An individual consumer can either make or break the growth of a company. This is where Customer Relationship Management (CRM) is deemed necessary.
CRM acts as a backbone of today’s businesses operating at a vast scale and serves consumers on a global level.
However, the definition of “CRM” isn’t just limited to building a roadmap for a consumer to reach a shop and buy products. Instead, it involves a comprehensive study of a buyer’s journey to becoming a profitable customer of the company.
Modern CRM systems are beyond conventional tactics that were supposed to help manage consumers a few decades ago. New solutions understand how to stay updated with a buyer’s journey.
Beyond a doubt, it is made possible with today’s advanced CRM system that comes with innumerable capabilities. It gives a centralised solution to the companies and also emerging as the most important sales tool that doubles profits.
To simply put, CRM software has brought easiness for big and small enterprises as now they can better prioritise their business goals.
Let’s go deep into the article and decode all those pointers to demonstrate the significance of Customer Relationship Management in today’s industries.
- 1 How do you Demonstrate Customer Value?
- 2 What is the Value of a CRM in Your Business?
- 3 How do you measure CRM Effectiveness?
- 4 Let’s Answer Some Frequently Asked Questions (FAQs):
- 4.1 Q1: How can I reduce my customer acquisition cost?
- 4.2 Q2: What is the lifetime value of a customer to me?
- 4.3 Q3: What is the length of a sales pipeline stage?
- 4.4 Q4: How do you measure customer lifetime value (CLV)?
- 4.5 Q5: What is Customer Acquisition Cost (CAC), and how does it work in a business?
- 4.6 Q6: What is best CRM for any Business?
- 5 The Bottom Line
How do you Demonstrate Customer Value?
Consumer value is about how an enterprise’s offering changes the perception of a viewer. To simply put, it involves how a product/service connects buyers mentally and emotionally. It is the magic of an enterprise that pays high importance to its buyers instead of focusing on large investments alone. It insists users do the same the way many companies want with increase customer retention as a result. Here’s how a great consumer value makes it happen.
1. Focusing On Valuable Content Offering
If an enterprise isn’t producing valuable content, it will fail to do anything for relationship management. It wouldn’t reflect the superior consumer value that is needed. Mainly, if an enterprise is just a startup, it is essential to draw the audience’s attention.
It is only possible if the startup offers valuable content to the users that compels them to stop and explore what that startup company has to offer them. It must be compelling enough that it influences the user to take prompt action.
However, this isn’t about launching an attractive advertising campaign but about exercising some unique ways that impact buyer’s decision-making.
According to a report by Demand Metric, 70% of internet users are influenced by a blog post or internet content rather than a random advertisement.
Beyond a doubt, the research shows the importance of content offering that is more effective in making buyers realise how valuable they are to businesses.
2. Building a Community First
Valuable content is useless until a business has no audience to view it. Both these vital things must be considered at once to derive the desired outcome from an execution.
A community can act as a core pillar for a company.
For instance: if an enterprise wishes to derive unique insights into consumer’s demand and his likings, taking help from the community has always been a smart move.
Similarly, it helps enterprises in knowing consumer interest and behaviour over a particular product or service. Since everyone has mobile access you can post content in a Facebook group or page and see the audience’s reaction.
However, it is also essential to note down what type of people are in a community. If a brand produces makeup and shares content around men’s lifestyle, it will fail to draw even a single sale as it isn’t relevant.
These nitty-gritty pointers must be checked before building or sharing content in a community. Only then would an enterprise be able to give real importance to the consumers.
3. Don’t Sell, Satisfy Needs
People hate purchasing anything randomly from the seller who doesn’t offer any importance to them. For instance- a seller wants to sell standard combs, he will hardly receive any increased sales because already people are selling them in the market.
At the same time, if that seller starts highlighting the significance of its comb. To simply put, if the seller points out the speciality of its comb instead of calling it a comb alone, such as comb for dandruff or head louse issues, it is more likely to draw people’s attention.
People who are genuinely going through such types of hair issues won’t take a moment to purchase these combs. That’s how a product offers importance to its consumers.
4. Improvement Is A Key
Improvement can promote business growth which is more helpful if a business is taking assistance from technology. Improvement plays a leading role in skyrocketing business performance when technology is involved.
