Customer relationship management is a business strategy for any company looking to improve revenue and profitability, reduce costs, and increase customer loyalty.
Their philosophy is quite simple: put the customer first .
When implemented correctly, customer relationship management offers companies not only insight into business growth opportunities with each customer, but also a way to measure their value within the customer journey.
How do we define customer relationship management?
Customer relationship management, also known as Customer Relationship Management (CRM) , plays an essential role for companies that want to improve their revenue, increase customer loyalty and enhance customer satisfaction throughout the journey.
In practice, CRM is more than just a tool; it is a set of customer relationship management strategies that aim to improve customer satisfaction and strengthen customer loyalty.
This helps your business improve its profitability while promoting customer satisfaction and loyalty .
Generally when we talk about CRM , people tend to associate it with a CRM system , which is a tool that helps in managing contacts, sales and workflows.
However, Customer Relationship Management allows you to focus on your organization's relationships with people – whether they are customers, service users, colleagues, or suppliers.
Furthermore, CRM isn't just for sales. Some of the biggest productivity gains come from going beyond CRM as a sales and marketing tool and integrating the system into your business.
Why is CRM important for my business?
In the commercial world, the importance of retaining existing customers and expanding business is paramount. The costs associated with finding new customers mean that every customer is the lifeblood of a business.
The more opportunities you give your customers to do business with you, the better. One way to achieve this is by opening channels such as direct sales, online sales, franchises, partnerships, etc.
However, the more channels you have, the greater the need to manage your interaction with your customer base, right?
Therefore, customer relationship management helps companies gain insight into their customers' behavior and modify their business operations to ensure that customers are served in the best possible way.
In short, CRM helps companies recognize the value of their customers and capitalize on better relationships with them. After all, the better you understand your customers , the more assertive your actions will be.
How does CRM work in practice?
Any business should start with a strong foundation of customer relationships, as you connect with people who need your product, and as your company grows, these business connections should evolve and become more sophisticated.
It's not just a transaction between the buyer and seller, over time you begin to manage a multitude of connections within each company you do business with – and having all of this organized is critical to data-driven decision making .
You need to share information across multiple teams in your organization who are interacting with the same customers, so a CRM system serves as a vital strategy for managing the connections that occur in a growing business.
While some people think of CRM as just a technology, it's much more than that. No technology, no matter how sophisticated, can be successful without a strategy to guide its implementation and use.
Business strategies and technology must work together to bring to life a customer-centric , which should be based on clear goals and a vision of what a meaningful customer experience is.
Every time a customer comes into contact with an organization, through any of its channels, the customer has the opportunity to form an opinion – be it good, bad or indifferent. And over time, this set of customer experiences will form an image in their mind, and thus, will build the brand image and its values for the consumer .
Difference between CRM and CXM
To begin, we should look at a definition of each. While there are many available descriptions, we'll look at the current ones cited by Gartner :
Customer Experience Management (CXM): “It is the practice of designing and responding to customer interactions to meet or exceed their expectations , and thus increase customer satisfaction, loyalty, and advocacy .”
Customer Relationship Management (CRM): "It's a business strategy that optimizes revenue and profitability while promoting customer satisfaction and loyalty . In this scenario, CRM technologies identify and manage customer relationships, whether in person or online. Furthermore, CRM software provides functionality for companies in four segments: sales, marketing, customer service and e-commerce."
After reading the two definitions, you may be thinking that they “sound” very similar, but there are very subtle differences.
CXM recognizes that in recent years there has been a fundamental shift in the relationship between the seller and the buyer, and organizations that provide or sell goods and services now need to keep the customer at the center of everything they do , to gain competitive advantage.
While CRM focuses on managing customer data and structuring business relationships, Customer Experience Management (CXM) focuses on creating a more qualitative customer experience .
So where does CXM add value to my company?
Customer experience management shifts the focus from using software tools to controlling customers and the team that serves them. It is designed to apply technology to a customer-centric strategy that will provide relevant and superior service, aiming to gain a competitive advantage .
