For this reason, we have prepared the most complete guide for you to learn what a CRM is and how it can help your company. Let's get started!
CRM system definition: What is it?
CRM is a type of business software that enables Sales, Marketing and Customer Service to collaborate in managing customer touchpoints.
Why is this tool so important? This new era of information technology has changed the way we consume, directly impacting the way we conceive relationships between customers and companies. And an essential factor in this is data.
The CRM system is the answer to both questions and provides a new strategy for managing customer relationships through data. It includes a platform that facilitates teamwork between the departments that are most involved in these tasks.
What is a CRM system?
What is meant by CRM then? CRM stands for Customer Relationship Management . Which, in its translation into Spanish, is known as Customer Relationship Management .
What does a CRM system do in a company?
So, to sum up, what does a CRM system do for a business? A CRM system is responsible for managing the relationship between customers and a business through a comprehensive database with basic information about both.
Is a CRM system the same as an ERP?
No, they are not the same thing. But they work together. CRM focuses on managing customer relationships, while ERP manages the company's internal resources and processes.
The CRM system looks outward (sales, customer service), and the ERP looks inward (finance, inventory).
Why use a CRM system? Data
What is the importance of CRM for a company? Let's see what the experts say.
1. When you use a CRM, according to Salesforce:
- Sales increase by 29%.
- Improve sales productivity by 34%.
- Accurate projections are made in 42%.
2. Other CRM statistics indicate that:
- 74% of CRM users see improved access to their customer data.
- 35% of large companies are satisfied with the use of a CRM.
- 37% of small businesses benefit from using CRM software.
3. According to a study by HubSpot , some of the advantages of a CRM are:
- A CRM can increase conversions by up to 300%.
- By using a CRM, you can increase your customer retention rate by 27%.
- Marketing costs are reduced by 23%.
- A CRM can help increase your company's sales by 30%.
4. A study by Aberdeen Group indicates that 81% of the most effective companies in their sales use a CRM on a constant basis .
5. If we manage to capture a customer's attention through a CRM, the user will increase their purchases by 20% to 40% the next time.
6. The CRM market is expected to have grown by 12% per year by 2025, increasing to $82 billion.
These numbers are general. By learning more about the features of a CRM , you will discover how its benefits can positively impact all areas of your company, generating better productivity and, of course, higher sales.
But before reviewing how a CRM improves performance in multiple areas of your business, we will continue to delve deeper into how this tool works.
What is a CRM for? Main uses and operation
The CRM system is a functional tool for solving both internal and external management dynamics. Therefore, the main applications of CRM are in the areas of:
- Customer Service
- Sales
- Marketing
- Operations
Let's see how this tool can help in each department.
1 | CRM System in Marketing
The main raw material for marketing actions is knowledge. No advertising strategy can work if there is no knowledge about the public, the product and the clients it is aimed at.
The CRM system in Marketing is a valuable addition to create and monitor marketing campaigns with a high rate of effectiveness. Employees in this department can use the database in real time to customize advertising messages precisely according to the profile of their clients. The result? High conversion rates, without a doubt.
Among its main benefits we can name:
- A comprehensive view of each client through a centralized platform.
- Group customers based on a similar profile to automate communications.
- Increase knowledge of current customers' opinions to efficiently seek out potential prospects in the market.
- Identify trends in the behavior patterns of brand users to improve the performance of marketing campaigns .
2 | CRM System in Sales
The new sales strategies of this century are marked by speed and personalization. Customers want to buy products quickly, with customer service that shows they are known and valued as consumers.
Therefore, the CRM system in sales helps to automate sales processes and improve the efficiency of sales representatives. The transformation of leads into loyal customers is done in just a few steps.
Some of the benefits that we can highlight are:
- Availability of updated and real-time information about customers at the time of the transaction.
- Tracking the customer through the stages of the sales funnel in which the customer is located.
- Increase knowledge of different user profiles to identify key moments in which to offer a personalized offer.
- Generate reports with updated data, allowing the development of a sales strategy in line with the actual behavior of customers.
3 | CRM System in Customer Service
As we mentioned, users are looking for companies that provide them with a rewarding experience. And all commercial interactions in this century seem to point towards the same approach.
That is why the CRM system in Customer Service collects data on the interests, tastes, and needs of customers in order to draw up a profile of them. With this information, the department can rework its commercial strategies so that they adapt to what the customer is really looking for, directly strengthening the relationship with them.
