As a small business owner, you might find it challenging to build deeper relationships with customers. This feeling is fairly common among entrepreneurs, and it becomes even more pervasive as your business grows. Once you create a website and develop your marketing strategy, you’ll find that an increasing number of people are interested in your products or services. Suddenly, you’re hit with such a wide range of customers that you can no longer keep track of them with a simple spreadsheet or email list, much less recognize their names.
This is where CRM systems come into play. Specifically designed to help you manage and get to know your customers, these digital tools help you attract and retain clients while supporting your company’s growth. In this article, you’ll learn what a CRM is, what its benefits are, and which kind of CRM tool is best for your business.
What is a CRM and how does it work?
CRM stands for customer relationship management. Traditionally, this refers to an approach to managing relationships with customers that uses data analysis about customer preferences and behavior to provide deeper information about buyers and leads. However, as this approach has become more widespread, the acronym CRM has come to refer not just to the method, but also to the digital tools and software used to carry it out.
A CRM is a critical small business marketing asset. It stores data about current and potential customers, analyzes past customer interactions, and facilitates communication between clients and company representatives.
Using this digital tool is important for many reasons. For one, information about customers tends to be all over the place - scattered across social media platforms, buried in the inbox of a customer service rep, stored as a mental note by a marketing professional - the list goes on and on. When that information isn’t consolidated, it’s challenging to obtain a clear understanding of your customers and develop a marketing strategy that accurately reflects their needs.
CRMs solve this problem by pulling data from various marketing assets - including a company’s website, social media platforms, and email marketing system - and putting it in a single place. They also help companies make use of this data by providing features such as chat tools, marketing automation and contact management.
In doing so, CRMs make it easier for businesses to track their leads and prospects as they move through the marketing funnel, from the first touchpoint to the sale.
Why you need a CRM
Customer relationship management is one of the most important marketing trends today. Whether you’ve just launched your own business or have been in the industry for awhile, you’ll know it’s time to adopt a CRM if:
You have difficulty visualizing the relationship between the customer analytics data on your various platforms.
You find it tedious to navigate between different platforms and spreadsheets to get a big-picture view of your customers.
Your marketing and sales teams aren’t aligned in their targeting strategy and get slowed down by redundant tasks.
You have a hard time retaining customers, or too many leads fail to convert.
While you may start out managing your clients with a simple spreadsheet or email marketing tool, it becomes challenging to keep this data organized and cohesive as you acquire new customers. By creating a systematic record of customer data that’s easy to work with using integrated digital tools, a CRM system helps brands resonate more strongly with their target market.
Benefits of using a CRM system
You can think of a CRM system as an all-in-one customer management solution that helps you generate leads while engaging your existing customer base. The benefits of implementing a CRM include:
The massive amounts of data that businesses accumulate about their potential and existing customers is simply too large for the human mind to process alone. CRM data analytics tools not only consolidate this information, but also sort it to make it more readable and digestible for employees.
Deeper understanding of customers
A customer relationship management system aggregates the information about your leads and customers, storing information from separate sources in one place. This helps you create a targeted marketing strategy that addresses your customers’ pain points and aligns with their desires.
Improved customer service
By consolidating and sorting data, CRM systems also enhance your interactions with customers, improving the online reputation of your business. When engaging with sales and service representatives, clients won’t need to repeat their story over and over again because employees will already be up-to-date about their status and purchasing history. As a result, you’ll be able to address any customer concerns right away, boosting customer satisfaction and loyalty.
In addition to organizing customer data, a CRM system syncs that information with digital tools such as email, chat and social media. As a result, marketing and sales teams will be better aligned and will be able to target customers’ needs depending on where they are in the sales pipeline. CRM tools boost conversions by streamlining the sales process to guide customers toward a purchase.
Increased customer retention
While customer acquisition is vital to company success, customer retention may be more so. In fact, studies have shown that increasing customer retention by 5% can lead to an increase in profits of between 25-95%. By improving customer communication and enabling service teams to more quickly and effectively address their needs, CRMs can help companies build a loyal customer base.
Customer relationship management tools improve the efficiency of business operations by automating tasks like shopping cart abandonment emails and confirmation messages. This reduces repetitive work and frees up time for sales and marketing teams to focus on more strategic tasks.
Better internal communication
CRM systems facilitate collaboration between team members, reducing time-wasters like miscommunication and redundant tasks. In doing so, they improve time management, enhance productivity and allow for more frictionless project management.
Types of CRM systems
Now that you know about the benefits of using a CRM, you’re probably curious to know which kind is best for your business. CRM tools can roughly be sorted into three main types: operational, analytical and collaborative. While each of them accomplishes similar tasks, they have their own unique features and advantages:
An operational CRM uses marketing automation, sales automation and service automation to streamline business processes. Its primary purpose is to accomplish tasks that might otherwise take up large amounts of time. These include compiling important marketing analytics data, sending automated messages and keeping a record of sales and other customer behavior.
Ascend by Wix is an effective solution for small businesses that incorporates these features into your website. The platform includes email marketing tools, live chat, marketing automation and more. Because Wix marketing tools can be integrated with your professional site (see Wix marketing integrations), it’s helpful for managing clients, drawing in web traffic, and growing your customer base.
Analytical CRM systems prioritize data collection and analysis. They’re useful tools for analyzing data like customer preferences, contact information and more. Notably, they allow businesses to perform a complex analysis of multiple data sets - combining factors like customer location, and website behavior - in order to better identify buying patterns and trends.
With a large database and data mining capabilities, this type of CRM is particularly useful for analysts who need a close-up view of customer characteristics and behavior.
Like other types of customer relationship management systems, collaborative CRMs help companies gather and sort customer data for the purpose of improved customer management. Their structure, though, is specifically designed to improve synchronization between various teams.
This type of CRM software shares customer information freely throughout the organization, increasing workplace transparency and productivity. It also helps teams identify which communication channels best suit the preferences of particular customer types, whether it’s email, live chat or social media marketing.