70% of companies say that improvement means digital transformation, which helps an organisation further to serve its consumers better. Small businesses often struggle to include technology in their operations due to a lack of budget. But as their enterprise begins to grow and revenue doubles, they must think about improvement.
An enterprise can only stand out if its owner and sales team is proficient at retaining existing consumers, which is only possible if a business focuses on improvement. Such as, as soon as possible, an enterprise should take help from CRM Technology as it is the ideal way to bring improvements into businesses & help sales reps improves the process.
A brief discussion over Customer Relationship Management solution has been portrayed below, stating how it is a valuable subject for businesses, irrespective of their shapes or sizes.
What is the Value of a CRM in Your Business?
CRM technology carries colossal potential in giving 360-degree transformation to a business that might not perform well in the market before.
CRM Software is deemed as an integrated suite of technology, features, and options that focuses on customer satisfaction to maximise revenue, boost a company’s growth and customer data.
This software can also aid with the data storage of customers that the marketing or sales department can use to retain consumers. In simple words, the right CRM solution aims to nourish a company’s relationship with consumers that influence them to become a consistent buyer for an organisation.
CRM automates businesses which is emerging as a vital subject for modern project management. Whether it is a new startup or a well-established organisation, automation continues to evolve into the heart and soul of today’s business landscapes. However, reasons are self-evident.
Organisations are experiencing smoothness and swiftness in their workflows due to automation that has turned more helpful with CRM system integration. That’s how the presence of CRM is highly appreciable.
How do you Explain CRM System to People/Business Owners?
Modern business growth is no longer in the hands of a corporation as today’s consumers are more powerful and smart. Their positive response decides an enterprise’s survival in the industry.
According to a report by Microsoft, 66% of consumers aged between 18 to 35 come to an enterprise with a higher expectancy that the enterprise would treat them wise.
But this doesn’t conclude that positive and stronger relationships are a key to business success. A single consumer is enough to bring a drastic drop into a company’s performance. Zendesk report says that 95% guaranteed to tell other consumers about their bad experiences with an organisation.
At such events, companies should try to know the contributing factor that leads to bad customer relations. However, better than asking directly from a consumer, there’s no other great alternative above that. But the problem is only 1 in 25 unhappy customers share feedback on why they are unhappy with the services.
This is where adopting well-built CRM tools seems to be the most effective way out to deal with such problematic customer issues. CRM platform not just strengthens customer interactions with a company but also keeps customer data, including their behaviour and experiences. This customer data later helps the business world detect where their services went wrong or which department, employees, or employer is accountable for bad customer experience.
Let’s explore next to know the convincing strength of a CRM solution that encourages businesses to adopt CRM.
What can Encourage Businesses to Adopt CRM Solutions?
Here are the most prominent convincing points that encourage organisations to adopt CRM solutions as these benefits reflect Customer Relationship Management’s significance across today’s businesses.
A CRM can boost sales by 30%. However, this may sound like a minor percentage; still, it tends to bring a massive difference in large companies’ profitability.
A good CRM system helps detect the best consumers, which often act as a free marketer for an enterprise. If 91% of consumers share bad experiences with other consumers in the market, then 85% of these consumers also share their positive experiences with others.
Organisations working on a global level find it a lucrative opportunity. They mostly run loyalty programs for consumers, so they attract more deals into their businesses.
For instance- most startups choose referral programs to give a discount or a gift to the existing buyers who invite new buyers into their businesses.
Similarly, a company can strengthen its chain of marketers, which encourages new sales reps free of cost by leveraging follow ups, emails, and phone calls.
Promotes Decision Making
If the management of a company takes time to come across an ideal decision, problems may arrive. If a consumer faces any issue and approaches the company for its resolution, the consumer support team must give them a prompt solution.
At the same time, if the ultimate resolution takes a prolonged time to resolve buyers’ queries, it would undoubtedly yield a bad customer experience. However, such delays can also turn into a significant loss for the organisation.
But CRM proves to be a beneficial thing here as it centralises operations. Consumers can expect a prompt resolution for their queries and contact the right employee. The employee would be answerable to all such queries as the company has educated them thoroughly on dealing with such situations.
That’s how the whole CRM structure would work for decision-making, reflecting its significance across today’s business landscapes.
Unlike manual operations, CRM Solution is highly helpful in storing critical data of the buyers. For instance, these engineered solutions are capable of analysing the customer experience including buying habits. Along with that, this software even monitors those easily overlooked but valuable metrics.
