If you have a growing business, you’ll probably ask yourself at some point: “Do I actually need a CRM system?” Well, if you want to make your business more efficient and responsive to the needs and wants of your customers, then the short answer is yes. Even if you’re not an online business, a CRM system will still be very helpful in terms of building relationships, improving customer satisfaction, and streamlining the way you work.
What is a CRM System?
In brief, a CRM (Customer Relationship Management) system is primarily about strengthening the relationships you have with your customers and improving customer satisfaction through data collection and analysis.
The main goal is to have a deeper understanding of your customers so you can provide better products or services that are tailor-made to their demands. This is based on collected data that is stored in a database and used to reveal the behaviors of your target audience.
CRM systems (we use Hubspot CRM, as an example) can automate and streamline the compilation of customer data from various sources, such as your website, official social media accounts, email signups, and communications, live chats, and survey forms or marketing materials. The benefit of this is when you know your customers or clients well, you’re more likely to be able to retain them as well as gain additional ones.
What are the Components of CRM Systems?
A CRM system consists of different components that work together or in a series. While these components operate separately, they’re designed for common objectives. Their outputs can be consolidated and accessed via customizable dashboards, making it easier than ever to analyze customer data. Here’s a list of the components of CRM systems:
- Data warehouse: This is the database or the digital storage that contains your customers’ information, and is usually accessed via The Cloud. One of its primary functions is to collect transactional information. It merges the information with the products and also provides KPIs (key performance indicators) that can be objectively measured, like the time spent on the website as related to the conversion rate of visitors.
- Opportunity management: Market dynamics can be hard to predict, but some forecasting models can be used to anticipate market trends in consumer demands. For instance, sales history can be used to project sales growth months or even years in advance. This way, you can adjust your production and business expansion based on opportunities.
- Tracking marketing campaigns: You can use CRM systems to assess the progress and success of your marketing campaigns. You can track and analyze data from various networks and platforms. For instance, you can easily analyze the correlation between ad clicks and sales volumes.
- Software as a service (SaaS) CRM software applications: If you don’t have the computer facility or software to handle large data such as transaction records, you can subscribe to a SaaS, like Dropbox. This means that instead of downloading software to your computer, you access it via the internet. This is more convenient because you don’t need very high computing power to use it, and it also saves you a ton of storage.
- Contact management: Most CRM systems have contact management components. These manage various sources of information, from emails and documents to employment information and scheduling for the accounts of clients or customers. Some contact management CRM components are highly specific, focusing on specialized markets such as legal and finance. CRMs like these are meant for event management and relationship tracking.
- eCommerce CRM: This is focused on automating the marketing aspects of a business and includes re-engaging users with personalized emails, especially those customers who have abandoned their carts.
- Customer-centric CRM: This is a relatively new component of CRMs that is considered to be a sub-aspect of the system. Instead of focusing on customer leverage, it focuses on customer preferences. Customers are engaged at an individualized and personalized level so that an interactive business-customer relationship is promoted.
- Non-profit CRMs: These CRM systems are intended for NGOs, foundations, and other non-profit organizations. Here, non-profit CRMs help these organizations to track their stakeholders, providing insights on things like fundraiser events. The goal here isn’t to boost sales or help refine a marketing strategy, but to facilitate better relationships with the sponsors, benefactors, volunteers, and beneficiaries.
- CRM strategy: We just mentioned it in passing, but the data you can get from a CRM system can also be used to inform your business or marketing strategies. They’ll not only benefit from the use of advanced technology and data-driven decision making, but also from a more integrated approach that combines the knowledge and skills from employees, corporate culture, and the philosophy of the organization.
What Types of Businesses Use CRM Systems?
A wide range of businesses can benefit from using CRM systems, including both B2Bs and B2Cs. From manufacturers and wholesalers to retailers, a CRM system can be an effective tool not only in streamlining your customer relations but also in growing your business.
Here are some examples of business sectors that use CRM systems:
- Tech manufacturing companies: Technology can change in the blink of an eye, and as it does, consumer demands change with it. Companies must monitor and quickly respond to the changing wants and needs of customers. An electronic gadget, like a smartphone, for instance, can easily become obsolete within a year. Mobile phone manufacturers like Apple are able to set trends because they’re in tune with their customers.
- Online retail companies: Online retail companies, like Amazon, experienced significant business growth because of the pandemic, which necessitated more than ever the need for online shopping. The large volumes of orders require constant monitoring and updating if the retailer wants to continue meeting its customers’ needs, something that would almost be impossible to keep track of without a CRM.
- Delivery and courier companies: Delivery and courier companies are also among those whose businesses grew during the pandemic. Virtually all types of consumer products, from groceries to apparel, can be ordered online and delivered via couriers. Therefore, delivery companies need databases for both consumers and businesses that use their services.
- Real estate or brokerage companies: Real estate companies need to continually update their inventories and list of clients. They also need to qualify potential clients and also appraise the value of real estate properties based on the market dynamics. CRMs help to do all of this in a clear and organized way.
Do I Need a CRM System – and if so, Why?
Of course, the list of companies who might need or use a CRM system isn’t limited to these sectors. Any company that has a sales team, a marketing function, raises invoices and is invested in putting the customer first while increasing efficiency stands to benefit from a CRM system.
So, do you actually need a CRM system right now? If you’re a small business, the answer might be, “Not yet.” In most cases, small businesses that have a few hundreds of clients can function well without a CRM in place. For example, if you’re running a small online store or have a private practice with a manageable amount of clients, you don’t need a large and well-integrated CRM system; a simple database will be sufficient.
However, if your business caters to thousands of customers or more, you’ll likely need to collect data and measure KPIs in order to understand and engage with your audience. Therefore, the scale of your business is crucial in deciding whether you would benefit from a CRM system.
What Do I Need in a CRM?
Not all CRM systems are the same. Some are highly specialized based on the type of business. Before choosing one, you should first have a clear understanding of your business and its goals. The direction of your business must be clear to you in terms of market identity and potential scalability. Similarly, the products or services that you’re offering must also have a clear target market with specific needs and customer profiles.
Whatever type of business you have, your primary reason for needing a CRM system is to collect and use relevant data from your customers. You also need that system to provide you with some insights based on KPIs that are relevant to your business objectives. For instance, if you have an online store, you need a CRM system that is integrated with your website, email campaigns, and social media accounts. The data that you will be able to collect will be largely based on the online metrics that you will set, so know your goals, do a bit of research, and choose wisely!