The right customer relationship management (CRM) software will transform your business. Used to its full potential, you’ll sell more and your customers will stay with you for longer. In the fast-approaching era of artificial intelligence (AI) plug-ins and application programming interface integrations, CRMs will also improve business efficiency through task automation.
What is CRM software?
Customer relationship management software gathers and stores a wide variety of data on your customers and prospects in a highly streamlined way.
Think of a CRM as a company-wide centralized database that catalogs every customer interaction from purchases to disputes over time. Everything is recorded in great detail from the first time they appeared in your sales funnel.
But it’s more than a database. It’s an information resource for your employees. When they want to know about a customer, the CRM presents everything it knows about the customer on demand.
It’s also a business management tool. You can run reports on important CRM metrics like:
- Sales performance: Track revenue across the business, by product and category, by customer or whatever metric you choose. Spot trending products and know in advance what your monthly or quarterly revenues are likely to be.
- Marketing return on investment: See real-time marketing campaign performance figures from email clickthroughs to conversion rates from website visitors.
- Customer service: Get a better understanding of customer satisfaction levels by keeping track of the issues customers call in about (also great information for teams developing your products), how fast team members respond to inquiries and how quickly they resolve client issues.
- Staff activity: Check out revenue and conversion rates to find out who your superstars are and who needs extra training.
For CEOs and sales managers, you can see live pipeline data like how many leads are coming in, how many convert to sales and where the weak points in your sales funnel are. Track in real time how your sales, marketing and customer service teams are performing in relation to their KPIs.
From small software-as-a-service systems to on-premises enterprise installations, CRM software is available in various sizes and can be customized to match the needs of small, midsize and large businesses.
The first CRM systems were ACT! (1986) by Pat Sullivan and Mike Muhney and GoldMine (1989) created by Jon Ferrara and Elan Susser.
What are the benefits and impacts of CRM software?
Eleven important ways that CRM software helps businesses improve include:
1. Automated data entry
Automated data entry saves staff a lot of time. Which is time that they could spend being productive instead. You benefit from more detailed, more insightful customer profiles because the CRM is there in the background recording every action and interaction.
Everyone in the business gets access to the same information. Any time a staff member makes a change to a customer record in the CRM, the record is updated for everyone. CRM software makes it easy for your employees to retrieve any customer’s details when they need them.
Their algorithms give them the ability to spot and eliminate duplicate records so that each customer only ever has one profile in your system.
2. Smarter reporting
Not being able to forecast future revenues makes decision-making harder.
A CRM shows you how many new leads come in, where each opportunity is in the sales funnel and what your current deal pipeline might be worth. You can track each inquiry and opportunity at every stage.
You can monitor which staff members are doing most to get business in and which ones are missing revenue key performance indicators (KPIs). You can run reports to see how well individuals, groups and departments are doing as well as tracking average spends, conversion rates and much more.
Being able to judge performance across a range of real-time KPIs gives owners a broad oversight of the health of their business, which informs decisions on future sustainable growth. [Related article: 3 Keys to CRM Success for Small Businesses]
3. Higher productivity in collaborative work
Employees who have access to accurate, live individual client information deliver the best possible customer experience. Reps move potential deals through the sales funnel faster.
The best CRM software fosters collaboration — staff members across teams can work on documents together and share important data and insights with each other. They also have more time to spend on profitable activities when they let CRMs automate previously manual processes.
The result is higher productivity, streamlined processes and better customer retention rates.
The more stressed your staff, the less productive they’re likely to be. Reducing workload through CRM automation is a great start as is a positive work culture, employee wellness programs and helping staff achieve the work-life balance they seek.
4. Efficient, centralized data management
Working from multiple databases, as many companies still do, means that many of your staff are working with old or inaccurate data.
Bad data leads to poor email marketing campaign results as bounce rates are higher. Not having up-to-date information on a client calling in with a problem can sour the customer experience further. [Related article: Stop Data Decay in Your CRM]
As modern CRMs store your centralized database in the cloud, every system user can access real-time information whenever they need it keeping everyone on the same page.
