Customer relationship management (CRM) is a process by which a business manages interactions with its current customers and potential customers. It includes an analysis of the customer’s’ history, primarily for the purpose of improving the business’s relationships with those customers. CRM also focuses on increasing customer retention as a means toward driving sales growth.
CRM systems are client management software that traditionally compile customer data from a variety of sources, including email, online chat, telephone and websites. Social media is also becoming a critical source of information for CRM systems. The information from these sources can be a highly effective means of learning the best ways for a business to cater to their customers’ needs.
CRM consists of four distinct phases, beginning with the use of marketing strategies to build customer relationships. The next phases are monitoring these relationships as they mature and managing them through this process. Finally, a business must recognize that customer relationships don’t necessarily have equal value. CRM systems also perform a range of functions to maximize the effectiveness of its marketing campaigns, including organizational design, maintenance of customer structures and development of incentive schemes.
These phases help a business to view the interaction of customer relationships as transactions. Furthermore, CRM attempts to assess the profitability of each relationship by analyzing customer purchase behavior. A business is thus able to determine the resources it should allocate to each customer.
Client Management Software Benefits
The implementation of a CRM system is likely to increase a customer’s satisfaction and knowledge for several reasons, including improvement to customer loyalty, reduced probability of customer defection, better understanding of customer behavior and fewer customer complaints.
CRM systems are able to customize offers for each customer by analyzing customer behavior to discover patterns. This degree of customization improves a customer’s perception of a business’s products and services. CRM systems therefore improve customer satisfaction indirectly since perceived quality is a component of customer satisfaction.
CRM systems also help businesses provide customers with better account management by processing orders more quickly and accurately. They can also help to ensure a more consistent customer experience across multiple business locations through the use of IT tools. Both of these factors increase customer satisfaction by improving perceived quality.
The factors that drive a CRM system’s value include the ability to connect customers across all marketing channels on a single platform. This feature also allows a business to integrate its customer assistance process across all channels, increasing the effectiveness of its sales force. Additional benefits for the customer include lower pricing due to improved sales efficiency.
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