What Customer Relationship Management is and how does it work, the company strategy for obtaining lasting and valuable relationships with its customers.
Customer relationship management (CRM) is the set of tools, strategies and processes aimed at establishing and increasing relationships with the customers of a given company, in order to cultivate lasting interactions.
CRM what it is
When we talk about CRM in the business environment, we often refer to a program or software that allows you to manage and keep track of the customer portfolio.
However, even before being a tool, Customer Relationship Management is a real business strategy for establishing lasting relationships with the customer. The goal of CRM is, in fact, to retain customers or acquire new ones.
It is mainly based on data analysis: everything concerning the customer, such as habits and needs, can be studied in order to improve Customer Satisfaction. The main means of keeping track of this information is the database: purchase preferences, usual orders, demographic data and contact information are examples of useful data to collect.
How to build the CRM
As already mentioned, Customer Relationship Management is not just a tool, but a real strategy to be adopted in the company. The elements with which it is built are mainly three:
Culture: is represented by the values of the company, through which the objectives to be achieved and how to do so are identified. For this reason, when choosing to adopt a CRM strategy, culture is the basis for building an efficient methodology.
All company departments must, in fact, be aligned according to the same vision, which in this case can be represented by Customer Centricity.
A "customer-centric" approach is one that pays attention and care to the customer, gathering information on their needs and developing products and services aimed at satisfying them.
Processes: represent the set of interrelated activities, necessary for the functioning of the company, and therefore to achieve the objectives. Processes can be defined as all the inputs that make it possible to provide a specific product or service to customers.
To implement a CRM strategy, for example, it will be necessary to establish where to look for new potential customers, who and how they will have to relate to them, what information about the customer to record and where, to whom to make it accessible and in what way, etc.
IT infrastructure: that is the CRM technology, program or software that assists a company in managing all the data shared in the databases. Thanks to a Customer Relationship Management software it will be possible to control all aspects of customer relations.
Types of Customer Relationship Management
After outlining the main components that contribute to the implementation of a CRM strategy, we can identify 4 macro areas of Customer Relationship Management, based on the activities and methods of application of this strategy.
Operational CRM: aimed at providing technological solutions and processes to automate and improve all contact activities between customer and company. For example, it can use software that integrate marketing, sales and service functions, which use the data and information collected in all these phases about a customer.
Access to this data is in fact essential for the Sales and Marketing departments, as it allows them to segment customers, manage promotional campaigns, automate sales processes and manage the services offered to the customer, such as after-sales and customer care;
Analytical CRM: it is based on the storage, analysis and processing of information collected by the operational CRM, relating to current and potential customers.
The data may also come from sources external to the company and can be collected in databases made available to the various company departments, to facilitate decision-making processes;
Collaborative CRM: uses communication tools (telephone, fax, email, etc.) to put the different actors involved in the distribution chain in contact.
Information on suppliers, distributors, customers and partners is shared between departments and groups, or within the entire organization, to facilitate collaboration;
Strategic CRM: it develops from a corporate culture that puts the customer at the center of every process. The goal is to build customer loyalty by collecting information on specific needs, in order to be able to propose ever new solutions to their needs.
It is important that this culture is spread throughout the company - from the leadership style to the brand identity - and that all the resources allocated can increase the value for the customer as much as possible.
5 Advantages of CRM
The CRM allows you to collect and analyze all customer data such as personal data, the source of acquisition, the status of the deal, products and services adopted, active marketing campaigns, open or closed assistance tickets, etc.
For this reason, the implementation of a Customer Relationship Management strategy can bring significant benefits to the entire organization.
Among these we highlight five in particular:
- Making this information available to several company departments allows you to speed up their work and increase company productivity;
- It will also be possible to manage the data in an advanced way, for example by focusing on potential and valuable customers, with ad hoc programs, to customize the offer with "tailor-made" products and services enriched with added value;
- Sharing information helps to improve collaboration between the various teams, such as the sales department and the marketing team, also in the management of follow-up and customer requests, favoring Customer Retention;
- Thanks to the many data available, it is possible to create increasingly accurate sales forecasts, as well as having an overview based on analysis and reports, which can offer a complete overview even to top management;
- CRM allows, finally, to identify and successfully manage sales opportunities, reducing the risks associated with the mismanagement of a customer or the use of obsolete procedures, with a consequent potential increase in sales and, therefore, of profits and revenues.
Implementing a CRM Strategy can therefore represent a competitive advantage for the company: it is an important tool for connecting departments and divisions that often carry out separate jobs and risk dispersing valuable information.
Leveraging Customer Relationship Management allows you to stimulate innovation, bringing benefits to all levels of the company.