What is CRM?

Just recently, we have discussed how to engage with your target customers and how to create a better relationship with your audience. Therefore that same article, we have briefly mentioned Customer Relationship Management or CRM. So, what exactly is a CRM?

This article focuses on managing customer relations or CRM. So we will go through the basic key terms and concepts used in CRMs, and why it plays a massive role in marketing. 

There are also different forms of customer relationship management, so each one has its own set of pros and cons. Each one can make a positive benefit to your business. In addition, we will also go through the importance of data, provide a step-by-step guide to implementing CRM. But first, let us discuss what is CRM.

Definition of Customer Relationship Management (CRM)

Customer relationship management has been around for a long time. It has existed since people first started selling things. Yes, it is an ancient key to marketing. 

Remember how good it feels when your local shopkeeper stopped to chat with all his customers? The shopkeeper remembers everyone’s names. Therefore, there are even freebies available for those who are loyal customers. 

This beautiful way of making each customer feel valued and special is a form of customer relationship marketing. Marketers and companies use this to build better relationships with customers and create long-term loyalty. At the end of the day, loyal customers translate to a better bottom line.

Digital Market

In today’s technologically-advanced world, most businesses are becoming digitally remote. This means that person-to-person contact has become more scarce. A simple click can even buy your groceries online and have them delivered to your doorstep. The days of interacting with your local shopkeeper are a rarity. 

However, that doesn’t mean that CRMs are gone too. In fact, now more than ever, customer relationship management is crucial. In a world of faceless companies and anonymous online shopping, creating a personable and engaging relationship with customers is important.

CRMS has to work harder in order to fill the gap between attracting and retaining customers, as well as their goodwill. therefore, it is no secret that the relationship a customer builds with a company is the reason they keep returning. So no one would go out of their way to buy a product or a service from a company if the customers do not feel like they are valued, or if they do not have a great relationship with the company. 

With that being said, building a customer relationship today is more difficult than ever, too. We live in a society where data is protected, and customers are smart, their right to choose is often exercised. Most importantly, with everyone going digital, your competitors are just a few clicks away. 

Importance of CRM

These are some of the reasons why CRMs are more important than ever. Having a customer-focused approach to business will help to not only get new customers but foster long-term, meaningful relationships, too.

Keep in mind that CRM is not about immediate profit. Your efforts in building a CRM doesn’t necessarily translate to your bottom line right away. Instead, it is about the lifetime value of a customer. 

This means that with CRM, you are focused on the customer’s purchases in the future, the positive impact they can generate through word of mouth, and the loyalty they will show your brand. Your brand’s relationship with your customer base will reflect on the longevity of your brand. 

If people will see that you have a great customer base, they will be encouraged to try your services as well. We all know the benefits of having great reviews from loyal customers. 

An effective CRM enables businesses to collaborate with customers to inform overall business strategies. It is also used to drive business processes, support brand development and maximize the return of investment.

Keep in mind that your customers’ voices are heard everywhere these days. In other words, with just a few clicks and taps on smartphones, customers can tell social media, blogs, forums, and review sites what they think of your brand. Therefore, this can create a large impact on your business.

Basic Concepts

Below are the commonly-used terms and concepts when it comes to talking about CRMs. You will be reading about these key terms and concepts in the next few articles. It is best to lay them all out before we continue further. Check them out below:

• Customer – this one is pretty easy and self-explanatory,  a person who buys or uses goods or services. He or she is the one whom a company should develop a relationship with.
• Customer-centric – this means placing the customer at the center of an organization’s business planning and execution. 
• Customer-driven – this means allowing and encouraging the customers to drive the direction of a business.
• Customer relationship management (CRM) – is a technique for controlling the relationship between a company and its current and future customers. Most of the time, CRMs use technology to automate the whole process. This includes automating sales, marketing, customer service, and other technical processes.
• Key Performance Indicator or KPI – this refers to a metric that shows whether an objective is being achieved.

Basic Key Terms

• Metric – this is a defined unit of measurement.
• Customer lifetime value or CLV – this is the profitability of a customer over their entire relationship with the business. 
• Data mining – is the process of analyzing data to discover unknown patterns or connections. 
• Model – this refers to a strategic visual representation of a process that a company adheres to.
• Prospect – the word prospect refers to a potential customer.
• Stakeholder – the term stakeholder is used to define a person or an organization with an interest in how a resource is managed. 

Those are the most basic key terms and concepts that you will read about in the next few articles. In the next article, we will discuss a few important topics including the CRM model, and how to understand customers better. We will also go through CRMs and data. We hope that this article has shed a light into what a CRM is, and how you can use it to your brand’s advantage. 

© Image credits to Bruno Thethe