For example, it denotes when most consumers purchase, the duration of the buyer’s spending on an enterprise website, etc. A human can care less about these significant metrics, but these are beneficial in understanding human behaviour.
According to global social media statistics, more than half of the world (4.66+ billion users) uses social media, and many of them actively spend hours on it. Beyond a doubt, people’s engagement with social media platforms is skyrocketing.
But it continues to draw businesses eyeballs as it has built a remarkable opportunity for company owners to attract the audience from social media networks to their digital businesses. But it is only possible if they are aware of their customers’ behaviour which has been made possible with CRM software.
How and when a consumer uses social media and lands on a website following a marketing campaign, businesses obtain clear insights into all such critical metrics.
The Integrated CRM System boosts efficiency in businesses. The owner of a company can instantly gain access to vital information about consumers whenever needed. The marketing team would also be able to use this helpful information to empower their marketing campaigns.
To simply put, excellent efficiency brings swiftness in the workflow that generates more leads for large companies. Signs of average return become apparent, making it a more productive environment for the entire organisation.
However, CRM also encourages automation in the workflow, which mitigates the probability of human errors. Automation isn’t just helpful in lead nurturing but it even cuts down the processing time across operations; similarly, an owner can experience a superior performance of his organisation.
If the company’s internal management is strong enough, the employees would be able to strengthen their relationship with new customers in the real world. This has been possible with CRM software that is even helpful in building long-term customer relationships with loyal customers.
Improve Customer Retention
CRM helps to improve customer retention and encourages them to become loyal customers for an enterprise. In simple words, CRM yields loyal customers for a company. It will be the biggest downside of an organisation if customers are consistent.
However, there can be some underlying reasons behind it.
Perhaps the competitor is drawing the attention of the customers or the working staff of the organisation isn’t friendly. There can be numerous reasons if an enterprise is unable to retain customers for a long time.
According to a report by Salesforce, a mere 5% increase in customer retention can maximise profitability for an enterprise by 25% to 96%. This is the power of consumer retention.
But how a business would make it possible. The solution is the CRM that helps an enterprise in analysing the consumer behaviour which is a crucial factor to know the tactics that retain customers for long hours.
An organisation can come up with solid content, product or service. If an organisation understands how their prospective customer reacts to a specific issue or insists them to take any action, the whole process turns instant.
But what are the key metrics an enterprise must consider when employing a CRM system? The below-detailed information illustrates everything on it.
How do you measure CRM Effectiveness?
Most business owners share the opinion that Customer Relationship Management software is beyond their affordability. However, it is an undying misconception among many new companies. Even though it is true that a CRM system comes at a certain cost, still, it is worth it because this expense aims at maximising the customer base for an enterprise which encourages profitability for the organisation.
Yet, a company can avoid such concerns related to CRM by paying attention to the critical metrics as stated below-
1) Churn Rate
Customer churn rate refers to the customer attrition known as an essential metric to measure CRM Effectiveness. As per this metric, the marketing team can identify the count of recurring customers during a particular time focusing period.
For example- to note down the churn rate of CRM, an enterprise compares customers’ visits from the month’s starting to the month’s ending. Suppose an enterprise has 100 recurring customers per month, but by the end of the month, there were only 90 customers.
At such events, the business owner subtracts the number of visits from the starting of the month to the end of the month, such as 100-90=10. Similarly, the obtained number is divided by the total number to derive the CRM data in percentage.
Such as 10/100 x 100 gives 10%, which concludes that a business lost 10% of customers this month on closing deals.
2) Length Of Each Sales Pipeline Stage
Lead nurturing is undoubtedly the core subject that a smart business owner can never fail to recall. But this subject isn’t just limited to drawing consumer attention, but how long a customer becomes a part of a sales process matters here.
In simple words, this analysis helps enterprises in finding the bottleneck of their sales process. Perhaps a marketing campaign isn’t appealing enough that it may retain the customer for a few seconds. But does it carry enough potential to direct that customer to another page or landing page?
This is where CRM systems make a special spot. As per this metric, companies can review the entire sales pipeline stage and detect those critical points where the entire sales process is losing its strength or becoming more effective in speed quickly.
