What Is CRM? A Guide to CRM Software Types, Benefits, and Features (2023) - Shopify

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CRM helps businesses save time and improve their relationships with customers. Learn how they can help you meet your business goals.

Building personal relationships with your customers is easy when your client base is small. You might know their goals, purchase histories, and perhaps even more personal details like their food allergies or holiday plans.

However, as your business expands, things get more complicated. How do you ensure every client receives the same high standard of care? How do you provide personalized, relevant interactions when your customers number in the thousands?

Customer relationship management (CRM) software can help. CRM reduces your administrative burden and helps to improve customer experience—even as your business grows.

A customer relationship management system is a platform designed to help businesses manage and improve relationships with customers and potential customers.

CRM collects and stores customer information, activity, and communications in a centralized and accessible database, replacing the spreadsheets, documents, and apps businesses often use to track customer data. You can use a CRM to plan outreach, analyze performance, manage customer interactions, and streamline billing and customer support processes.

CRM provides two major benefits: increased internal efficiency (which can decrease business costs) and improved relationships with customers (which can increase revenue). In other words, implementing a CRM solution can help you widen your profit margins.

CRM tools can save business owners a lot of time, reducing administrative burdens and streamlining workflows for sales teams, marketing teams, and customer service teams. The efficiency benefits of CRM include:

CRM software can improve customer experience, making it easier to attract new customers and improving your customer retention rate. Here are five ways a CRM can improve your customer relationships:

There are four main types of CRM systems: operational, analytical, collaborative, and strategic. Each is designed to meet a specific business goal. Many businesses use multiple CRM systems or develop a custom CRM solution that combines elements of each system. Here’s how these four CRM systems differ:

Operational CRM are designed to help execute sales, marketing, and customer service functions. They help streamline and manage all the ways your company interacts with customers.

The main goal of this type of operational CRM is improving customer acquisition and retention: they help generate new leads, nurture them, convert them into customers, and retain them through ongoing marketing communications and high-quality customer service.

Businesses of all sizes use operational CRM systems and frequently enable time-saving CRM automations, including:

Whereas an operational CRM system helps get leads into your sales funnel, an analytical CRM system enables you to understand how your prospects are moving through your sales funnel.

Analytical CRM systems capture, store, and analyze customer data to provide insights into how customers interact with your business, allowing you to assess the effectiveness of marketing, sales, and customer service efforts and adjust your strategy accordingly. You might run a report on six recent marketing campaigns, analyze the data to gauge their efficacy, and model future campaigns on the winning example’s tactics.

Analytical CRM can also run performance reports, such as sales history and customer service satisfaction scores, allowing you to leverage the strengths of high-performing team members and identify areas for employee development.

Analytical CRM are used by businesses of all sizes and are particularly valuable for those focused on improving their customer relationship management practices.

In a large business, sales, marketing, and customer support teams frequently collaborate on client accounts. The main goal of a collaborative CRM is to improve customer experience and streamline business processes by facilitating communication between departments.

Collaborative CRM are particularly popular with large businesses—companies with large customer bases in which multiple people service individual client accounts. Here’s an example of how communication between departments might play out over a customer life cycle:

Strategic CRM are sometimes lumped in with collaborative CRM and provide many of the same features. The difference is that while collaborative CRM focuses on immediate improvements, strategic CRM concentrates on long-term customer engagement. Their main goal is to support customer retention and increase customer loyalty.

Strategic CRM collects information about customer needs and priorities to provide value to your client base. For example, they might tell you which communications channels specific customers prefer to use. They’re handy for businesses requiring long-term customer relationship management, such as an IT company that provides clients with ongoing data management services.

Do you want to streamline communications between your sales and marketing teams? Improve customer retention? Evaluate a potential product launch? Answering these questions before choosing a CRM system helps ensure that it will meet your needs.

Once you’ve identified your goals, choose a CRM type—operational, analytical, collaborative, or strategic—research CRM providers, and select a vendor.

Download the application, grant access to appropriate employees or company members, import company and client data into the CRM database, and integrate your CRM with your existing tools and platforms.

With your CRM set up, use its features to execute tactics, like an automated email marketing campaign or an improved customer service program.

Use your CRM to produce reports, analyze data, and adjust your tactics accordingly.

A customer relationship management (CRM) system is a software application to help business owners build and maintain customer relationships. HubSpot is an example of a CRM. HubSpot CRM supports sales, marketing, customer service, and operations functions.

CRM is used to improve customer relationships. They provide a secure, organized, low-touch storage system for customer information and help businesses efficiently provide personalized, relevant communications to their customers.

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