We can name the following benefits:
- Update your customers on new products, features or relevant information about products or services of interest to them.
- Personalize interactions based on the user's personal data and information.
- Sending coherent and appropriate responses to customer queries, in the channel appropriate to their profile.
What is the purpose of a CRM system?
The main objective of a CRM system is to manage strong, productive and loyal relationships with customers, through a superior and highly rewarding experience. The following secondary objectives arise from this purpose:
1 | Answer basic customer questions
The CRM system seeks to know its customers to such a degree that it is possible to anticipate or predict their most common questions. By providing answers in advance, not only are some of the sales agents' tasks automated, but the company's transparency is also increased.
2 | Managing customer data
Proper information management produces quality data that, in turn, generates effective decisions. The CRM system is responsible for optimally storing the data and reviewing it in a timely manner for its use.
3 | Automate sales processes
Thanks to artificial intelligence and unified databases , the CRM system can create a sales process adapted to the current customer portfolio. This will free up agents' work schedules and also reduce lead conversion times .
4 | Customize Marketing Campaigns
A solid marketing strategy involves a variable degree of presence in each communication channel such as social networks, websites, emails , among others. However, managing interactions through these can be complex. The role of the CRM system is to align marketing campaigns and respond to each interaction through the same platform efficiently.
5 | Sales and Marketing Alignment
Keeping Sales and Marketing areas separate can mean wasting resources and efforts. The CRM system aims to ensure that both areas communicate effectively and work on a project together with unified and up-to-date information.
Features of a CRM system
CRMs have special features , before selecting one, you should compare CRMs to identify the best one. Generally, they offer features like the following:
1 | Lead Management
A high success rate in closing sales operations is not only based on obtaining potential clients . It is also about managing and classifying them for their correct assignment at the moment of the sales funnel in which they are located.
With this CRM system feature , sales agents can quickly personalize their dealings with a potential customer until the sale is completed.
2 | Contact Management
Through CRM system contact management you can organize your business contacts in one place. This enables information regarding the latest interactions with a customer, top queries, and a complete history of their relationship with the company. This information is used to estimate the best time to contact a customer, and through which medium to do so.
3 | Email Management
Business email inboxes are often clogged. It can be difficult to remember who is who, what they needed, and why they contacted the company in the past. That's why a CRM system allows you to categorize incoming emails based on specific parameters to follow up with a customer.
4 | Sales Automation
Administrative tasks are huge time-hogs for sales agents. With sales automation, the CRM system can take care of routine tasks by designing an intelligent workflow. This way, the right tasks will be assigned to the right agent.
5 | Reports and Analysis
CRM system helps in the organic evolution from an intuitive to a data-driven model of decision making . This is thanks to its intelligent analysis and reporting function that processes data from various sources. In the long term, this tool becomes a great competitive advantage.
6 | Marketing Automation
Wasting resources on a marketing campaign that failed due to an error in reading the target audience is very common. Therefore, one of the characteristics of CRM is to help this department analyze the current client portfolio and predict the profile of potential clients . Always with a reliable, accurate and updated database .
It also allows you to run comparative analyses on advertising spending versus the company's sales revenue, allowing you to identify the success, or failure, of a given campaign.
7 | Personalization
The main characteristic of a CRM system is that it does not work on the premise that all companies are the same. It recognizes diversity, which is why it is responsible for providing a platform that is the starting point for process optimization, allowing each brand to adapt the product to its needs and requirements.
Advantages and Disadvantages of CRM System
Now, is it really so positive to have a CRM system in the ranks of a company?
The truth is that CRMs have both advantages and disadvantages. Let's analyze them in detail:
Benefits of a CRM
Including a CRM in your business strategy will give you a series of advantages that can become a valuable point of comparison with your competition. Let's look at some of them:
Establish a centralized database in your company
All customer and lead information is especially relevant for marketing and customer service teams, but also for the entire organization.
With a CRM, this data is available to everyone at all times, creating consistency in the way you respond to customers.
Automate data entry
A CRM system allows you to automate tasks such as sending a welcome email to new users or collecting data from forms, without having to manually enter it into a spreadsheet or database .
It is a comprehensive tool
The CRM system considers the user experience as a whole. By not focusing on a single aspect, it allows the departments involved to join forces in customer knowledge, personalization of interactions, and anticipation of their needs.
Organize your contact information
Another benefit of CRM is that you can track your leads and customers at any stage of the consumer journey to know when contact has occurred and through what medium. For example:
- Visit the website.