5. Enhanced, break-free communication
When one sales rep leaves and another replaces them, this has to be carefully managed to keep the client. That’s because clients want a sense of continuity.
Clients don’t appreciate having to explain their story or problem from the start to a new person every time they call up. CRMs improve both presale and after-sale service because they hold the details of every interaction your company has had with a customer.
Employees can get at these records quickly so they can familiarize themselves with a client and pick up a sale or query right where the previous conversation left off.
6. Task automation
A lot of rep time is wasted on filling in paperwork, creating and sending reports to managers and sorting out customer onboarding issues. Sales reps sell — many struggle with administration. Automate reps’ tasks instead so they get more hours in the week to bring in revenue.
Modern CRMs automate many of the everyday tasks associated with various employee activities giving your teams more space in their working days to focus on more important activities.
7. Mobile CRM
Modern CRM software, especially platforms based in the cloud, allow employees to access client data from their mobile devices.
This means they can now manage their appointments, tasks and deals more efficiently, even if they’re on the move.
Since working from home is a practice likely to continue, choosing a system that allows colleagues to access CRM data may be essential, so a cloud-based platform may be better for your business.
8. More specific, targeted marketing
The most successful marketing campaigns are data-driven and the result of trial and error.
CRM software allows your marketing team to customize campaigns to improve the chances of making a sale. Decide which products to promote, discounts to offer and the call to action that you use based on a customer’s interest, needs and previous orders to deliver a real, individual experience.
9. Precise customer segmentation
Segmentation is when you split a big database of customers or prospects into smaller ones based on one or more shared characteristics. Retail store owners often segment their database by the proximity of their customers to specific stores. Online retailers may use demographics, such as age, marital status and more.
Segmentation improves marketing campaign results. CRM software allows you to divide your customers into groups based on age, location, gender or other categories. Smart segmentation increases the likelihood that a sale happens because you are making tempting offers specifically geared to customers based on personality and behavior characteristics.
10. Efficient sales cycles
CRM software gives reps a broad view of their sales contacts, pipelines and deals on one screen.
They also give sales managers greater visibility into which deals might be coming in. A few CRM systems now allow you to plug in AI components that predict which customers or prospects are likely to close first, what the deal size will be and the predicted lifetime value of a customer.
Both sales reps and managers can turn to the CRM for performance evaluations and a clear picture of the work needed to reach upcoming sales quotas.
11. Social media engagement
Social CRM tools allow you to manage customer relationships on Facebook, Twitter, Instagram and other platforms.
You can track hashtags and keywords, manage and respond to customer reviews on social media and maintain a consistent brand voice across various social platforms.
Social media offers new interaction opportunities for companies as well as the ability to augment their customer data even further, turning platforms into new sales channels.
What are the best CRM software solutions?
There’s much competition in this market so you have plenty of CRM options when looking for a solution to fit your needs.
Popular options include:
- Salesforce: Highly adaptable and intuitive but with a bit of a learning curve. In our review of Salesforce CRM, we were impressed by the software’s ability to launch and manage end-to-end customer loyalty programs.
- monday.com: This platform offers extensive integrations to third-party apps like Slack, Zoom and Zendesk. We also liked the platform’s intense focus on reducing repetitive tasks to drive efficiency and productivity. Learn more in our review of monday.com
- Zoho: Their CRM software is part of a much broader range of business-to-business apps and, as you’d expect, they all work very well together. Zoho enables excellent intercompany collaboration between colleagues, in-depth reporting and it’s started to roll AI out across the platform. Learn more in our review of Zoho CRM.
- Freshworks: An excellent choice for companies with sales representatives, Freshworks features a built-in phone dialer and chat widget. Sales managers can monitor rep performance on a granular level and easily alter workflows as needed. Learn more in our review of Freshworks CRM.
CRM software is not cheap. Costs go up often with every new feature you add. But the right choice will quickly deliver improvements in revenue, productivity and employee satisfaction.
Rohit Prasanna and Max Freedman contributed to this article.