Are you fully aware of your customers’ needs and desires? Do you truly know who your customers are What about understanding how those needs change over time and being able to respond accordingly?
If you can’t answer yes to all three of those questions, you could be losing customers to your competitors. And that’s a pretty clear sign that you need a customer relationship management (CRM) system.
How a CRM system works is to help you better understand your customers’ needs and help find ways to fulfill those needs while also boosting your bottom line.
And here’s the best part:
An Effective CRM Strategy Can Increase Revenues
You might be wondering just how a CRM works. It’s pretty simple, actually.
A CRM system links up information about customers from many sources including:
- Call centers
- Mobile sales
- Physical stores
- Advertising and marketing efforts
The data collected from these sources then flows between different operational systems within your business – such as sales and inventory, for example – and analytical systems that sort through the data to discover distinctive patterns.
When used effectively, CRM systems help identify the services and products for your customers that are precisely what they need. They also help in cross-selling products, which enables sales staff to close deals faster.
Plus, a CRM system offers enhanced customer care which goes a great way towards retaining existing customers and landing new ones.
Ultimately, every CRM system is designed to help you understand your contacts better, and then put that knowledge to work for you. But since your business or organisation has different divisions with unique requirements, there are four main types of CRM software.
They are as follows:
1. Leads and Deals CRM
As you may have guessed, a leads and deals-focused CRM targets your sales force.
It’s essentially a project management app that helps your salespeople see what they need to tackle next with the contacts in that app.
Since sales is the main way companies make money, a lot of businesses put leads and deals CRM front and center. In fact, they’re the most popular type of CRM.
As your salespeople track customers and clients as possible leads, they add information to the CRM while they continue working to convince the customer to use your product or service.
How a CRM works here is to help your salesforce log the steps and to keep track of the interactions that led from the initial contact to the final deal.
This is critical to help bring together the many members of your sales team who work on the deal, who might not otherwise know exactly where the deal stands at the point in time they’re working on it.
2. Contact CRM
While leads and deals might be the most popular, contact-focused CRM apps are the easiest to use. They’re often the cheapest as well.
This brings us back to the second question in this post: do you truly know who your customers are?
Do you know their birthday? What is their job position where they work? Do they have a favorite order every time you go out for coffee?
This is the personal touch. And when you know something personal about your customer, you’re more likely to create a longer lasting connection.
How CRM works in a contact-centric format is in helping you to gather and curate as much information about the people with whom you’re interacting. You log in during conversations and meetings and then take notes on the interaction.
Then just before you’re set to talk again, you pull up your CRM to keep that data fresh in your mind.
3. Conversation CRM
This CRM eliminates the overwhelming effect of too much email or too many phone conversations.
The tools for conversation-focused CRM are built around all of the email and phone conversations your team has with your customers and contacts.
This CRM allows you to either monitor each of your team’s email inboxes or lets you CC the app on those conversations. It then organises every conversation from across your entire company into the correct contact’s profile.
This enables you to easily see what every person on your team has talked about so that you know what to say – and what NOT to say – before emailing or calling a client.
4. Marketing CRM
With all of your contact data in one place, wouldn’t it be nice if your CRM could do something with it automatically? Well, this is exactly how a CRM works when it has a marketing focus.
Marketing CRM apps tend to be on the more expensive side, but they have some benefits that make it a worthwhile investment.
While this CRM software has tools that are similar to lead and deal or contact CRM software, it also comes with automated workflows. That means you can do things like automatically send an email to a lead twenty-four hours after they click on a link in an email you sent them.
The software could also tag a lead as interested after they’ve opened a certain number of your emails – letting the sales team know that it’s time employ that above-mentioned personal touch.
Once you’ve determined which of the four types of CRM will best serve your company, you need to answer another important question:
Do You Want On-Premises or Cloud-Based CRM?
What are the differences? Read on.
With on-premises CRM, the responsibility for every aspect of the software is in your company. This includes:
- Maintenance of the database
Going this route means that your company purchases licenses up front rather than buying yearly subscriptions. In other words, the software exists on your company’s own servers. You will be responsible for any upgrades.
Companies with complex CRM needs are usually best-suited for on-premises CRM. The installation process to fully integrate your company’s data can be lengthy though.
In the case of cloud-based CRM, data is stored on an external network that can be quickly and easily accessed anytime and anywhere there is an internet connection.
Installation and maintenance are often overseen by a third-party provider.
Companies with limited technological expertise or resources might consider cloud-based CRM as a more cost-effective option.
Are You Feeling Clearer About How CRM Works?
Even if you’re still feeling confused about CRM, don’t worry!
If you want to have a better understanding of your clients and think a CRM could be right for your company, feel free to contact us or start your free 14 day trial below! We’ll help you through the process so you can understand how CRM works best for you.