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Customer Relationship Management (CRM) - Pros and Cons
Posted on April 6th, 2021
When running a business, long-term relationships with customers, vendors, and partners are important for maximum success. Keeping and nurturing relationships are an imperative part of business, so how do you keep track of all of it?
The process in which to do that is called Customer Relationship Management (CRM). There are many software solutions out there that help manage those bonds. Let’s take a good look at what is available for you in regards to CRM software, along with the pros and cons that come with them!
First, let’s answer the common question: What is Customer Relationship Management?
In a very broad sense, Customer Relationship Management is the process in which businesses can administer their customer or client interactions. Within that concept is the utilization of collecting and analyzing data on customers, clients, and audiences. This is done through Customer Relationship Management software systems or CRM systems.
A CRM system is an organizational tool to track or manage all of your communication and relational contribution, including all facets of individuals and partners that are involved in your business. The system can track connections made between your business and customers through communicative channels such as your business website, phone calls, emails, social media, and live chats. After collecting this data, the information gathered helps you understand your audience more, improving your abilities to best provide to their needs which leads to more customer retention and growth in sales.
Simply put, a CRM system’s purpose is to improve a business’ efficiencies and improve the sales funnel with improved probabilities of success. It’s clear that many companies focus their efforts on optimizing their sales processes. In fact, a CSO Insights study from 2018 states that “48% of companies report that improving their CRM sales funnel is” a top sales priority.
With just a brief overview, the importance of understanding and owning a CRM system has probably shined through. It may sound like a simple concept but there are a lot of aspects to a CRM system, especially if you’re in the process of choosing one!
Let’s start with the positives and explore a few of the pros that come with a CRM system.
While a lot of CRM systems rely on manual data entry, there are those that automate this task for you. Automation can drastically reduce the time spent entering in data and improve productivity by letting employees focus more on sales. For example, a customer signs up for an eBook download from your company’s website. If the sign-up form is connected to the CRM system with the correct field configurations, that contact information will automatically be entered into the system without you pressing a single button!
A CRM system should make you and your sales team’s life easier. Systems with automated capabilities will greatly improve productivity and work-efficiency by offloading some of the tedious tasks for your sales team.
Improved Customer Service
When customers have a common problem, it is best to provide a solution as soon as possible. CRM systems can collect data that will help identify these common problems so your team can quickly find a solution to resolve the issue. Whether it be resolving the problem behind the scenes or having an answer readily available for your customer, a CRM system ensures that your business’ customer-issue response can be as efficient as possible.
Furthermore, the CRM system is there to enter and track your customer communications. If your representatives have a demonstration to give to a potential client, they can go into the CRM system to read over notes on previous conversations to ensure that they’re providing the right answers and details that are specifically tailored to that client’s needs. This in turn results in higher success rates, quicker conversion rates, and great customer service.
When it comes to communicating with your customers, you want all of your interactions to run as smoothly as possible. To do so, all information on what the customer needs should be accessible to your employees or representatives.
Luckily, CRM systems are made to be centralized for all individuals to create leads, add information, and make edits that are shown across all access points. This ensures that your whole workforce is on the same page when communicating with customers or researching their needs. A survey that studied CRM opinions found that 74% believed their system offered improved access to customer data. Think of it as a hub for organized customer information!
Powerful Insight and Analytics
One of the main functions of a CRM system is to collect data on your customers’ interactions and needs regarding your business. That data is vital for strategies to move forward with your business. Creating a decisive strategy around your customers and utilizing this data ensures customer retention and meeting their needs!
Not only does it improve the decision-making process, but it also provides a meter of scalability for your business. As your business grows, your customer base grows as well. You will be able to track the number leads you’ve found, how many have been qualified, how many are loyal customers, the number of purchases from them, and more. To help you calculate your company’s growth, CRM systems provide a new metric to do so.
Moving on, let’s look over the cons. While these may sway your opinions on CRM systems, there is an answer to them at the end!
After reading the overview of a CRM system, it shouldn’t come with surprise that they come with a lot of manual and tedious data entering. The system is a catalog of data, all revolving around the interactions your business has between its customers. This means every conversation in person, on the phone, over email, etc. must be entered in for accurate data analysis.
It is true, a lot of time can be taken up by tedious tasks like data entering. Some of the information may come in smaller portions with less importance as well, but rest assured, the information that you track is extremely important. It is the backbone of a CRM system and its capabilities to help ensure you make the best business decisions regarding your customers.
Difficulty with Installation
Companies do their best to keep their software solutions as simple and easy to install. While that may be, self-installation and ensuring the software is properly set up can be a dubious and daunting task. Moreover, this could lead to overhead costs for system administrators, developers, and maintenance technicians having to step in when help is needed.
Once the CRM system is set up, training may be a necessity, especially for larger corporations that mandate a training course for their employees. This means that time is spent out of the day to train employees to fully understand how it works after implementation. Obviously, this leads to less time making sales calls and reduces productivity, and if the installed CRM system doesn’t match well with the workforce and business’ needs, it becomes a huge waste of time and money for everyone.
Let’s say that your business has gone through the whole process of evaluating CRM system options, buying a solution, installing it, and training your whole workforce on how to use it. There are two directions it could go in. One – it’s smooth sailing from here, in which case, congratulations. Or two – you start running into technical issues that requires outside help.
Unfortunately, the second direction can happen, and your business may have to outsource the work to someone outside of the company or hire a specialist that can and will manage the CRM system from within.
It isn’t to say that all CRM systems will have these pros and cons. Like most products and services, they all come in different shapes and sizes with differing capabilities. If you are in the process of choosing a CRM for your business, it is best to do your due diligence to avoid any complications.
However, if you find yourself asking, “Is there a CRM system that has none of the cons, all of the pros, and then more?” then you are in luck because the answer is, yes!
Here at A Digital Earth, our expert software developers have worked with hundreds of companies across all industries to deliver high-quality software solutions that are specifically tailored to each individual business. Not only do our developers build and configure the software for your business, but they also work as your consultants to ensure that your needs are explored, discovered, and met.
Our services don’t end after delivering the product as well. We are here around the clock to help with training, servicing, adjustments to the software, questions, and more. We are your all-in-one software developer gurus!
If you’re interested in a CRM system specifically tailored for your business or you’re looking to switch systems, connect with one of our experts for a FREE Power-hour!
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