CRM (Customer Relationship Management software) was created in the 1980s as a simple database of customer information. With the development of marketing strategies and the new approach that focuses on customers instead of products, CRM transformed into a business tool that optimises all business processes. Wise use of CRM, in fact, makes it possible to increase sales, create customer loyalty, and attract new customers. At present, CRM is a tool that involves all business sectors: marketing, sales, logistics, and production.
Why adopt a Customer Relationship Management solution?
The most recent CRM software transforms the customer database into an invaluable source of information. This is called “Data Mining” and it makes it possible to:
1. Analyze individual customer journeys
CRM provides data on which and how many products each customer has purchased, how many newsletters with commercial offers they’ve viewed, what specific special offers they’ve accepted, how much time they’ve spent on specific site pages, what relationship they’ve had with customer care, and much more. This information is extremely useful for Marketers, who can thus create personalised offers, through marketing automation platforms. CRM also makes it possible to take Next Best Action Marketing actions, making a second offer precisely tailored to the individual customer’s preferences. Well-designed CRM software also makes it possible to plan cross-selling and upselling actions based on the customer’s profile and to classify customers by categories, known as Buyer Personas, based on consistent behaviors and interests.
2. Attract new customers
CRM is a valid tool for acquiring leads and interacting with prospects and potential customers. Through web forms generated by CRM software, data obtained from social media, emails received, contact lists acquired, and customer care chatbots, new contacts can be made and the entire process of lead nurturing followed, i.e. continuous interaction with the potential customer, aimed at generating a conversion.
3. Perform an analysis that predicts behavior
An analysis of customer behaviour as registered by the CRM can make it possible to predict which products will be the most popular, future conversions, geographical areas where the most product purchases will be made, and the months when products or services are most in demand. Company managers can thus base production and logistics on the results of the predictive analysis, while marketing managers will obtain useful information for their online and offline campaigns.
4. Interface CRM software with Big Data
The business data in the CRM can interface with Big Data like that related to customer interactions on social media, demographic and sociographic Big Data, Big Data related to family composition, income, and education, and psychographic data, which reports interests and habits. This produces information that makes it possible to plan data-driven marketing campaigns that are much more efficient than actions which are not based on measurable information.
How CRM software functions
CRM is continuously evolving. From a tool for managing customers, orders, and contacts, it’s transformed into a sort of business management and marketing strategy.
Essentially, CRM can collect new leads and information on consumers, analyse the data collected, determine customer or market needs, and consequently adapt marketing campaigns in order to increase sales.
In business terms, CRM also supports customer care, making businesses efficient and thus improving customer experience and user satisfaction.
The relationship between Customer Experience and Customer Relationship Management
In a market where business is now geared to recognising that the focus is on customers rather than products, customer experience is the customer’s perception of a brand, product or service. Knowing how to offer old or potential customers a positive customer experience is the foundation for any successful business. So what is customer experience? Here’s a definition:
customer experience includes all of the customer’s experiences, emotions, and memories while interacting with the brand, during all phases of the customer journey.
Customer Experience and Customer Journey
Here are the principal phases when a user’s experience affects the process of purchasing a product or service:
In general, a user who wants to purchase a product enters the purchase funnel by obtaining information from the website. The user experience begins with browsing a site in a fast, enjoyable way. For this reason, when managing their web presence, businesses need to be attentive to the User Experience Design. Texts must be easy to consult and above all must provide concise, complete responses. Therefore, an analysis of User Intent or Query Intent is essential to develop texts that offer precise answers to requests. An SEO analysis will also be useful, revealing the most frequent queries and the pages most frequently visited, supplementing data with the questions most often directed to customer care or in customer care emails. The data analysed to make it possible to improve product information sheets and site content, basing it on what the consumer really wants to know.
