Importance of CRM in the New Normal

Date of Publication: 25 July, 2020

COVID19 has changed the Business Landscape to a New Normal…reliance on technology has never been perceived to be so high. Online CRM technology could be the game changer.

This article is for the uninitiates to understand what CRM is all about and how it could prove to be your game-changer.

Every challenge, every problem,

is an opportunity in disguise.

Anirban Guha

Anirban Guha

Digital Marketing Expert | Media Strategist | Entrepreneur

Table of Contents

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More of Digital Tales

▀  Introduction

To understand the importance of CRM we must understand - What it is all about?

The Definition

Importance of CRM in the New Normal​ 1

Customer relationship management (CRM) is a technology to manage interaction for the company with current and potential customer . It has a simple goal to improve business relationships. Based on data analysis, it helps companies to stay connected with the customers, specifically focusing on  process optimization, customer retention to drive sales growth.

CRM is  usually refered to as a system tool which helps with contact management, sales management, productivity, and more.

A Little History

CRM (Customer Relationship Management) as a concept dates back to the ’70s. It started as a survey initiative to evaluate customer satisfaction generally by front-line asking. It was in the early ’80s, that Kate and Robert D. Kestnbaum introduced the concept of Database Marketing, applying statistical methods to analyze and gather customer data. Later in the decade, based on the principle of digital rolodex, Pat Sullivan and Mike Muhney released ACT!, a customer evaluation system, that, for the first time, offered contact management service.

It was not until 1993, that Thomas Siebel designed the first CRM. With rising demand of stand alone CRM solutions, the established ERP companies like Oracle, SAP, Peoplesoft and Navision introduced embedded CRM modules. These modules included sales force automation and customer service as CRM features within their ERP solutions.

1999 saw Seibel introducing the first mobile CRM app – Siebel Sales Handset. It was soon after, that the idea of stand-alone, cloud hosted and moveable customer bases was adopted by Peoplesoft, Oracle, SAP and Salesforce.com. The first open source CRM came into existence in 2004, developed by SugarCRM. This led to a huge drop in price, making CRM, which now was rapidly migrating to cloud, accessible to smaller companies, especially, in the west.

With the surge of Social Media around 2009, there was another evolution happening with CRM, the Social CRM solutions came to existence. From about 2013, most of the popular CRM solutions focused on business intelligence systems and communication software to improve corporate communication and end-users’ experience. As a result, today we see highly customizable CRM solutions with industry specific approach to meet the needs of every business.

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Fig. 1.1. Types of CRM

As shown in the fig. 1.1 under broad classification CRM can be divided into 4  main systems based on characterisitcs

  1. Strategic CRM
  2. Operational CRM
  3. Analytical CRM
  4. Collaborative CRM

Let us understand these in brief:

# 1. Strategic CRM

Strategic CRM is a type where business puts the customers first. It collects, segregates, and applies information about customers and market trends to come up with better value proposition for the customer.

These businesses know the customer buying behavior, that happy customers buy more frequently than rest of the customers. If any business is not considering this type of CRM, then it risks losing the market share to those businesses, which excel at strategic CRM.

# 2. Operational CRM

Operational CRM integrates and automate sales, marketing, and customer support through a dashboard which provides these information on a single customer view. The dashboard may be customized to provide detailed client information, past sales, previous marketing efforts, and more, communicating all of the relationships between the customer and the firm. Operational CRM is made up of 3 main components: sales force automation, marketing automation, and service automation.

Sales Force Automation

SFA is the application of technology to manage selling activities. It standardizes a sales cycle and common terminology for sales issues among all the sales employees of a business. SFA has six modules, as below –

  • Product Configuration − Design a product and  the price for a customized product based on if-then-else structure.

  • Quotation and Proposal Management − Generate quotation of the product prices and proposal with details such as customer name, delivery requirements, product code, number of pieces, etc.

  • Accounts Management − It is for inward entries and storing transactional records for credit and debit amounts.

  • Lead Management − Lead qualification and a locating them to sales person.

  • Contact Management − Details of customers linked sales persons calendar and auto dialing numbers. Using this application, your sales person can communicate effectively with the customers.

  • Opportunity Management − Identify and follow the sales process from leads to sales and beyond.

Market Automation

Market Automation serves both as stand alone solution as well as being incorporated in CRMs. It is another core part of operational CRMs.

Marketing teams have their hands full — run campaigns, generate leads, nurture leads, facilitate sales team, and keep the customers coming back for more. Market automation helps to increase their efficiency and productivity.

Service Automation

This module relates to customer service. It involves service level management, resolving customer issues, and addressing inbound communication. It involves diagnosing and solving the issues about product.

Benefits of Operational CRM

Operational CRM has got immense importance when it comes to handling you marketing and sales.

  • It helps you track critical information — From leads to sales KPIs
  • Gives insights to find new opportunities to sell, cross-sell and up-sell
  • No more boring repetitive jobs saves you time and money.
  • Manage a range of different marketing campaigns
  • Gives your customer a self-service option

# 3. Analytical CRM

An analytical CRM is the key to discover and analyze the vast amounts of data you’ve collected. This tell you to continue doing what’s successful and optimize what’s not. This makes it a very important.

Analytical CRM has three important features,

Data Warehousing

This is where an analytical CRM start. Data warehouse is simply a central place where you integrate and store data from a variety of sources.

Data Mining

It is a complex process to make sense of the stored data and turn the raw information into useful insights. It has a number of techniques, such as association, classification and anomaly detection to find patterns and assign meaning to the data.

