CRM: WHAT IS IT AND HOW DOES IT WORK?

The term CRM stands for customer relationship management. It refers to all the strategies, techniques, tools, and technologies companies use to manage and analyze customer interactions in order to build stronger, more profitable customer relationships over time.

CRM software centralizes customer data across the various touchpoints and channels through which companies engage their customers. That spans email, phone calls, forms on the company website, e-commerce transactions, social media, and in-person meetings. Leading CRM systems track and organize data from these interactions while applying analytics to surface actionable insights.

For example, dashboards may highlight the most promising sales prospects based on behaviors and purchasing history, the preferred communication channels for specific customer segments, or common reasons for customer service inquiries and cancellations. Leading metrics measured relate to customer acquisition, customer retention and lifetime value.

CRM data assists the marketing, sales and service departments most directly. Marketing teams can better target specific campaigns and messages to relevant segments. Sales teams get notified of new leads that meet defined criteria while accessing historic deal and contact data to improve win rates. Service teams reduce issue resolution times by quickly reviewing past interactions with each customer.

Keep in mind though that CRM is a company-wide strategy regarding how an organization should acquire, grow and retain customers for a maximized return. While technology enables CRM, achieving high-impact CRM requires company cultures, workflows and incentives aligned across departments to deliver consistent and personalized customer experiences.

The core premise of CRM is that fostering strong relationships across the entire customer lifecycle boosts revenues. The costs of acquiring new customers far exceed retaining and growing existing ones. The best CRM technology paired with organizational alignment arms companies to attract and nurture loyal customers. Companies can then truly transform one-off transactions into lifelong partnerships.

Modern solutions also incorporate predictive analytics, marketing automation, employee performance metrics, APIs for data integration with other systems and flexible delivery models including on-premises and cloud-based. The global CRM software market exceeds over $120 billion in value today and continues rapid expansion as data-driven customer engagement becomes integral to business success.