For many companies, online sales are one of the main channels for selling products or services, if not the only one. Well-planned e-commerce can help improve Customer Experience. Be careful, of irritating, overly detailed requests in the registration form (potential customers don’t like it when companies are excessively interested in data gathering and profiling), perhaps by avoiding registration pop-ups for people who are already customers. Online purchasing is more enjoyable when the overall process is fast, with only a few steps from product selection to payment. Be very careful with product information sheets, paying close attention to images and videos, descriptions, and important elements such as dimensions or measurements and available colours. Finally, users will appreciate automatically generated product suggestions based on purchasing history, and bundled cross-selling offers (the classic cover for someone who buys a smartphone) to increase the value of the cart. Finally, it helps to adopt remarketing techniques for carts that are abandoned before the purchase, to generate conversions.
3. Customer care
Customer Experience obviously extends to customer care. Good customer care starts with the purchase, for example by offering a live chat with an operator during product selection, so the user can request information before making the purchase. A WhatsApp business number on the home page can encourage customer contact and perhaps sales, especially in specific sectors. Finally, organising customer care into multi-channel modalities (email, chat, and toll-free number) will offer a welcome experience. Common experience says there is nothing worse than contacting a business that offers interesting products but neglects after sales service and provides only a telephone number, which may not be toll-free: Customer Experience becomes absolutely negative for the brand and certainly creates no customer loyalty.
The interaction between Customer Experience data and CRM software
Data collected during the Customer Journey, integrated into CRM, is fundamental for creating a new approach – Customer Experience Management. The data processed by CEM and CRM makes it possible to analyse the user’s behaviour history, but also the consumer’s opinion and any difficulties encountered in interacting with the business. Integrating typical CRM data – which offers marketing managers clear information, allowing them to develop personalised offers – into data related to the various phases of the relationship with the business, which Customer Experience managers will use to improve the general experience, provides invaluable information because it is data-based.
Customer Relationship Management as a business driver
We’ve analysed CRM software and noted how attention to the customer has transformed a simple business tool into a true marketing strategy, making the relationship a source of strength. The traditional sales concept, where a product is promoted in hopes of attracting consumers, becomes business as a relationship, in which ROI is based not just on product quality, but more importantly on the value of customer relationships.
Customer loyalty is the goal of any business because it’s easier and more economical to profit from satisfied customers than to seek out new ones. CRM is thus an essential tool because it makes it possible to personalise communication and offers based on the customer’s behaviour and interests. An analysis of customer preferences, interactions with the business, site browsing, and geographical origin offers clear marketing opportunities that are personalised and thus more effective than general campaigns and messages.
Adoption of a customer-centered strategy based on data extracted from CRM software can only have a positive effect on ROI. Even if the benefits of using CRM are difficult to quantify in economic terms, its strengths include:
- Customer satisfaction – A satisfied customer is a loyal customer who feels no need to go to the competition
- Revenues from upselling and cross-selling – An analysis of the customer’s order history and interest shown in certain products while browsing the site makes it possible to design tailored upselling and cross-selling offers, with a good possibility of conversion because they’re personalised
- Lowering the customer attrition rate – CRM also makes it possible to manage reselling and act on “abandoned carts”
- Optimization of operating costs for orders, logistics, and procurement – An analysis of purchasing data collected by CRM offers information on more or less popular products, optimising their supply and logistics. Shipping costs can also be lowered by determining the geographical areas of order origin and the most frequent shipping weight
- Automation of customer credit situation – CRM software can also handle credit management, automating collection procedures
- Optimisation of marketing costs – Dividing customers into warm and cold prospects makes it possible to allocate larger budgets to potentially effective campaigns, leaving out customers who have not shown signs of interest for some time
Adoption of CRM software is thus the last step along a path that requires a new approach from business managers, based on understanding the customer and focused on maximum satisfaction. The tool, which is not very effective if used as a database of customers and suppliers, has great potential and can support business strategies that are focused on customer satisfaction. CRM in fact processes data and statistics, and it can automate customer profiling functions and the consequent marketing campaigns.