Figures show that increasing customer retention by as little as 5% can boost profits by a huge 95%. In this article, we give you the low-down on the tool that can help you get there, the CRM.
CRM stands for customer relationship management. In other words, trying to create lasting relationships with your customers. So, how do we do it ? Everyone wants to feel special, like they’re your only customer and top priority. To do this, we need to personalize the customer experience. We need to know everything there is to know about them and their dealings with your company, even if you weren’t involved directly.
Who from the company spoke to them last, and when did the call take place? What did they talk about? That’s right, Adam from Sales needs to know about Client A’s conversation last Monday with Sarah from Customer Service. You saw their latest post on Twitter ? So, tell them ! Read about them in the news last month ? Bring it up ! Ask about their family, their kids, their vacation. Of course, the more customers you get, the harder it will be to keep track of all this, so jot down a few notes in your CRM after every interaction. Exchanges like this will show your client that you care, that you remembered them. And don’t forget, we’re talking about your existing customers here too, not just potential new customers.
1- What is a CRM ?
A CRM is primarily a software tool for managing client relationships, as well as a database with functions for improving your client prospecting, client retention, and customer service.
2- Who can use a CRM ?
Anyone in the business can use a CRM, from sales and customer service to business development and marketing, and even HR and recruitment.
Used properly, a CRM can help you :
- Boost revenue and cut costs;
- Optimize employee efficiency;
- Get to know your clients better.
3- How to Boost Revenue and Cut Costs ?
There are several ways in which a CRM can increase efficiency and reduce costs. Let’s start with the most important, the contacts database (like an address book, but better). The client contacts database streamlines contact management in the business to one single store where all contact information and interactions are logged (active customers, dormant customers, etc.).
How effective the CRM is can be measured by the increase in the number of contacts in the company database, with the revenue made from these new contacts compared with the revenue from the same number of contacts from the previous year. The reduction in the number of dormant customers and the increase in the value of the average shopping basket can also be used as indicators of success. You can manage your client base more efficiently by putting some simple prospecting and retention channels in place (automatic email scheduling, calls, letters, mailing autoresponders).
4- How can we calculate the increase in revenue and reduction in costs ?
One of the ways you can calculate the Return on Investment (ROI) of your CRM is by comparing operations carried out before and after the CRM was introduced.
1- Cut Client Acquisition Costs
You can actually analyze the cost of acquiring each client from the ROI of each marketing action, allowing you to refine your marketing initiatives and use the marketing budget as efficiently as possible.
2- Increase Revenue per Client
Outlining and analyzing profits made by one company and those of their competitors allows you to introduce a policy aiming to increase the value and quantity of orders from a client by using reminders for key dates (for instance, when contracts with your competitors are coming to an end), and targeted pitches with competing offers (take-over bids…), making it easy to offer new services to existing clients.
The CRM allows you to offer new services through improved monitoring of client accounts and the integration of new technology.
3- Optimize Employee Performance and Efficiency
By automating sales processes and structuring activity, employee performance can be compared from one year to the next, meaning you can address the situation as needed.
4- Streamline Processes
A CRM can be attractive because it allows you to analyze, and as a result streamline and simplify a company’s existing processes. For example, simplifying the document validation process which can now be done electronically, saving you time. A CRM can make it easier for you to make decisions, help you when using formulas, and eliminate outdated procedures. This will all help the company to become more agile.
5- Manage Your Work More Efficiently
A CRM can actually help you analyze what employees are doing more closely, giving you concrete information on their work. This makes it easier to directly influence their work and performance, for example, by defining a target number of visits or calls to precise segments of the client base, or even by agreeing a minimum of time to be spent on prospecting with your sales representatives.
6- Reduce Administrative Tasks
A CRM will help reduce administrative burden by automating tasks such as producing activity reports, managing subscriptions to the newsletter, calculating sales forecasts, and setting up reminders and alerts.
7- Reduce Errors and Entry Time
New information is recorded on the CRM just once by a single person, and employees across the entire company can use and benefit from this data (sales, marketing, technical support, etc.). Additionally, importing the data directly (eg. name, address and email can be automatically lifted from your inbox) saves time and room for error by avoiding manual entry.
The CRM helps employees to be more responsive by sending them automatic reminders or allowing them to browse info on the client at any time to refresh their memory. This can, for example, be the difference between a sales representative getting in touch before or after the client has renewed their annual contract with a competing supplier.
The goal is of course to retain the best clients by making them feel understood, important, and valued. The CRM allows you to place clients at the heart of the company, keeping them satisfied in order to retain them and ultimately lead them to purchase more from you.
To Summarize …
To recap, a CRM can improve many aspects of your business, from profitability to productivity. By storing contact information for customers and prospects in one centralized location, the team can effectively manage marketing campaigns, identify sales opportunities, handle sales and contracts, and record issues. Additionally, a CRM can provide analytics, and help automate recurrent processes, with visibility and easy access to real-time data.
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