The third stage of HubSpot’s flywheel — Delight — underscores the importance of customer experience (CX). It’s not enough to sell people something or even to meet their needs and desires with your product or service.

Today’s consumers want enjoyable, memorable, positive experiences when interacting with your brand.

They want to be delighted.

And not just once. CX applies across all touchpoints, from interactions on social media to online purchases using a mobile phone to customer service issues.

Failing to meet client expectations can damage the business you put hard work and sweat into. Especially with today’s social media landscape, one bad review is all it takes for everyone to have second thoughts about buying a product.

Four out of five people would leave a brand they’ve been loyal to after three or fewer poor customer experiences. And 52% of people expect their questions answered within one hour of posting on a company’s digital channels.

Using CRM software can save your business from the wrath of indignant clients typing away bad reviews on their keyboards.

How?

The CRM’s central database gives sales, marketing and service access to the same info, enabling your company to provide the consistent interactions customers think they should receive. Real-time notifications and reminders allow salespeople to answer queries quickly so clients feel catered to.

Access to customer data also helps you cross-sell items a customer is likely interested in, thereby providing convenience. You can set rules in the system so that when someone buys a new iPhone, for example, they’ll receive an email about purchasing a phone case and protective screen as well.

With CRM, you also gain tools that allow you to personalize your interactions beyond emails with the contact’s first name. Social media integration provides insight into how your customers interact with your brand on different channels so you can respond accordingly. And you can use list segmentation for precise targeting, helping you put the right content in front of the right people.

Get a handle on customer Data

Spreadsheet tabs multiplying? Mountains of scribbled notes threatening to bust down the doors? Scads of data bouncing around without a purpose?

If any of those sound familiar, customer relationship management can provide tremendous value. These solutions use a central database for storing data-rich profiles. Everything from contact info to the likelihood of customers buying products is viewable from a single screen.

Relying on spreadsheets can lead to inaccurate and duplicated data, slowing down how sales reps share information and pursue leads.

CRMs can counter this by providing information updates as contacts progress through funnels, giving a real-time view. Some solutions also pull in data from social media sites, such as the person’s connections or how they’ve interacted with your brand online.

Some CRM platforms offer automatic data collection and storage capabilities, further freeing up sales reps’ time and allowing them to focus on high-quality leads.

Go after the best opportunities

Knowing the health of your pipeline and which leads you should spend time pursuing is critical.

With strong customer relationship management, you get insight into those areas. That way, your team doesn’t waste time chasing the wrong leads, and you always know where opportunities stand.

Many systems include a broad toolset that helps direct your efforts:

• Lead Scoring: Identify which prospects are hot — and which aren’t.
• Data Intelligence Capabilities: Model a contact’s revenue potential, reveal which regions are the most profitable and more.
• Segmentation: Group leads based on qualifying criteria, such as the products they’re interested in or what demographic they fall into.
• Visual Pipelines: View what stage every lead is at and easily transition them through the funnel.
• AI in Lead Management: Get the next best steps to qualify leads, schedule tasks and make key predictions.

Cut down on manual work

Automation is one of the most helpful features CRM offers.

Tackling customer relationship management activities without a dedicated solution is a lot of work. Manually entering each new contact’s info. Scribbling notes to keep track of details. Setting reminders to send that follow-up email.

That workload isn’t scalable. Even if you have a team to help, doing things by hand isn’t efficient.

CRM solves that problem. They can update data when a change happens in the system, automatically pull data to display in charts and graphs, assign leads to different sales reps, and a host of other things.

Thanks to marketing automation features, you can build email sequences and define when to send each email based on actions taken by the lead or customer.

• Send a “thank you” email after a purchase
• Trigger an email nurture campaign after a lead fills out a form
• Deliver a monthly newsletter to subscribers of your members’ program

Track and manage leads efficiently

Effective lead management is key to boosting your bottom line and converting quality leads.

Besides pointing sales reps toward the best deals, CRMs can notify your sales team when a lead needs attention lest they become a victim of the dreaded black hole known as “churn.” Real-time notifications, alerts, reminders and mobile apps enable sales reps to resolve lead queries quickly and efficiently.

With a consolidated database, sales teams can access relevant lead information anytime, helping them personalize conversations. Lead scoring lets you prioritize communication and follow up with clients who are likely to buy from you.

CRMs provide valuable sales insights and help analyze patterns. For example, if you determine that customers of certain demographics are more likely to purchase your product, you can target your efforts to maximize profitability.

Robust CRM software also comes with a host of analytics tools. Dashboards, charts, graphs and reports visualize a variety of metrics — giving you a comprehensive look under the hood of your business:

• Email campaign performance (number of opens, click-through rate, etc.)
• Deals closed per sales rep
• Sales by region, vertical, product, etc.
• Leads most likely to churn
• Overall lead conversion rate
• Average deal size
• Forecast revenue

That list is only the beginning of what you can drill into. Such deep insights help you make smarter decisions and optimize for the most profitable outcome.

Optimize Team Performance

Ever bought discounted clothes and later realized the quality was what Gen Zers call ‘dog water’? Now think of that pair of jeans that’s consistently been your go-to for years (or even decades). This is because more doesn’t always mean better.