A CXM solution shifts the focus from data management to applying customer information at the right time and place, so it can be used to deliver consistent customer experiences— delight customers .
CXM is more qualitative than quantitative, and still has the ability to make CRM information actionable, and with a much stronger focus on customer outcomes.
CRM systems have struggled to make customer data actionable at the point where it can be applied to benefit a customer interaction.
CXM completes the information journey for a positive customer experience with measurable benefits .
It's important to remember that a good CXM must provide a great experience across any channel or device the customer wants to use, such as web, chat , SMS, smartphone, smart app, email, or voice.
customer satisfaction , retention rates
How to implement CRM?
Have you ever considered how a customer relationship management (CRM) system can transform the way you connect with your customers? Implementing an effective CRM can be an incredible journey involving four simple yet powerful steps.
Remember: this isn't just a process issue; it's an opportunity to cultivate a culture that values every customer interaction.
To create an environment where everyone feels valued and heard, it's essential that your marketing, customer service, and public relations teams come together to foster a culture of empathy and lasting connections.
Let's explore together the four steps that will lead you to successfully implementing a CRM:
1. Identify your customer
The first step is to connect with your customer's essence. Ask yourself: "Who is this person? Where do they live? How do they prefer to communicate?" Understanding their needs, desires, and previous interactions with your company is crucial.
Remember that every piece of information you gather is an opportunity to build a deeper relationship. Avoid repeating questions across channels; instead, show that you genuinely care.
2. Differentiate wisely
With the data in hand, start differentiating your customers. Ask yourself: "Who would benefit most from my product or service?" Classify your customers into two categories: those with the highest value and those with the highest potential.
Encourage your customers' participation by seeking suggestions and listening to their complaints. These interactions are valuable because they reveal insights that can shape your approach, allowing you to anticipate and effectively meet their needs.
3. Encourage interaction
Understanding your customers is just the beginning. Now, it's time to create an environment where they feel comfortable interacting with your company. How? By personalizing products and services and offering benefits that keep them engaged.
Use social media as a powerful tool to create meaningful connections. Share engaging content, irresistible promotions, and discounts that inspire your customers to interact.
4. Personalize the Experience
Now that you understand your customers' needs, personalize the experience you offer. Ask yourself: "How can I make each interaction unique and memorable for them?"
Establish a continuous feedback loop where your customers feel comfortable sharing their experiences. This will ensure you're always aligned with their expectations, delivering exactly what they want at the right time. To achieve this, your team must be trained and willing to adapt their approach, while maintaining the necessary flexibility and sensitivity.
Let's visualize this in practice. Imagine you bought a pair of shoes online, but upon receiving them, you realize they're not the right size. When you contact Customer Service, a friendly representative asks how they can help. After listening to your explanation, they record your information and generate a service report.
With empathy, they explain the exchange policies and offer a quick and effective solution. Your satisfaction is recorded, and this information will be valuable for the company to better understand your consumer profile, as well as the efficiency of its service.
After the exchange, the company cares about your experience. This demonstrates how customer relationship management can be practiced effectively and humanely .
Implementing a CRM isn't just about processes; it's about creating a truly customer-centric buying journey, where every interaction is an opportunity to build a meaningful, lasting relationship .
Conclusion
Using good customer relationship management software does not guarantee that a company will extract all its potential benefits .
To get the most out of a CRM, companies must have a strategy for acquiring customer data, determining which data is most valuable, and using that information effectively.
Implementing good customer relationship management in a company requires managers and employees to rethink traditional ways of doing business and be able to build a customer-centric culture .
Given all that your current customers can do for you, there's simply no reason not to stay in regular contact with them.
Using a robust Customer Relationship Management platform allows the company to continuously monitor and improve customer satisfaction, promoting a long-term relationship.
Use your imagination, and you'll come up with many other ideas that can help you develop a lasting relationship with your clientele.
Also, take a look at Harmo – software for managing locations on Google Business Profiles, used by over 40,000 stores. It's the only solution on the market that's proven to increase customer traffic .