- Download content.
- Interactions with other members of the company.
Allows you to segment customers by categories
Using a CRM system , you can segment customers into lists based on specific criteria such as location or stage in the sales funnel. This increases conversion possibilities by allowing you to plan how to approach them at any given time.
Improve conversations
Another advantage of CRM systems is that they allow the analysis of customer intentions. In this way, the sales agent can identify in a few seconds what the customer's needs are, what their doubts are and from which channel they prefer to receive a response.
Deliver follow-up reminders to potential customers
Since a CRM system records all of your leads ' activity , sales will be aware of the specific moment when a potential customer needs to be followed up with. This makes it easier to generate meaningful interactions for customers.
Allows you to make informed decisions
Knowing what is working and what is not allows you to increase your efforts or stop a strategy immediately. The CRM system provides this data in a format that is easy to understand and share with other teams. With this data, you can choose the most appropriate option at the current time, always prioritizing the smallest margin of error.
Optimize sales processes
The ultimate secret of sales processes is to send the right content, to the right customer, at the right time. It may seem simple at first glance, but without the right data this strategy has no promising future. Thanks to the CRM system, it is possible to gather the data and categorize it in a logical order that allows for clear action on the concrete.
Foster internal collaboration
If your sales team consists of more than one person, the benefits of a CRM system are clear. Sharing the same complete and up-to-date database allows group communication to flow naturally and reduces errors or duplication of tasks.
Provides a comprehensive view of the business
Being a comprehensive tool that facilitates the work of many teams simultaneously, it allows for a panoramic view. Each area dumps the results of its efforts into the CRM system database , which allows for contrasting information and generating analyses that reveal the current state of the company or its strategies.
Build customer loyalty
Knowing who our customers are and what their needs are allows us to create an effective loyalty campaign. This allows us to identify the main problems or seasonal needs of customers in order to provide a personalized offer, for example.
Increase productivity
With the CRM system taking care of the more complex analysis tasks, or automating sales or lead categorization processes , sales agents can dedicate their efforts to customer conversion.
Automate sales performance projections
If you can plan your sales decisions accurately and strategically, success is assured.
Using CRM system reports , you can establish monthly and annual indicators. With these metrics, it is much easier to identify trends and create performance projections.
It also allows you to identify which of your company's activities are most profitable and to be able to project this information to adjust strategies in the future.
- Learn a little more about Indicators in CRM
Disadvantages of a CRM system
Every product has its drawbacks depending on the profile of each company. Let's analyze the disadvantages of the CRM system to identify if they apply to your particular case.
Investment in employee training is required
The CRM system has multiple applications, but they all require training to learn how to get the most out of them. When implementing a CRM, you will have to dedicate exclusive time to training your employees in how to use it.
The requirements of the Data Protection Act must be met
The CRM system works with our clients' data. This requires us to give them the best use and treatment, so you must comply with the requirements of the Data Protection Law. Any information you require from your clients must be provided with their express consent, and there must be the option to remove them from the database if they wish to do so.
You must provide high-quality security for computer systems that contain such data. This can also lead to higher costs.
Implementation costs and specialized equipment can be high.
This disadvantage is common in small companies. They usually cannot afford the high costs of this product.
Employees may resist using it
When it comes to implementing a CRM from scratch , employees who will be using it may be somewhat hesitant. This is usually because they are used to a different type of operation, and naturally, change makes them anxious.
It doesn't fit all businesses
There are companies that have a homogeneous public, which does not require market segmentation to boost their sales. In these cases, the implementation of a CRM system does not make much sense.
How does the CRM platform work?
This automation is ideal for facilitating communication between the various areas of the organization, so that the company can work in an aligned and orderly manner.
Thus, the response that the client receives from different employees will always be the same and can be quickly consulted within the history that the system creates for each user.
With its process automation, CRM software gives your business the ability to not only achieve higher conversions, but also to obtain value from each of the interactions that a prospect made on your company's website or social networks.
Following the same line, CRM works like this:
1 | Knowledge
In the first phase of CRM , your role is to help the customer discover the product and its intrinsic value. But to do this, you must find the right customer for this product. The task of the CRM system is to categorize a potential customer base and select those who have the right profile. This is a phase of research and conquest.
2 | Increase
After the research, communication with the client takes place. The aim of this phase is to get the client to discover other products marketed by the brand.