Similarly, when it comes to team performance, spending lots of hours on something doesn’t necessarily mean it’s good quality work.

CRM platforms help managers optimize business processes, enabling teams to put forth work that actually helps. The system automatically monitors sales reps’ tasks and how well they’re performing.

You can set sales objectives, track individual and team goals, and analyze where you’re falling short. CRM platforms offer gamification tools that reward top sales performers, encouraging healthy competition and participation from the whole team.

Sales agents can collaborate with each other anywhere, anytime, on any device. This helps your business communicate effectively and avoid the risk of losing customers.

You can also integrate CRMs with various business apps and systems, further strengthening collaboration. Salespeople can save time by managing all their tasks directly from the system instead of switching between platforms.

FAQs: The Scoop on CRM

What does CRM stand for?

People throw the term “CRM” around a lot. But what does it mean?

CRM refers to customer relationship management, which describes the process used to manage every aspect of a company’s communication with prospects, leads and customers. It helps businesses generate and nurture leads, close more deals and retain customers with the ultimate goal of increasing customer lifetime value (CLV) and driving revenue.

The term CRM can refer to both a concept and technology. As a concept, CRM means strategies to manage customer relationships. However, usually, when people say ‘CRM,’ they’re talking about the technology, i.e., digital platforms that handle customer data, campaigns and deals.

What is CRM software?

Customer relationship management (CRM) software is a system that helps manage customer relationships, track communication, analyze client trends and monitor performance. It acts as a database for prospect, lead and customer information.

To illustrate, think of managing your customer relationships as your destination and the software as a car that takes you there.

Sometimes, people confuse CRM platforms with ERP, CX and marketing automation solutions. ERP systems primarily focus on financial data, while marketing automation revolves around marketing campaigns and customer segmentation. CX solutions, on the other hand, manage customer perception and enable you to create positive brand experiences.

While CRM can help with many of those things, its central mission is to enable businesses to manage and interact with consumers.

Why should I care about CRM?

CRM is big, and it’s only expected to grow in importance and size. The global CRM market was valued at $64.41 billion in 2022 and is predicted to reach $157.53 billion by 2030.

But there are reasons customer relationship management matters apart from the impressive stats and expert opinions.

Back to the car analogy, customer relationship management is essential in reaching your destination faster and more efficiently — yours might be increased growth, doubled sales or better customer service. No matter your goal, not having a CRM is the equivalent of traveling cross-country by stagecoach when everyone around you is using a car.

Selling is hard today. People want experiences, not just products or services. They want to interact with your company on their terms, using different devices and channels. And data floods in from social media, websites and dozens of other sources.

CRMs provide the tools you need to keep up with customer demands, put your data to work and improve your bottom line.

How does CRM software work?

CRMs handle dozens of activities, with specific tools that aid each. But those all surround and support three main purposes:

• Attract prospects and convert them into leads
• Nurture leads until they become customers
• Keep those customers happy and coming back for more

Let’s walk through the marketing, sales and customer service phases to see the purpose of a CRM platform in a company.

Marketing

Marketing acts as the entry point, running campaigns and conducting other activities to generate leads. Marketing automation and email capabilities, such as customer targeting and triggered emails, play a central role at this stage.

Customer relationship management also provides contact management and lead management. Contact management lets you store all a lead’s info for easy access. Lead management comes with the following capabilities to convert prospects and monitor their progress through the funnel:

• Lead generation
• Web forms
• Pipeline tracking
• Lead follow-up
• Lead capture
• Lead distribution

The goal of this stage is to nurture leads to the point where they’re qualified for sales to take over. Automation and a 360-degree customer view make the handoff process more streamlined and less prone to error than it used to be.

CRM platforms help marketing teams by forecasting sales and providing actionable sales insights. They can segment leads into different categories, allowing you to personalize communication.

Marketing also steps back in post-purchase since many customers are candidates for repeat buying. A CRM helps send new offers, encourage upgrades and support membership programs to increase customer retention.

Sales

Once a lead passes to the sales team, they receive all the contact info and history. Here, CRM solutions use opportunity management, win/loss analysis, quote management and other tools to drive more deals.

Automations take repetitive tasks off the plate of the sales team, and cloud-based CRMs have mobile apps that give reps on-the-go access.

At this point, leads will either convert to customers, drop out of the cycle altogether or revert to marketing for more nurturing. No matter what happens, the CRM tracks everything.

Service

The lead has become a customer. Mission accomplished!

Well, not quite. Customer relationship management supports the entire journey a customer has with your company. Given that retaining customers provides a far higher ROI than constantly losing them and going after new ones, giving them every reason to stick around is necessary.

This is where the service team takes the stage to support customers so they don’t jump ship when something goes sideways. This includes responding to issues and answering questions.

You’ll find CRM systems that come with capabilities for building knowledge bases, chatbots, self-service portals and help centers or integrating your current help desk solution. Automation and real-time notifications also help service teams resolve queries quickly.

And since a customer’s profile contains all their past interactions and information, it’s easy for service agents to get the full picture so they can provide a more personalized, relevant experience.

