CRM: Customer Relationship Management

What is a Customer Relationship Management (CRM) system?

Customer Relationship Management (CRM) means different things to different people. For some, a CRM system refers to sales automation and contact management software. For others, CRM systems focus on customer engagement, serving as a single hub of information on all past, current, and future customers. So what is CRM really supposed to do?

Since it is 6-7 times more costly to acquire a new customer than it is to retain an existing one, it's important to have a system that puts the "R" in CRM. Relationships drive business growth, and every interaction a customer has with your brand contributes to that relationship. Great CRM tools are more than just a data repositories -- they help companies build customer relationships.

It costs 6-7 times more to acquire a new customer than to retain an existing one.

Benefits of a CRM

Smart CRM tools improve the efficiency of customer service agents by making their jobs easier, providing guidance and contextual customer information at their fingertips. Response accuracy and speed are improved when the CRM supplies answers straight from the company knowledgebase. 

When connected throughout the customer journey, a CRM can also provide a more consistent customer experience by providing a 360-degree view of the customer. No matter what channel a customer uses to communicate or who she speaks with, all of her past history is readily available and can be used to provide a response with the appropriate context and personalization. 

Do you need to replace your CRM system?

If your brand is relying on CRM software to maintain and nurture customer relationships, you need to evaluate it against some key factors. Could you confidently answer "yes" to the questions below?

Does your current CRM system...

• Make it easy to handle all incoming customer complaints and questions, seamlessly transitioning between multiple communication channels as needed?
• Have the flexibility to add future communication channels as they become popular with consumers?
• Guide agents through tasks, presenting helpful and accurate information tailored to each customer interaction?
• Simplify the user experience, so agents can spend more time having high-quality, empathetic conversations?
• Reduce agent training time and turnover while improving customer retention?
• Provide voice of the customer insights that can inform strategic business decisions?

If your answer to any of the above was "no" or "not sure," it may be worth evaluating your current CRM tool. Check out this Buyer's Guide for further details.

ROI for implementing a CRM

A customer engagement CRM system delivers return on investment in many ways: increasing agent efficiency, reducing contact center turnover, improving first contact resolution rates, and driving higher customer retention. Using a smart CRM solution, companies can:

• Cut call handling time by 25%
• Increase response accuracy to 97% or more
• Improve first contact resolution by 25%

Brands who see this level of improvement have implemented a customer engagement CRM that uses a built-in knowledgebase fueled by natural language processing technology, which increases the speed and accuracy of responses. Best-in-class CRMs also feature on-demand contextual information about each customer that allows agents to provide more personalized, helpful interactions.

Importance of a CRM to your customer experience strategy

No customer experience (CX) strategy can be successful without insight into what the customers are actually experiencing! To have this insight, brands need a single, unified view of their customers. CRM systems serve as the hub for all customer information -- account details, purchase data, interaction history, etc. 

An advanced CRM can take information even further, using the big data contained in the system to deliver reporting and analytics about customer trends and potential threats.

Smart CRMs

Smart CRM software guides customer service agents through every interaction. By linking to a knowledge management system (KMS), even brand-new employees can answer a wide range of customer questions. Sophisticated CRMs can dynamically present the right fields on the data entry screen and provide in-context information based on the customer's situation, making customer interactions simpler and quicker for all involved. Using natural language processing, CRM software can automatically suggest the appropriate next step based on notes captured by agents.

Smart CRM systems can increase response accuracy to 97% or more.

Another way smart CRMs make an impact for brands is by ensuring a continuous, omni-channel conversation with the customer. For example, a customer may ask her question in online self-service chat and get a conversational response from a virtual agent, but then choose to escalate to a phone call. The live agent answering the phone should be presented with in-context information (such as the customer's name, account information, and recent conversation history) so he can pick up exactly where the last interaction left off. This makes the transition frictionless for the customer, leading to higher satisfaction and retention.

Common challenges with CRM tools

Companies implementing CRM systems can often run into challenges. Common issues include:

• Integrating the CRM with other systems. Customer engagement software works best when it can gather pertinent information from other business systems, such as account data and purchase history.
• Connecting multiple communication channels. Today's customers live in an omni-channel world, where an interaction that begins on their mobile device could continue on a website or a phone call. They expect transitions to be seamless, with each touch point picking up where the previous one left off.
• Expecting the CRM system to go beyond its capabilities. Many CRM solutions on the market were built as sales force automation and contact management software, not customer engagement. It's not uncommon for companies to implement a sales-oriented CRM, then become frustrated when the system cannot handle their customer engagement needs.

Insights that can be gained from a CRM system

Your CRM system contains a lot of information about your customers. Reports and analytics allow you to glean insights from this wealth of information that can inform decision-making. For example, a CRM can show you:

• How the organization and individual agents are performing against key service metrics, such as hold times, call length, first contact resolution, etc.
• How susceptible the brand is to customer fraud in the form of goodwill abuse, identifying repeaters and mitigating risk
• Which products are receiving the most complaints, potentially signaling the need for a re-design or recall
• What is top-of-mind for your customers, since smart CRMs can categorize natural language inputs to generate a voice of the customer analysis

Workflow automation within a CRM

Having a single, unified system for all customer information is critical, but a CRM also needs to have automated workflows to keep the entire team working effectively. For example, if an agent offers an unhappy customer a coupon, the agent should be able to send the coupon with the click of a button. Keeping the customer care team organized and maintaining customer history in one place ensures fast response times, which have been shown to increase customer trust and loyalty.