Based on the data collected, it is possible to provide recommended products that maximize the user's shopping experience.
3 | Retention
Now that we know our customer and they have already started a relationship with us, it is essential to achieve complete loyalty. Thanks to CRM analysis tools , it is possible to identify consumption trends and purchase frequencies.
In this way, we will find those customers who generate the most profit for our company. The next step is to offer them an extra experience, such as discounts, offers or promotions, that reward them for their loyalty to the brand.
What types of CRM exist?
It is also prudent to mention that there are various types of CRM , with different functions and approaches. Each company may choose one or another depending on its nature.
1 | Types of CRM according to their main function
CRM System Operational
Operational CRM is the most common CRM on the market. It is responsible for optimizing processes so that the interaction process with the client is dynamic and fast. Its function is to ensure customer satisfaction, so it will work with data related to satisfaction levels and frequent complaints about the products.
Based on these, you will create strategies for approaching and interacting with the client at the time of the sales cycle in which they are located.
Analytical CRM System
Analytical CRM, on the other hand, is responsible for analyzing a client's past and present interaction history. Thanks to these, it is possible to predict future profiles of potential clients , and the trends that will occur in the short, medium and long term.
In addition, within the sales cycle, it creates general profiles and sales trends according to each stage of the process. In this way, it allows them to get to know their clients and find new market niches that can be exploited.
Collaborative CRM
The main task of Collaborative CRM is to monitor interaction with customers on all available communication channels. Through lead classification tasks, it sends to sales agents those prospects that are most likely to become potential customers .
2 | Types of CRM according to their access method
Cloud CRM system
For a monthly fee, you can access a cloud-based CRM system through any device with internet access. This prevents the company from having to take care of installation and maintenance, and transfers this responsibility to the service provider.
Generally this type is usually offered through the Software as a Service (SaaS) system.
Local CRM system
In this model, the company pays for the installation and maintenance costs by paying for a license. The company receives the CRM system in local format, which it must install on its computers. However, this option allows you to select which tools or features you want the product to contain.
In this case, the possibility of creating your own CRM opens up. That is, carrying out a custom development.
3 | Types of CRM according to their code
There are two types of CRM according to their code:
- Free or open source CRM : Requires a specialized team to install and customize the program. They are usually free.
- Private or closed source CRM : The code and modification rights belong to its provider, so the product cannot be customized and you must pay for the right to use it.
4 | Types of CRM according to their origin
They are not only classified by their functionalities, but also by their geographical origin, that is, the countries in which they operate or for which they are designed.
Local CRM
These are specifically designed to operate in a specific country or region. These CRM systems are optimized to comply with local regulations, such as electronic invoicing or tax management.
We have compiled the main ones:
- CRM in Argentina
- CRM in Mexico
- CRM in Peru
- CRM in Chile
- CRM in Colombia
- CRM in Costa Rica
Global CRM
These systems are designed to work across multiple markets and are used by companies that operate internationally. They are typically very robust and scalable, with customization options to accommodate different local laws, currencies, and languages.
But this robustness is often accompanied by higher priced plans.
5 | Types of CRM according to their specialization
In addition to their origin, CRMs can also be classified by their specialization in specific sectors or industries. This is where they are divided into horizontal or vertical CRMs.
This categorization is crucial because certain sectors have very specific needs that a general CRM cannot optimally cover.
Horizontal CRM
They are designed to be used in a wide range of sectors without a specific specialization. They usually offer common functionalities to any type of company.
Vertical CRM
These are CRM systems designed for specific industries and offer tools that address the unique needs of that sector. Some examples of specialized CRMs include:
Integrating CRM systems with other tools
1. Calendar integrations
This process allows you to connect to a meeting directly from the CRM software, create alerts and send invitations. You can also see your schedule availability in real time, thus improving coordination times.
2. Email Integration
By integrating your email into a CRM system , you can review all the emails your company receives and have access to all the contact data found within the software.
This is ideal for sending templates and campaigns to all your clients.
- Learn more about email marketing with CRM here.
3. Integration with Social Networks
Social media is an essential sales tool. By integrating it with a CRM, you can obtain more information about your target audience and identify which content is most shared or which has the most views.
Additionally, through a CRM system you can automate posts on platforms such as LinkedIn, Facebook and Twitter.
4. Integration with communication tools
You can integrate a CRM with business communication software like Slack, thus improving your team's coordination and optimizing the accessibility of information.
For example, you can also connect a CRM with WhatsApp.
