What Is a CRM System?

Everything you need to know about CRM systems and how to use them to grow your business.

What is a CRM system?

Relationships are the foundation of every successful business. But maintaining healthy and profitable customer relationships can be complex. This principle is especially true for small businesses with fewer employees and limited resources.

Thankfully, small businesses can leverage the power of a customer relationship management system (also known as a CRM) to overcome these challenges. The most common CRM systems are software tools, but there are others.

Companies that use a customer relationship management solution gain several advantages. Here are just a few examples of how small business CRM systems can increase ROI on marketing and sales efforts:

  • Businesses can maintain and filter a wealth of customer data. CRM data provides valuable insights that can help organizations manage existing customers more efficiently. Companies that leverage customer data (such as trends in buying behavior) convert more sales opportunities and extend the customer lifecycle.
  • A CRM system makes it much easier to record customer interactions with the company. Conversations between customers and service representatives are valuable information that can help the company create a strategy to improve its overall brand experience.
  • A CRM can optimize marketing efficiency. For example, sales teams can use a CRM system to track results from marketing campaigns. As a result, sales reps can increase ROI on marketing campaigns, shorten the sales cycle, and reduce customer acquisition costs.
  • Finally, small businesses can use CRM systems to set growth goals with actionable steps to achieve them.

There are several other advantages of implementing a CRM. We will explore some of them in detail throughout this post. But first, let's review the most common types of CRM tools and how they can help small businesses make more profit while reducing expenses.

Customer relationship management (CRM) is a business development process designed to cultivate sales leads and manage existing customer interactions.

Types of CRM Systems

A CRM system is a tool (usually software) designed to improve marketing and sales business processes. CRMs have diverse uses. As a result, there is often some confusion about using these tools to optimize a company's processes such as marketing campaigns and customer service.

CRMs are most often associated with contact management and sales force automation. But they can do much more. Modern CRM solutions enable businesses to manage customer engagement across multiple digital channels, such as websites, social media platforms, and email. In addition, CRMs make it possible to track and measure activity on non-digital marketing channels. Phone calls and direct mail campaigns are examples.

Common Types of CRM Systems

In this section, we will summarize the most popular uses for CRM software and how they can help your business improve customer relationship management.

Operational CRM Systems

Companies use operational CRM systems to coordinate the activities of various internal and external business teams. Coordination among departments results in clear communication and organizational efficiency. In addition, business leadership can use this information to determine how each department performs and how to improve business processes.

Businesses can increase overall organizational productivity by using the automation features of operational CRM systems to manage mundane or time-consuming tasks. As a result, marketing, sales, and customer service reps can spend more time doing what they do best.

Customer service representatives can access CRM data provided by the sales team and incorporate it into their day-to-day customer interactions. As a result, agents can provide personalized service, which builds stronger customer relationships. Therefore, existing customers are more likely to remain loyal and make repeat purchases.

An operational CRM can also be used as a ticketing system. This function benefits companies that use website chatbots as a means of customer contact. For example, when a customer sends a message via the company's website chatbot, a ticket is created. The ticket is then forwarded to the customer service team, and an automated email notifies the customer that their ticket has been received. Once the issue is resolved, the CRM automatically updates the customer with another email.

Collaborative CRM Systems

A company can use a collaborative CRM system to develop and improve a company's customer experience. The customer experience (also called the customer journey) is the path to purchase, from awareness to conversion. This experience evolves over a series of customer interactions called touchpoints. Each touchpoint with the customer is positive or negative. The company's website, email campaigns, and sales calls are examples of touchpoints. Every touchpoint should be positive for the customer. The more positive interactions a potential customer has with a business, the more likely they are to buy.

A collaborative CRM system also provides a big-picture perspective of the buyer's path to purchase. This perspective gives business teams insight into the customer experience's strengths and weaknesses. As a result, marketing, sales, and service teams can identify touchpoint gaps that may be hurting the company's sales efforts.

The collaborative capabilities of a CRM enable your business to answer questions such as:

  • How could the company resolve technical problems faster?
  • Is it possible to shorten the sales cycle?
  • Are there opportunities for upsells?
  • What are the most glaring issues that prevent sales?

Analytical CRM Systems

Analytical CRM systems allow businesses to collect and review customer behavioral data. This information makes it easier for a company to understand its customer's needs and desires, purchasing patterns, and the number of touchpoints currently required to make each sale.

Examples of behavioral data are:

  • Customer feedback
  • Customer interests
  • Sales history
  • Buying behaviors (i.e., customer lifecycle)
  • Responses and conversion rates for marketing campaigns

Using a CRM to analyze customer information enables a company to have productive conversations among business teams to improve:

  • Contact management and customer service automation processes
  • Sales management and sales productivity
  • Geographic marketing campaigns
  • Sales force automation

The detailed nature of CRM data it easier for companies to diagnose costly issues and problems that may occur in the buyer's path to purchase. Let's look at a simple example to illustrate. Your business' CRM data may show that 30% of customers searched for a specific product during the summer months. However, the data also reveals that 2 in 3 shoppers clicked on the product description but did not buy it. This trend may indicate that the product listing needs to be improved to increase sales conversions. To mitigate the issue, you could send emails to these non-buyers with a discount coupon, which may drive additional sales.

Marketing CRM Systems

CRMs are best known for their marketing support features. Marketing CRM software can be used to manage and monitor promotional campaigns and to track each sales lead relationship.

Your team can use marketing CRM data to discover how sales leads respond to paid ads and organic marketing campaigns. For example, find out how many people responded to a paid ad on search engines versus social media advertising. This type of information is valuable because it allows your team to adjust marketing campaigns that are not effective and allocate more resources to those that are.

A marketing CRM also provides customer insights that show which product offers yield the most revenue. Over time, companies can use this information to adjust audience targeting and increase profitability. For instance, sales leads can also be categorized to reflect where they are in the sales cycle and their profit potential.

Marketing automation also reduces missed opportunities to close sales. As on example, a CRM can be programmed to send email reminders to leads that have indicated interest in a product but have not yet purchased it. Maintaining contact with these potential buyers is one of the most efficient ways to increase sales. The marketing automation features of a CRM make this process much easier.

Managing Customer Relationships with Wintec Group

A robust CRM system is the key to developing better relationships with buyers. Here are just a few examples of how your business can grow revenue with the right CRM:

  • Stop wasting time on repetitive, non-productive administration and marketing tasks.
  • Create a consistent, reliable lead generation pipeline.
  • Personalize and strengthen ties to existing and potential customers.
  • Analyze data to set growth goals, improve the customer experience, and develop new revenue streams.
  • Increase customer satisfaction by addressing their requests faster.
  • Shorten the sales cycle and increase customer lifetime value.

And much more.

The customer relationship management consultants at Wintec Group know that ineffective sales processes result in lost opportunities. We also know that your business cannot afford to waste its most valuable resources—time and money.

We are an elite Maximizer CRM certified partner, consistently achieving Partner of the Year during our company's history.

For over 25 years, we have helped clients in the United States, Canada, and beyond establish an easy, reproducible selling process to convert leads and close sales.

We can help you do that too.