What is CRM?
Definition of CRM: CRM stands for customer relationship management or the process of managing interactions with current and potential customers in the sales process.
Any strategy or approach that uses data to build, improve, and manage can include customer relationships in the description of “CRM.” Still, the term is most commonly used concerning CRM software in Pakistan or technology.
What is a CRM system used for?
In short, CRM (Customer Relationship Management) systems serve as a hub to organize and give meaning to data and precious audience information, providing all the tools you need to collect and manage information about people important to your business.
This functionality can vary significantly from one department to another. For example, CRM can help reps quickly see past interactions and purchases before calling.
Provide support teams with the basic information and contact details to provide excellent customer service.
Provide digital marketers with access to details to help them target their campaigns. Organizing and understanding CRM data information has become a key responsibility for any customer contact role within a business. But as the importance of public information grows, so does the amount of detail that companies need to keep track of.
The role of client-oriented management technologies like CRM is to improve the efficiency of the enterprise.
Statistical studies conducted in economically developed countries show that:
- The cost of attracting a new customer is five times more on average than retaining an existing one;
- Relationships with most clients begin to bring sustainable profit only a year after the start of work with them. Therefore, if a new client works with the company for less than a year, then the costs of attracting him do not pay off, and the company incurs losses;
- Making a deal with an existing client is much easier and 5-10 times cheaper than with a new buyer;
- Increase the number of regular customers by 5%, increases sales by more than 25%, and profit – by 50-100%;
- About 50% of the existing clients of most companies do not make a profit due to inefficient interaction with them;
- About 80% of the company’s income is provided by 20% of its customers;
- Customers dissatisfied with the interaction with the company replicate a negative opinion about it much more widely than satisfied customers – optimistic.
Of course, all these figures are nothing more than an indicator of the “average temperature in the hospital” however, the consequence of these studies is an occasion to think about the need to make every effort to retain existing customers, ensuring their loyalty, while still many companies, trying to capture as large a market share as possible, the main focus is on attracting new customers by implementing high-cost marketing programs.
According to the rapidly developing theory of relationship marketing, customer loyalty should be considered a set of parameters that characterize their behavior (the volume and consistency of purchases) and the perception of the supplier of goods and services.
CRM (Customer Relationship Management) is the asset of a company.
Thus, the client base is the company’s most critical asset, which they must carefully and effectively manage. It requires:
- Creating and maintaining a sense of loyalty among customers to the chosen brand (supplier of goods, services);
- Personalization of relationships based on studying the preferences of the client and his behavior;
- Selection of the most promising clients in terms of long-term cooperation.
Implementing these impacts naturally requires an individual approach to each client and analysis of relationships with them to identify the most promising ones, with whom it is necessary to maintain the most “warm” and trusting relationships. The differentiation of customers obtained through such an analysis will stimulate prospective customers and increase their loyalty and reduce the cost of relationships with those customers who do not bring a stable income. It is necessary to collect and process large amounts of information on the history of relationships with each client to solve this problem.
Modern technology guarantees business growth.
Investing in technologies to work with existing customers can increase their loyalty and ultimately significantly increase the efficiency and sustainability of the business. As noted earlier, the cost of organizing the sale of products and services to old customers is, in many cases, significantly lower than that to new ones. As a result, profitability can be higher even if the price is lower than that of a competitor. In many cases, a loyal customer becomes less price sensitive, which means that they can charge a higher fee for a product (service) without the risk of loss of turnover. This is especially true in cases of inelastic demand or companies whose business is associated with a high proportion of variable costs. We cannot discount that regular customers are more likely to use additional services (products) offered by the company.