What Does CRM Stand for? What Does It Do?
Software that tracks every interaction with current and future customers; a system that allows businesses to manage relationships and data associated with them; or a business strategy designed to reduce costs and increase profits by solidifying customer loyalty.
Whether a software, a system or a strategy, CRM means different things to different people. The acronym CRM means Customer Relationship Management, but managing customer relationships is only one of many things that CRMs can do.
According to Forbes, CRM is expected to grow to a $36.5 billion market worldwide by 2017. As companies begin to realize the most valuable assets they have are solid, long-term customer relationships, more and more are looking to invest.
Before even considering a CRM, most people will opt for using an email program, a Microsoft Excel spreadsheet and a little bit of social media thrown in. That’s not bad when first starting out, but eventually, upgrading becomes necessary if growth is ever to happen.
The Pathway to CRM Growth
Once a business begins acquiring customers, the need for customer relationship management grows exponentially. Email, spreadsheets and social media give way as one centralized platform becomes a necessity.
The question most business owners first need to ask is, “Am I ready to invest in a CRM platform?” Most likely, if a business has at least 20-50 solid leads and/or customers, it’s time to invest. But, is a CRM the next step, or is there something else?
Beginning with Email Marketing
As sort of a precursor to a CRM platform, many email marketing programs like Constant Contact or MailChimp bridge the gap between nothing to something. Most email marketing programs can easily import contacts from an Excel spreadsheet, making the initial transition smoother than at first thought.
The added benefit of a dedicated program can be found in the tracking. Rather than assume or guess that your contacts have received your email, email marketing software can provide a detailed synopsis of interaction.
Three crucial analytics that users review are:
- Open Rate – The number of subscribers that actually viewed your email.
- Bounce Rate – The number of subscribers that didn’t receive your email.
- Links Clicked – The total number of links (and which ones) were clicked by subscribers.
As you can see, email marketing software takes communication to campaign and allows users to hone and segment messages. In doing so, the user can send the right message to the right group. Companies using email to nurture leads generate 50% more sales-ready leads and at 33% lower cost. (Hubspot)
Where email marketing stops is where marketing automation begins.
From Email to Marketing Automation
In creating an email marketing campaign, the end result most always involves clicking a link to a landing page. But what happens once that subscriber leaves their email account and visits the landing page of a website? How do you see the interaction on the site itself?
As we progress up the CRM evolutionary ladder, email marketing is gradually being enveloped by marketing automation. And it had to, as lead generation grew in importance. With marketing automation, the lead to loyal customer funnel becomes streamlined and focused.
To better support the relationship between Sales and Marketing, lead generation becomes a sophisticated machine, capable of nurturing leads into sales-ready customers. We can see now how marketing automation takes from email marketing and builds upon that foundation.
For example, let’s say ‘John’…
- Subscribed to your email newsletter to get an eBook (level 1)
- Downloaded the free eBook, then (level 1)
- Opened the first follow up email, then (level 2)
- Clicked a link in the email (level 3)
- Watched the video from the link (level 4)
- Shared that video in a Facebook post (level 5)
Based on your criteria, ‘John’ hit your threshold (level 5) with the Facebook share, your highest priority. You could say without too much hesitation that ‘John’ is ready to be turned over to Sales. Thresholds will vary, but the concept is adaptable, no matter the priority. To date, nurtured leads produce, on average, a 20% increase in sales opportunities versus non-nurtured leads. (DemandGen Report)
From Marketing to Sales to Customer Service
We see marketing and sales benefits, but what about customer service? Again, in the evolutionary process, the lines blur as marketing automation and CRM merge. Sales, marketing, customer service and even project management are being corralled under one mighty CRM platform.
In managing processes of this magnitude, it was necessary to install and host programs in-house. Called ‘On-premise CRMs’ these platforms allowed for customization to better serve an individual company’s needs.
But, as with all technological innovations, the platform began following the trends. We now have Online CRM. Offering basically the same functionality as its offline brethren, but somewhat limited in customization, Online CRMs offer an easier introduction to the CRM platform. In fact, 6 years ago only 12% of businesses used cloud based CRM – This figure has now increased to 87%. (Software Advice)
Within either platform, you’ll find the ability to now cater to those newly converted leads as loyal customer and with a full cache of tools to assist you. From support ticket servicing to SLA (Service Level Agreement) alert statuses to project management, CRMs help businesses elevate their customer acquisition processes to a new level of performance.
The Future of CRM Software
The CRM platform continues to evolve, as do most technology based platforms. Current trends see more and more third-party integrations being developed specifically for CRMs. Mobile access along with social media top the list of innovations requested by avid CRM users.
Look for the merging of email marketing, marketing automation and CRM technologies to continue as businesses pursue cost-cutting measures in an effort to streamline operations.