Customer Relationship Management Explained with Examples: Basics, Advantages, and CRM Tools

1. What is a customer relationship management system?
2. What are typical tasks of CRM systems?
3. For which companies are CRM systems suitable?
4. Why should companies use CRM systems?
5. What benefits do CRM systems offer?
6. 3 Examples of CRM measures
7. What are the variants of CRM use?
8. Which CRM tools are suitable?
9. Conclusion

CRM systems are important for maintaining and improving customer relationships. This article covers the basics of CRM systems, their typical tasks and benefits, their suitability for different types of companies, and the reasons for their use. It also presents customer relationship management examples with CRM measures, various usage variants, and an overview of CRM tools.

What is a customer relationship management system?

A CRM system is software for managing and analyzing customer data. The main goal of a CRM system is to improve customer relationships, increase customer loyalty, and thereby increase sales. It collects information about prospects and customers from various channels such as the company's website, phone calls, live chats, emails, and social networks. By centrally capturing this data, companies get a complete picture of their clientele. This improves the customer experience and enables customized solutions. Data management becomes more efficient and a deeper understanding of the needs and preferences of the customers is created.

Source: https://www.pipedrive.com/en/blog/what-is-crm

What are typical tasks of CRM systems?

Depending on the CRM system, the tasks can vary. Here is a brief overview of central tasks that a CRM system usually fulfills:

1. Central collection and management of lead and customer data:

CRM systems collect, store, and manage all relevant information, including contact details, purchase history, interaction records, and behavioral data.

2. Organization and tracking of communication:

CRM systems organize communication across various channels. They record details of emails, phone calls, meetings, and other interactions and ensure a structured and traceable communication history.

3. Data analysis and reporting:

CRM systems offer tools to analyze the collected data, recognize trends, and create detailed reports. These analyses are important to understand the needs of the target group and optimize customer relationships.

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For which companies are CRM systems suitable?

CRM systems are suitable for companies of any size and industry. In large companies, CRM systems make managing a wide customer base easier. They offer extensive features that facilitate efficient coordination of customer interactions across various departments. Medium-sized companies use CRM systems to improve their customer relationships and increase their market presence.

A CRM system helps them respond individually to the needs of their customers while optimizing their business processes. Even small businesses benefit from CRM systems as they allow them to optimally care for their customers despite limited resources and thus build a closer customer loyalty.

Do you want to learn more about B2B CRM? Then you can find here the Basics of B2B CRM.

Why should companies use CRM systems?

1. Make smart decisions: A CRM system allows companies to gain important insights from a wealth of data. They can better understand the preferences and behavior of their customers. With this information, companies are able to make strategic decisions based on precise, data-supported insights and not on guesses.

2. React quickly to changes: CRM systems enable companies to respond quickly to changes in the market and customer needs. With ongoing access to current customer information, companies can quickly adjust their offerings and strategies to seize market opportunities and respond appropriately to customer demands.

3. Save time and money: A CRM system relieves routine tasks and ensures good organization. This increase in efficiency leads to cost savings. In addition, employees can focus on tasks that make a larger contribution to company success.

4. Achieve more together: A CRM system supports collaboration within the company by creating a common information base for all departments. This common database facilitates cooperation and ensures that all team members can access the same current information.

5. Grow in the long term: A CRM system supports companies in strengthening existing customer relationships and recognizing new business opportunities. By conducting a detailed analysis of customer interactions and data, targeted measures for customer retention can be taken and cross and upselling potentials can be identified. This enables long-term and sustainable growth.

Still not sure if you need a CRM? Then find here whether you should start a CRM project.

What benefits do CRM systems offer?

CRM systems offer numerous benefits to businesses. They significantly contribute to improving various business processes.

Here are seven key benefits:

1. Increase in sales: CRM systems support the sales team throughout the entire process from lead acquisition to sales closing. They facilitate coordination and enable efficient management of customer relationships. This leads to a higher conversion rate of leads into paying customers.

2. Easier access to customer information: All important customer data is stored centrally in a database. This facilitates access and sharing of information in the team and ensures everyone is on the same page.