3) Length Of Sales Cycle
The length of a sales cycle is one of the most critical metrics. It would be a negative sign for a business if a buyer is watching the product but doesn’t move ahead with purchasing. Such situations are more likely to happen in the following scenarios.
- a) when decision-makers are more
- b) when the cost of a product or service is a barrier
In simple words, if decision-makers are involved, buyers would find it hard to reach the end of the sales cycle. At the same time, if a product costs more than what a buyer anticipates, still he/she wants to buy it, a delay in the sales cycle arrives.
But customer relationship management makes the sales cycle more gainful as it identifies what consumers want and how a business can fulfil their demands.
4) Customer Lifetime Value (CLV)
This metric can help a business find loyal or golden customers ready to purchase anything from a company. This metric is predominantly based on the following points, which includes-
- a) Average purchase made by a customer
- b) Average customer potential to evaluate how much he can spend
- c) Average purchase frequency rate to evaluate how often they purchase
- d) Or average customer lifespan to evaluate for how long are they purchasing
Based on these 4 points, the marketing or sales manager can shortlist loyal customers. Similarly, a company can think about giving special offers as they fall into the best profitable customers category.
5) Customer Acquisition Cost (CAC)
In the end, the marketing team analyzes the critical metric-CAC(Customer Acquisition Cost). The metric is about the analysis, such as how much the company spent on marketing or sales processes to draw a significant portion of customers into its business.
These metrics provides a full-fledged detailed overview of the saving and time spent by the sales team to generate qualified leads. These metrics also provides insight into the tasks that can turn more effective if switched to automation.
Let’s Answer Some Frequently Asked Questions (FAQs):
Q1: How can I reduce my customer acquisition cost?
Answer: Here are a few ways to reduce CAC:
- Lowering marketing costs: Marketing is an expensive activity, but if the cost is too high and it’s not providing any ROI for your business then you should consider cutting back on your budget. This will help decrease customer acquisition costs by making them more affordable.
- Creating new channels: While there may be some risks associated with creating new channels of distribution, this can also lead to potential benefits such as increased brand visibility or boosting sales leads.
Q2: What is the lifetime value of a customer to me?
Answer: The lifetime value of a customer is the sum total of all money you expect to make from that particular customer over their lifetime with your company.
Q3: What is the length of a sales pipeline stage?
Answer: The length of a sales pipeline stage is the time it takes an individual to progress through that particular phase.
Q4: How do you measure customer lifetime value (CLV)?
Answer: CLV is a metric that predicts how much money you can make from your customer if they continue buying your product or service. It’s the sum total of all money you expect to make from that particular customer over their lifetime with your company.
To Calculate CLV, you’ll need to know the following:
- Average value of a customer (AVC)
- Number of customers you have today
Your average customer lifespan. For example, if your average customer life is one year and each purchase made by that person averages $100, then AVC equals $1000. If you currently have 1000 people who spend an average of $100 per year with your company CLV would be equal to 100000 ($1000 x 1000). This number doesn’t include any future purchases which could happen in years to come.
Q5: What is Customer Acquisition Cost (CAC), and how does it work in a business?
Answer: CAC is the amount of money that a company spends on marketing and sales activities to generate new customers. The metric shows which aspects of these processes are leading to customer acquisition, providing insight into what you should be spending your time on if you want more qualified leads.
Q6: What is best CRM for any Business?
Answer: If your company is large with thousands of customers, the CRM strategy must be for sales and customer service. Plenty of features exist to help schedule orders and track them through to completion, which is critical if you sell high-dollar items or services. Make sure you look for CRM systems that have an onboarding team, so every new client feels involved from the start.
Overall, It depends on your business needs and goals. To know which CRM is best for you, take a closer look at the Top 7 CRM selected by Technicali.
The Bottom Line
This article proves how a customer relationship management solution is helpful for an organisation. How CRM is valuable to a business, everything has been detailed in this article. A well-structured CRM network undoubtedly reflects how well an enterprise serves its customers. This, in return, promotes marketing strategies that reflect the growth of businesses.
Still, using CRM is subjected to numerous concerns for businesses that are easy to mitigate if companies review the right metrics at the right time. In the end, CRM will undoubtedly strengthen the core of a business by giving it a 360-degree transformation. However, the dollar spent may vary depending on the enterprise investment budget and services. But one thing is certain the CRM platform is also becoming a big reason for customer satisfaction.