Customer Relationship Management (© peshkova / Fotolia.com)
Customer Relationship Management (© peshkova / Fotolia.com)

Customer relationship management, or CRM, is a great way to establish a long-term relationship between you and the customer. But in order to use this strategy effectively, you have to understand the tactics as well as the pitfalls to avoid. In this article, we are going to fully explore the term ‘customer relationship management,’ as well as give you some strategies to help you use it in your own marketing efforts.

What is CRM?

You have to start by defining customer relationship management before anything else. Customer relationship management is a business process where you build long-term relationships and loyalty through your marketing strategies. While a lot of marketing is about reaching the customer in influencing their decisions, CRM is all about building those relationships for the long run.

How Customer Relationship Management Works

 If you have a product or service that you want to sell, you have several choices when it comes to how you go about marketing that product or service. You could simply go the conventional route and let people know what the benefits are from using your product and why it is better than the competitions. This often works in the short-term, but rarely does it inspire lifelong loyalty from a customer. Customer relationship management has the same goal is traditional marketing but what CRM does is make the relationship the priority instead of the product sale.

The Practical Side of Customer Relationship Management

When it comes to customer relationship management, there is a practical side that is probably the most important element of this strategy. That's because everything that you do from a marketing perspective is going to be based upon information that you have gathered and analysis of that data. If you do not have the data in the first place, then you are not going to be able to conduct any sort of analysis, and any strategies that you come up with to build a relationship with those customers is going to simply be a guess. So, let's look at some of the more practical elements of customer relationship management.

CRM Software

The first thing that you need to know is that most CRM today is based around software. Computer software allows you to gather the data that you need and then gives you the tools to analyze it. CRM software has many uses but the primary one is to gather customer data into one location where it can be viewed as a whole and by multiple people. Much of the software has the capability of gathering data from social media, telephone calls and any other type of customer interaction that exist in the digital space. Some of the options that might come with CRM software include

  • Geo-location services that allow the application to create the perfect campaign for customers that are based in a certain geographical area. This may mean keeping track of events that are happening in that area and using the data gathered from local sources of information to construct the perfect marketing campaign for people that live in that area.
  • Sales Management Services is another aspect of CRM software. Sales force automation allows the application to keep track of things like customer  contact information, when the optimal time would be to make a sales call, all past interactions with that customer and basically anything that a salesperson would need to know in order to have the best chance possible to sell something to that customer.
  • Some CRM applications also have marketing automation capability and can take over some repetitive tasks, leaving the members of the marketing department free to concentrate on the things that get better results. For example, often CRM automation software can almost completely take over the process of turning a site visitor into an email prospect and from there into a customer.
  • Finally, most CRM applications provide the sales and marketing people with tools on their desktop that will allow them to cut down on time that is spent on task that aren't directly related to sales, and basically, simplify the entire customer service  process.

Marketing Types Associated with CRM

Now we are going to take a look at some of the different elements and marketing types that are associated with customer relationship management. These are not the only elements that make up the entire CRM model, but they definitely are the most popular ones.

Email Marketing

Email marketing is one of the most effective ways to communicate with customers that has ever been conceived. There are several reasons for this. First, people read their email even when they don't read anything else. for example, sending someone a message on social media may not get through to them not only because they may not have checked it but also because it may have gotten lost in the sea of other social media posts, but email that is sent to the primary inbox is usually - at the very least - opened.

Email marketing is efficient and inexpensive when you compare it to other marketing strategies. For example, if you were doing phone marketing or direct mail, you would have to spend money on several different things in order to run an effective campaign. But an email campaign can be set up very quickly and can run completely automated. Email marketing is driven by data, and so it is a customized style of marketing that fits perfectly under the customer relationship management umbrella. Some of the ways that you can use email marketing to build this relationship is through coupons, gift cards, newsletters emails on holidays and on birthdays, as well as a number of other strategies.

Web Marketing

Web marketing is the next CRM aspect that we are going to discuss. Building a relationship with a customer on the web is important because that's where people live now. Well you can still reach people through television and radio advertising, marketing on the web is much more effective and ever present.

Online shopping is definitely a big part of web marketing when it comes to CRM. Depending on up on the product and service that you have, you may be able to set up an e-commerce site that allow customers to buy from you directly. Even if that is not the case, you are still going to need something to market.

There are some pretty big advantages to web marketing. One is how inexpensive it can be if you do it correctly. As one example, creating a PPC or pay-per-click campaign that uses a high-traffic keyword that nobody else has discovered may get you visitors to your site for just a couple cents each. Of course, the trick is finding that keyword.

In addition, web marketing can be tracked a lot better than other types of marketing can. Campaigns can easily be analyzed and corrections made on -the-fly to improve a marketing campaign.

Data Analysis of Customer Behavior

Another thing that a CRM application can do is to analyze customers buying behavior and give you information that will help you to make better marketing decisions. When you gather information about customer buying habits using your CRM application, you are able to easily implement changes and tweak your marketing so that it is as effective as possible. For example, if your CRM software tells you certain customers are buying specific types of products, then you will be able to put more of those products in front of them or even widen your selection in order to accommodate them.

Seeing the Future

CRM software is also good for looking into the future from a marketing perspective. For example, your application may be able to come up with future marketing strategies that are going to help you down the road. Plus, your CRM software can identify trends in the marketplace and help you use them to your advantage.

Marketing Plan Evaluation

Probably the most important use of a CRM application is to give you the tools that you need to not only examine your marketing plan and find out if there are any flaws in it, but also to make fast changes to the plan to avoid catastrophes down the road.

Companies need to ensure several things when they are looking at a CRM application. You need to make sure that the data you are getting is accurate that it is being captured properly. You also want to make sure that the analysis is being done correctly. Both of these are vital for any CRM software. Beyond that, you should also look in the security and make sure that the only the right people are getting the data that they need.

The Four Types of Customer Relationship Management

 There are actually four types of customer relationship management or CRM that we are going to discuss in this article.

Strategic

Strategic CRM is when you use customer relationship management to create plans for the future, change current plans or use information gathered in any way to improve your marketing strategy.

Operational

There are three areas in operational customer relationship management marketing sales force and service automation. We've already discussed some of these. But the main goal of any operational CRM is to automate tasks whenever possible and integrate all of the various departments such as sales, marketing and customer service, into a single platform that employees can access and data can be consolidated, and then analyzed for “big picture” understanding.

Sales force automation includes entering customer contact information into the client database and then keeping track of everything that the client does in regards to the company so that the information can be used later on to make sales. Service automation is done through the use of automated customer service tools such as online forums, knowledge bases or Ticket systems. As for marketing automation, the goal is to make the entire marketing process run more smoothly.

Analytical

CRM systems are also designed to analyze the data that they collect so that those in management may be able to make better decisions for their business. These analytics help with everything from customer service to marketing and they definitely help develop a relationship with the customer. If you can figure out what someone wants and then laser focus here marketing on that, your customers will appreciate it.

Collaborative

The final aspect of CRM systems is collaborative. CRM systems have a goal of bringing all of the information together in to 1 easy to access platform, and then giving access to that information to the people who are supposed to have access.

Conclusion

The bottom line is that there is a lot to customer relationship management even if all you were talking about is the components that make it up. When you get into how to use this powerful tool effectively, then Things become even more complicated. However, it is one of the best ways to improve your company's marketing, customer service, sales and pretty much every other department.


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