OLAP ( Online Analytical Processing)

OLAP is a powerful technology for data discovery, including capabilities for limitless report viewing, complex analytical calculations, and predictive ‘what if’ scenario (budget, forecast) planning. It is the foundation of business intelligence tools, which let you play with data sets so you have the knowledge needed to take necessary actions.

Benefits of Analytical CRM

The use of analytical CRM gives you rich insights so that you are equipped to take critical decisions for your business.

  • It acts as a guiding tool for you to improve customer satisfaction
  • It tell you when best to cross-sell or up-sell
  • Increases customer retention rates
  • Makes it easy to target prospects, leads and customers with relevant content
  • You can grow revenue by analyzing what sells and what doesn’t
  • Helps you identify your weaknesses
  • It creates detailed customer journeys and buyer personas
  • Helps to ptimize your marketing campaigns

# 4. Collaborative CRM

Techopedia defines it as a “CRM approach in which the customer interaction data of an organization is integrated and synchronously shared to enhance customer satisfaction and loyalty for maximized profitability and revenue.”

Collaborative CRM is an alignment of resources and strategies between separate business entities for identifying, acquiring, developing, retaining,
and maintaining valuable customers. It is employed in B2B scenario, to conduct product development, market research, and marketing jointly, incorporating internal departments and external stakeholders such as suppliers, vendors, and distributors.

Collaborative CRM has two main features,

Interaction Management

It helps to facilitates the development and implementation of contact channels.

Channel Management

It relies on data synchronization and integration to streamline interaction media.

Other Features

  • Activity streams for individuals, teams, contact records and deals
  • Video conferencing tools
  • Integrations with collaboration platforms like Hangouts and Slack, as well as document management tools like Dropbox and Google Drive
  • Workgroups for project management

Benefits of Collaborative CRM

Collaborative CRM helps you with the following benefits:

  • It improves your cross-team communication
  • Helps you integrate data for a better view of your customers
  • To support your customer 24X7 across their channels of choice
  • Data-driven interactions with customers
  • It has a comprehensive approach to managing the entire customer journey

Importance of CRM in Pandemic Affected Economy

CRM software are very advanced these days enabling companies to create new possibilities and client-centric approaches to enhance customer satisfaction. With its latest advancements CRM, CRM permits customization to fit specific needs of the business.

With CRM’s online capacities, stockpiling issues for immense databases would now be able to be settled, particularly for enormous enterprises. The Designers and programmers are currently offering offsite stockpiling of information and opening secure Internet modes for organizing CRM.

With the lock-down in full progress and WFH being order of the day, CRM offers the leverage to help businesses still function from remote locations. CRM have empowered users to work efficiently even from the confines of their homes.

Here is why CRM is important to business now more than ever

  1. Creating a bond with the existing customers ensures that you won’t have to work on getting them again like new traffic.
  2. Having a bond with customers increases the chance of making numerous purchases so a bulk of that first-time buyers is not limited to just that before perishing.
  3. When you make your customers feel welcome even after the purchase, they too start feeling some loyalty towards your brand.
  4. Since the brand image is already created before all this even begins, customers will have something to relate to or look up to when they make multiple purchases.
  5. When you maintain a strong bond letting the customers know they are valued, the customers become your friend.
  6. With prolonged good customer relationship management, customers feel obliged or happy to advocate your brand to others and that’s how your business rises to success and permanence.
Importance-of-CRM---CRM-Model
Importance of CRM

Still not getting it....

  1. CRM gives you an extensive data on your customer – there behavorial and purchase patterns
  2. It will help you analyze the data to understand what price category, what brands, what products, and what time of the year or day your customer is likely to shop
  3. CRM makes you service ready for your customer. It groups your customers according to their preferences – price, product and location, which helps you optimize your team to serve your customers better. 
  4. Since you know the trend and get a enhanced understanding of your customers your conversion goes up, so does customer retention.
  5. Besides, all data are just a click of a button away. No need to wait countless hours to get a specific data.
  6. The CRM system will help you enhance your reputation as you will have more satisfied customers.
  7. Gives your employees a through understanding of the customer and enables them for better servicing.
  8. Reduces your overall expenses.
  9. You can get your freedom from the daily repetitive works, which can now be set to automation.
  10. Coordination not just among your employees, but with your vendors improves.
  11. Increase in sell conversion and reduction in cost help you with a improved bottom-line.

What to Consider When you go for CRM Implementation

You must consider the following when planning to implement this CRM

  • Business strategy and processes − You should have a clear business strategies and process.

  • Business requirements − CRM systems range from domain specialty solutions that focus on solving a specific area such as sales force automation, marketing automation, services automation, partner management, etc., to complete enterprise management solutions.

  • Size of business − Small businesses require tools that are easy to learn and can handle a wide range of the most common tasks. Large businesses opt for applications that handle more complex tasks and thousands of users.

  • Customer base − The size of the customer base a business is required to handle.

  • Budget − A business needs to set a budget prior vendor selection. The budget allocated for CRM varies according to the degree of customization required.

  • Context − The context in which a business is functioning, e.g., B2B or B2C, determines which CRM the business should go for.

  • Sales channels − The sales channels a business is employing: Direct sale, channel sale such as distributors, or Direct to customers via retail. They matter while selecting the most suitable CRM software.

  • System integration − All the interfaces the business needs and the CRM vendor can support without requiring too much custom services effort.

  • Strength of partners − The partners must be able to provide a business with additional support, or help to implement the CRM successfully.

 

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