5. Integration with calling software
This integration makes it easy to plan and execute calls with potential clients or meetings with your team. The CRM system will save the call details and contact information for greater visibility and future reference.
6. Video integration
If videos are part of your marketing strategy, you can integrate platforms like YouTube through a CRM system . The software allows you to record which videos or content have the most interaction with your audience, data that is relevant when it comes to generating better strategies to attract new customers.
7. Integration with documents
With this feature, you can send proposals and signed contracts in a single tool, as well as include your clients' information directly in your documents. All this data is correctly synchronized and saved in the CRM.
8. Integration with forms tools
With this integration, it is possible to obtain a lot of information from potential customers through forms and surveys. All the data that users enter on these platforms will be directed and synchronized with your CRM software, allowing them to be easily analyzed later.
9. Live chat integration
Integrating a CRM system with a direct chat with your customers allows you to obtain valuable information from the conversation history. With this data, it is possible to engage new audiences.
10. WooCommerce Integration
It is essential to connect your WooCommerce platform to your CRM. This way, all of your users' purchasing behavior will be immediately integrated into the software, synchronizing product and contact data, to obtain complete information about your buyers.
11. Integration with events
If your sales strategy includes planning events, whether live or virtual, integration with your CRM system will allow you to identify the importance of user attendance in the sales funnel. In addition, you will be able to keep the information of the people who bought their ticket to attend the event, which provides the possibility of contacting them later.
12. Integration with forms software
You can achieve a CRM integration with WordPress or through other similar platforms such as Mailchimp. This way, you will get updated data on contacts and potential clients without having to manually upload this information.
Integrating a CRM system with multiple tools provides significant time savings, as there is no need to manually organize data in the systems. With these automations, business processes can be carried out more fluidly so that the focus of your company is not data entry, but sales.
When should a CRM system be implemented?
- Organizing spreadsheets and notebooks takes a lot of time
- Your customer service is not standardized
- You lose business opportunities by not having key information
- You can't personalize your customer service
- Your team is not integrated due to remote work
How to implement CRM? 5 key implementation steps
For an investment in CRM software to make sense, the system you choose must fit the real needs of your business.
This is something you can ensure by first identifying your company’s core goals. Whether you’re implementing a CRM system for the first time or switching vendors, it’s always a good idea to put this data on the table to make good decisions.
Additionally, you need to think about how each CRM example (because there are hundreds of options) can contribute to the competitiveness of your marketing, sales, or customer service teams.
1 | Sales process planning
Analyze how your sales process works . Be careful to be detailed and meticulous in describing each step.
It is preferable that this step is documented, as it will also help with the insertion of new collaborators into the CRM system . This work will also help you identify problems in the sales cycle, in order to optimize it before starting the CRM implementation .
2 | Identify your company's needs
This step will help you measure the success of your CRM software implementation . Consider each technical and operational aspect that you need your new customer management system to address.
It is important to be specific and punctual, as this will help you transform your objectives into concrete actions. It is also recommended that all staff involved participate in this task to enrich the experience.
At this point, you will come to the conclusion of how advanced or simple you need your system to be.
You may even come to the decision that an Excel-based CRM is sufficient at this current stage.
3 | Plan the automation that the CRM system must carry out
With your goals outlined, you need to plan CRM automation . That is, the steps it will follow to solve the problems you want to address. This must be aligned with your sales strategy and result in a concrete action.
4 | Train staff
The only way to ensure the success of implementing a CRM system is with a team that is skilled in its operation. Spend time training your staff so they learn how to take advantage of each tool.
After training in the use of the program, it will be easier for them to find problems and offer solutions or creative uses of the software.
5 | Analyze and optimize CRM system processes
CRM software does not do its job alone. It requires a team capable of reading and interpreting data and reports, to identify problems in the process and develop appropriate solutions. It adopts a vision of constant improvement and optimization to achieve the set results.
Mistakes to avoid in your implementation process
- Think of CRM as just software. Instead, you need to view the purchase as a technical improvement, but also as a business philosophy.
- If you are changing providers, don't choose software that is similar to what you already had. You are supposed to be looking for a new system to meet needs you didn't have before.
- Don't expect a CRM system to solve all your business problems. Set realistic expectations so you can design a workable strategy.
Conclusion
In this article we have extensively reviewed the main aspects of a CRM system . We hope that this basic guide will be helpful in understanding the potential of this tool for your sales, marketing, and customer service team .
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