data, your system might greet them with a personalized dashboard, enhancing their customer experience.

Operational CRM Software

However, the most critical tools for analytical sales and marketing CRM software are segmentation and analysis tools. By harnessing your customer behavior tracking data, you can segment different contacts, leads, and customers based on various criteria, thereby enhancing customer acquisition strategies and improving your team's productivity.

Lastly, for analytics, you need a way to measure the success, or otherwise, of every action taken. This is pivotal in calculating the ROI of all your efforts, managing your sales pipeline, and improving overall customer experiences. Your CRM can compare contact data with campaign data, action point data, and other figures to give you a clear snapshot of how your campaigns are faring in relation to your metrics and KPIs. Modern CRM solutions, laden with sophisticated features, can provide valuable insights into customer behaviors, preferences, and responses in various stages of the sales process through sentiment analysis.

In a legacy business model, most departments are siloed leading to inherent challenges. In other words, your marketing, sales, and customer service teams may all be part of your business operations, and crucial to customer engagement, but they might as well work at different companies. There is little communication between them and they each have their own initiatives and processes. CRM solutions, as part of an overarching CRM strategy, aim to bridge this gap and enhance productivity by bolstering inter-departmental communication and collaboration.

In some of the worst cases, there may even be distrust and finger-pointing between the departments. This calls for strong managers to oversee the integrative processes and establish a tighter collaboration.

As bad as this is for your company and your culture, it’s even worse for your customers. Most customers expect a seamless and uniform experience when they interact with a business, whether they’re reading an email or speaking with a customer service rep. This is where customer interaction comes into play, reinforcing the need for rapid and reliable responses. Strong customer data management practices, supported by CRM solutions, can help to meet these expectations reliably.

They want you to know who they are and what they need immediately, and they won’t tolerate it if you’re missing information or they must wait while you process requests. With the advent of artificial intelligence, customer needs can be anticipated, greatly improving the efficiency of these processes.

Collaborative CRM software brings all your teams together into the same system, sharing dashboards, analytics, and tools, so you can create a more seamless customer experience. This unified view facilitates greater productivity across your sales teams and more effective customer support, making the most of CRM capabilities for customer acquisition and retention. Have you ever wanted your sales team to write for your blog? Or, incorporate their valuable sales process insights into your campaigns? Your teams can also collaborate on campaigns when working under a collaborative CRM system. Furthermore, they can streamline and manage their work using workflow automation, keeping track of numerous tasks, subscriptions and managing interactions across social media channels.