Customers are the backbone of any business. They must be the center of all your marketing efforts. Understanding customer needs, solving their problems, and providing them with exceptional customer experience are essential elements of business growth. This is why businesses often rely on CRM to manage relationships with their customers. What does CRM stand for in marketing and how crucial it is for the success of your business are the key questions you must ask yourself before you invest money in a CRM tool.
What Does CRM Stand for in Marketing?
CRM stands for customer relationship management. It is a software to manage relationships with your customers. It records and manages all the data about your customers and helps you get involved in meaningful interactions with your customers.
A CRM tool does a lot of things such as:
- Customer profiling
- Lead scoring
- Lead management
- Email marketing integration
Customer relationship management software collects and manages customer data in a single place. It acts as a centralized hub for customer data. This eventually leads to improved customer experience, personalized marketing campaigns, and more.
This is the reason CRM is the biggest software market in the world expected to reach $80 billion in revenue by 2025:
You can’t ignore CRM and its importance if you want to grow your business and improve marketing effectiveness.
How Does CRM Work
CRM is much more than a piece of software. It integrates all the major departments in your business and lets you manage all types of customer interactions and data from a single dashboard. It works closely with marketing, sales, customer feedback, and customer support:
Here is how CRM works:
1. Customer Data Centralization
Here is the thing: Your business collects a lot of customer data. All the departments have customer data ranging from marketing to sales to customer service to finance and more.
Your data is wasted in the absence of a CRM tool. It creates data silos. Each department has its own customer data and it uses it the way it likes.
CRM integrates all customer data. And makes it available to all the departments:
Everyone has access to the CRM making data useful and meaningful. For example, the marketing team will know a customer complaint with the customer support team and can refer to it when offering an upsell. Or the marketing team could wait for the complaint to get resolved and then pitch an upsell.
2. Customer Centricity
When the data is centralized, your business becomes customer-centric. The customer is at the center of everything you do:
Why do you want to focus on customer-centricity?
Because customer-centric businesses are 60% more profitable than their counterparts. And this makes CRM your best tool to focus on your customers and their needs.
So, when all the customer data is centralized and available 24/7 to everyone, your business will automatically have a customer-centric approach.
Data centralization and customer-centricity lead to automation. In fact, CRM software can’t work alone. It has to be integrated and work with all the tools that you use such as lead generation tool, email marketing software, customer support tool, marketing campaigns, and more:
It also integrates all the key tools that you are using to collect customer data across different departments leading to several benefits such as automating sales funnel, lead scoring, upselling and cross-selling, and more:
Types of CRM
When it comes to using CRM software, you have different types of software to choose from. There are three main types of CRM:
- Operational CRM
- Analytical CRM
- Collaborative CRM.
1. Operational CRM
Operational CRM focuses on simplifying and automating key business processes. It automates your business operations that involve customers such as sales, marketing, and service. The process begins by generating leads, converting leads into customers, retaining customers, and offering necessary services.
It covers typical lead generation and lead nurturing process. How is it achieved?
Operational CRM automates three key functions: Marketing, sales, and customer service.
Marketing automation includes email campaigns, lead generation, content distribution, and more. Sales automation covers lead scoring, lead nurturing, autoresponders, sales tracking, etc. Customer service automation includes customer support, ticketing, etc.
Examples of operational CRM tools are:
2. Analytical CRM
It is a CRM tool focused on data collection and analysis to provide you better insights. It helps you with decision-making. One of the most important uses of analytical CRM is segmentation. You need customer data to create segments for targeting.
The main features of an analytical CRM tool are:
- Creating buyer personas
- Data mining
- Online analytical processing.
Zoho Analytics is a perfect example of an analytical CRM tool that provides you with in-depth analysis and reports for decision-making.
3. Collaborative CRM
This is a type of CRM that promotes collaboration across different teams, functions, and organizations. It has two main components:
- Interaction management tracks every single customer interaction whether it is an email click or a social media post like.
- Channel management is focused on communication channels and finds the best channel to interact with your customers.
An additional component is relationship management that involves managing individual customer relationships across all the channels.
Copper is a collaborative CRM tool that is all about managing relationships with your customers and business partners.
What is the Right CRM tool for Your Business?
Now that you know what does CRM stand for in marketing, what’s the right CRM for your business?
Operational CRM tools are best for integrating and automating marketing, sales, and customer service. Analytical CRM is ideal for data-focused companies that want to collect data for better decision-making. Collaborative CRM is for businesses that want to manage customer interaction and channel management.
Fortunately, most of the latest CRM software available in the market today combines features of all three types. Pick any CRM tool and you’ll get all the features including operational, analytical, and collaboration.
You get everything in a single tool.
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