What are the three types of CRM?

CRMs are typically grouped into three main types: operational, analytical and collaborative.

Operational: It helps streamline a company’s sales, marketing and service activities. This is where you’ll find applications for sales force automation (SFA), marketing automation and service automation. It gives a high-level overview of customer lifecycles and keeps customer-facing teams more organized and efficient.

Analytical: This CRM type lets you probe your data using methods like data warehousing and data mining. Equipped with robust analytical features, these systems help put your data to work by pinpointing trends, extracting insights, and painting a more accurate picture of who your customers are and what they want. They’re suitable for companies that have a lot of data and need assistance optimizing it.

Collaborative: These platforms break down silos across teams so they can collaborate more effectively. For example, when marketing passes a qualified lead off to sales, the sales rep can view the lead’s profile so they’re not walking into their interactions blind. They’re good for businesses with multiple locations and communication channels and allow teams to be on the same page.

For more information, check out our article, Types of CRM Software, which covers what each type of CRM system offers and how it can uniquely benefit a business.

Who uses CRM?

You may think that only large enterprises need CRM. But, CRMs are helpful even for companies with only a few employees. There are even solutions specifically for nonprofits.

No matter what industry or company size you look at, customer relationship management has become a basic cornerstone of building a successful business.

As we just looked at, sales, marketing and customer service teams will mainly use a CRM solution.

What are the things that a CRM can’t help with?

CRMs can help manage a myriad of business processes efficiently. However, these systems can’t assist if:

• You work on backend operations like warehouse and shipping.
• People work deals outside the system. CRMs are only as effective as the data you enter in them, and a lack of consistent data can lead to lesser-quality sales insights.
• You’re looking for a system that fixes all business operations. Many CRMs focus on certain sales processes. To manage other operations like ERP or BI, you’ll need a specialized CRM that provides the necessary integrations.

What are some examples of CRMs?

There are various CRM solutions available that offer dynamic functionalities like lead tracking, marketing automation, contact management and lead scoring. Salesforce Sales Cloud, HubSpot Sales, Dynamics 365 for Sales and SAP Sales Cloud are some of the top CRM platforms in the market.

How much do CRMs cost?

This depends entirely on the level of functionality you need. If you’re running a small operation, an open-source CRM or free version of a premium product may be adequate.

If you need more capabilities, there is a range of price options that can cost anywhere from hundreds to thousands of dollars per year. A few things to keep in mind:

• The typical pay structure for CRMs is subscription-based, where you pay for each user either per month or annually. If one user costs $100, then five users would cost $500. The exception is on-premise systems, like those from SAP or Oracle, which have a licensing model where you make a one-time purchase and own the right to use the software.
• Vendors almost always have different pricing tiers that add more capabilities the higher you go. So if you want an advanced feature — say, task automation — it’ll cost more.
• Look out for hidden costs like maintenance, training, implementation and data migration fees. You may also need to pay more for extra contacts or storage.

Should I consider a free CRM?

It depends on what you’re looking for. Free CRMs let you test and see if a system is a good fit for you. They’re ideal for small businesses with not many unique needs. However, free CRMs come with limited functionalities, don’t often guarantee data security and allow only a limited set of users to access the software.

Should I use cloud or on-premise hosting?

This used to be a raging debate. But recently, it’s become less of a central factor as cloud CRM has become the preferred choice.

And the trend is expected to continue. The global cloud CRM market is anticipated to rise at a considerable rate between 2022 and 2030.

Our own research indicates a similar move toward the cloud. In speaking with more than 500 companies looking for a CRM last year, we found that 63% were solely looking for cloud-based applications, while another 35% were open to the idea.

Cloud-based CRM brings a world of benefits to a business. With your software hosted in the cloud, there’s no need to worry about maintenance, security updates and other upkeep — the vendor handles it all.

Another key advantage is the flexibility cloud solutions offer. All users need is an internet connection, letting sales reps and others use the system from their home office, the airport and anywhere else.

That’s not to say that on-premise deployment is ready to accept its place six feet under. It’s still a viable choice for some organizations. When looking at options for your company, keep your requirements at the forefront when determining which deployment method makes the most sense.

However, the cloud is certainly casting an ever-growing shadow across the CRM industry.

How do I choose CRM software?

Choosing software can be a complicated, time-consuming process. And with customer relationship management, there are literally thousands of solutions available to pick from. We’re here to make that journey more manageable and less stressful.

Whether you’re looking for a new system or your first CRM, our free comparison report is a great place to start. It’ll give you a rundown of the top products available so you can take your search in the right direction from the get-go.

Have a question about which software vendor is right for you? We’d love to help! Reach out to our team for individualized recommendations by messaging [email protected] or via phone at 855-850-3850.

We’ve also put together a number of CRM resources for you to peruse:

• CRM Requirements Checklist and Evaluation Template Document
• Big CRM Software Comparison Chart and Matrix
• Free CRM RFP Template and Step-by-Step Guide When Requesting a Proposal
• Best B2B vs. B2C CRM Software and the Difference Between Them
• Top 36 CRM Features and Functionality List

Good luck on your CRM journey!