3. More customer satisfaction and loyalty: CRM systems support companies at every step of the customer journey. They enable consistent and personal communication from the initial contact to after-sales service. This leads to higher customer satisfaction and strengthens the long-term customer loyalty to the company.

4. More efficient collaboration: By sharing data, sales, marketing, customer service, and development can work more effectively together. This not only improves customer service but also increases efficiency throughout the entire company.

5. More time for important things: By automating routine tasks such as data entry and contact tracking, employees can focus on more important tasks that positively affect revenue.

6. Increase in competitiveness: The analysis of customer data by CRM systems helps to improve products and services. Companies can adjust their strategies in development, marketing, and customer service precisely to better meet customer desires.

7. Increased customer loyalty: By targeted tracking and personal customer service, CRM systems contribute to strengthening customer loyalty and increasing customer loyalty.

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3 Examples of CRM measures

1. Content Targeting

Content targeting uses CRM data to create and distribute targeted content. These contents are based on the interests and behavior of potential customers. The goal is to generate attention and arouse interest in products or services. Companies can increase awareness of their brand and position themselves as a trusted source of information by delivering relevant content such as blog articles or infographics based on the individual needs and interests of the respective target group.

2. Lead nurturing campaigns

Lead nurturing campaigns are based on creating email sequences that provide potential new customers with important information, customer testimonials, and comparative studies. The goal is to support prospects in their decision-making process. By regularly providing valuable information and addressing specific customer needs, prospects are effectively guided through the decision process and brought closer to the purchasing decision.

3. Personalized offers and discounts

The creation of personalized offers and discounts is based on a detailed analysis of the CRM data. The main objective of this measure is to support the purchasing decision of prospects through attractive, customized offers. Through personal contact, people feel valued. This can result in them being more inclined to buy something. A personal approach can positively influence both the conversion rate and customer loyalty.

What are the variants of CRM use?

CRM systems can be implemented in companies in various ways. The type of installation also decides on the functionality of the system. CRM systems can also be differentiated according to types.

1. Cloud-based CRM system

This variant is particularly popular with small and medium-sized companies because it provides a flexible and affordable solution. In a cloud-based CRM system, the data and the CRM software are stored on the external servers of a service provider and made available over the internet. This allows location-independent access to the system. The entry costs are usually low. However, companies are dependent on the reliability and security of the cloud provider.

2. On-premises CRM system

The CRM system is installed and managed directly on the company's internal servers. Large companies often prefer this variant as it provides full control over the data and the system. However, this variant requires a high initial investment in hardware and software as well as ongoing maintenance and security efforts. Compared to the cloud-based solution, flexibility may be limited. On the other hand, it provides a high level of data security as all information is managed internally.

3. Open source CRM system

In open-source systems, the source code is publicly accessible, enabling companies to make customizations and extensions at no additional cost. While it does offer high adaptability, it also requires corresponding technical knowledge in the company or external development resources. This type of CRM system is ideal for organizations that are looking for custom solutions and are willing to invest the necessary resources for development and maintenance.

In addition to the type of installation, CRM systems can also be categorized according to their main function, such as:

• Operational CRM: Focuses on the daily management of customer interactions and processes.
• Analytical CRM:: Focuses on analyzing customer data to gain deeper insights into customer behavior and market trends.
• Collaborative CRM: Aims at improving collaboration between different departments and external partners to optimize the overall customer experience.

Which CRM tools are suitable?

Hubspot Sales Hub

Bitrix24

Salesforce Sales Cloud

CentralStationCRM

Pipedrive

weclapp

TecArt CRM

BSI Customer Suite

On OMR-Reviews you can find more CRM Tools. If you really want to dive deep into the topic, take a look at the free OMR Reviews Briefing on the CRM Tools of Market Leaders.

Conclusion

An effective CRM system significantly contributes to customer satisfaction and the increase in competitiveness of a company. It improves customer communication and data management, which boosts efficiency and strengthens customer relationships. A good CRM system is thus an important tool for the success and growth of your company.