What is Customer Relationship Management (CRM)?
Customer Relationship Management CRM: Definition
CRM refers to the processes and systems involved in managing customer relationships. Customer relationship management means the customer-focused alignment of marketing, sales and distribution. Both strategic and operational areas of the departments are affected. Customer relationship management not only contributes to customer loyalty, but also has a direct influence on business success.
A structured, high-performance CRM system must achieve the following objectives:
- Increase customer loyalty and satisfaction
- Increase sales and contribution margin per capita
- Focus on profitable customers
CRM should be understood as a strategic approach used for the comprehensive planning, control and implementation of all customer-facing processes. CRM encompasses the entire company and the entire customer lifecycle and includes database marketing and the corresponding CRM software as a control tool.
Features of customer relationship management
CRM is based on relationship marketing, which focuses on the relationship with customers; knowledge management, with its ever-increasing knowledge of customers; business process management, which structures customer processes; and other new technologies, in particular customer-oriented information systems.
CRM is broadly understood as a strategic approach to the comprehensive planning, control and implementation of all customer-facing processes. CRM encompasses the entire company and the entire customer lifecycle, and includes database marketing and the corresponding CRM software as a control tool. The aim is to achieve optimum customer orientation.
CRM is therefore not an isolated instrument, but must be integrated into the company’s processes as a philosophy in order to achieve consistent customer orientation. The implementation of a CRM software tool is an important instrument for achieving an optimum overall effect.
The aim of CRM is to ensure the continuity, stability and intensity of an economically attractive customer relationship , to reduce the costs of acquiring and maintaining relationships, and to initiate new relationships through the referral effects of satisfied customers.
Effective relationship marketing mainly uses dialogue or one-to-one marketing tools that encourage interaction between the manufacturer and the customer and conduct a dialogue with existing and potential customers.
At each stage of the customer relationship, there are different approaches and opportunities for concrete CRM measures. Managing customer loyalty begins with the first stage, making contact, even before the first purchase, so the integration of pre-sales and post-sales marketing is necessary. The customer needs life cycle structures the different needs in the different phases of a person’s life. Relationship marketing measures can also be controlled using this approach.
There are different types of customer loyalty. In the context of CRM, it is not important for the customer to be (contractually) bound, but the aim is to achieve a bond that is nurtured by the customer’s satisfaction with the company and mutual trust
Customer relationship management : B2B and B2C
In both the B2B and B2C markets, companies benefit from successful customer relationship management. If potential customers feel understood and addressed, the chances of them becoming regular customers are very high.
According to studies, only 22% of decision-makers say that customer orientation is already very pronounced in their company. The product-driven market for business customers therefore shows considerable deficits when it comes to promoting customer needs. However, this does not take into account the fact that B2B purchasing decisions are also influenced by emotional aspects: for example, how pleasant the purchasing or integration process is for the customer.
In B2B too, it’s a question of identifying customer needs and proposing tailor-made solutions that make the customer feel valued – otherwise the customer will leave at the latest when a cheaper offer is presented by the competition.
Good customer relationship managementis also essential in B2C because of the high level of competition. If customers have the choice of choosing one product from several, the winning companies that the customer finds friendlier and whose services (e.g. faster customer support, additional services such as free delivery and returns in e-commerce) will appeal to them are more trustworthy. A strong inbound sales department can make the difference here.
Successful customer relationship management: CRM strategies and tips for satisfied customers
Do your customers make frequent repeat purchases, leave positive reviews after contacting customer service and voluntarily share your brand content on social networks? Then you can assume that your customer relationship management is successful.
The levers of successful CRM are diverse. Instead of focusing on individual measures, it is important to establish a holistic strategy that makes a positive contribution to your business objectives. The central starting point for this is to put the customer at the center of all management decisions.
Here are five tips to boost your customer relationship management:
1. CRM personalisation
Personalisation is not just a topic that drives marketing efforts, but the entire customer relationship management process. Research shows that companies that create customer-centric solutions and processes are, on average, 60% more profitable.
A CRM approach involves tailoring products to individual customer needs and offering customers a customer service experience that sets them apart from the competition. In addition, customers are divided into groups. Determining the value of commercial success reveals the customer segments you need to focus on.
2. Intelligent CRM software provides recommendations for action
Empathetic marketing, which increasingly responds to customers’ wants and needs, recognises the right times and opportunities to capitalise on sales. By using a CRM system with AI-based solutions and Big Data analysis, trends and forecasts can be identified to deliver value-added services.
CRM software that works with the help of artificial intelligence has the potential to give recommendations for action and so qualify each prospect and convert them into customers at the right time.
3. Use social CRM for customer service
Multi-channel communication needs to be coordinated to collect customer information throughout the customer journey. As well as integrating telephony (call center) and e-mail, CRM systems often also offer synchronisation with social media channels.
On the one hand, companies are doing justice to the growing trend towards using social networks. On the other hand, marketers gain a deeper insight into customer wishes thanks to additional information. Social CRM offers companies additional points of contact (touchpoints) with the target group, opportunities to qualify prospects and force a personalised customer approach.
4. Analyse the data correctly
The more comprehensive the data on your user base, the better you can plan your marketing, sales and service measures in an individual and targeted way. The synchronisation of operational and analytical CRM is therefore a decisive factor in business success. You also create a symbiosis between marketing, sales and customer service, because each department always has the same information at its disposal.
By analysing the information in your data warehouse and filtering out precisely the information that is relevant to strategic decisions, you can align operational measures accordingly. With high-performance CRM systems, you can track user behaviour and identify relevant contact points. This makes it possible to support each customer throughout the customer journey and always offer the right deals.
5. Good service starts with customer relations agents
Customer focus is not a strategy that can easily be integrated into a company’s areas of responsibility. Customer-centric businesses start at management level. This is the only way to create a culture that starts with an organisation’s employees and extends to the service level in customer contact.
Although CRM is becoming increasingly sophisticated with digital tools and solutions, it remains crucial in customer contact that communication is person-to-person. Companies that not only claim to be customer-centric, but also live it as an organisation, will succeed in the long term.
Customer relationship management: the key to success
Not only do satisfied customers buy from companies more often, they also make a conscious decision in favour of the brands with which they sympathise. Thanks to successful customer relationship management, companies can recognise their customers’ needs and offer personalised solutions. Omnichannel communication provides a variety of contact points for gathering information about customers. Fed into a CRM system, the data provides a dedicated picture of the customer journey, so that potential customers can be converted into new customers with relevant offers at the right time.
If you are looking for a professional call center that recruits and trains contact center agents with the best talent to put at your disposal, don’t hesitate to contact us. Advancia Teleservices will be your ultimate ally in high-performance, long-term customer relationship management .
Advancia Teleservices : Customer Services