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Article 6 min read

Benefits and challenges of CRM marketing

Last updated August 27, 2021

We’ve all heard of customer relationship management – or CRM software, as it’s more commonly known. But what are the benefits of CRM, why should you be using one and are there any disadvantages? Let’s take a look at the pros and cons of CRM for your business.

What is a CRM?

First things first, what is a CRM system? It’s a type of technology that’s used by both small businesses and large firms to manage interactions between customers and new leads. It holds customer information in a database system that can be used to improve interactions, support sales and marketing, and much more. Usually, the goal of a CRM system is to help close leads, improve sales and grow a business. 

With a CRM solution, every customer interaction (both inbound and outbound) is tracked, whether that’s their first visit to a landing page on your website, a purchase, or an email you’ve sent to them. This makes it easier to understand the customer lifecycle. That, in turn, makes it easier for your business to tailor marketing campaigns towards your ideal customer and ensures your sales team, marketing department and customer support agents are all on the same page.

So what are the advantages and disadvantages of these types of systems?

Benefits of CRM systems

Better knowledge of customers

One of the main advantages of CRM systems is that they allow you to really get to know who your customers and leads are through the collection of business-critical data.

First and foremost, a CRM is a powerful marketing tool because it gives you all the information you need about your customers (or soon-to-be customers) at your fingertips. The CRM captures and organises the data of your customers and prospects, including contact data like their name, address and phone number, as well as demographic information and transactional data. 

That makes it easy to personalise communications with customers by understanding who they are, what they want, and what issues they may have experienced with your products or services in the past.

Better segmentation of data

One of the most powerful aspects of a CRM is the ability to drill down into customer data and segment it to personalise your communication with customers.

A good CRM enables you to easily break down all the data you’ve gathered into different categories to make lists that you can use for specific marketing campaigns or customer service support. There’s no need to waste time and money targeting people you know aren’t interested in a particular product or service. Instead, you can focus your time and attention on specific lists to gain the best results.

Better customer retention

With a CRM, your customer service teams have all of the interactions a user has made with your company – meaning you can more effectively deal with complaints or anticipate and solve issues before they become a real problem for your business. 

Customers will be thankful that they don’t have to explain their problem over and over again, as all the information is there in one place. As many as 94% of customers look to make a purchase from the same source they have done previously, so if you can effectively solve their problems with a CRM, you’re likely to benefit from this consumer loyalty. In fact, CRMs are thought to improve customer retention by as much as 27%.

Better anticipation of needs

You can use a CRM to create a more effective sales process by anticipating what a customer is likely to respond to best when cross-selling or upselling. You can confidently predict what items they’re most likely to purchase from the data, including what customers have previously bought, when they bought it and what other items were in their basket.

Better communication

When a customer gets in touch with a business, they expect a response quickly. In fact, 48% of consumers expect a response to social media questions and complaints within 24 hours and this high level of service is expected across all communication channels too. A CRM allows you to respond quickly to customers’ initial enquiries with customisable templates.

It not only improves the speed at which you can respond to customers, but a CRM the communication between teams as well. Sales, marketing and customer support all have access to the same up-to-date data so they can work in a coordinated manner on their own tasks, whether that’s marketing automation or improving customer response times.

Better data protection

A CRM ensures your business is GDPR-compliant when collecting customer data. Collecting and storing data manually leaves you open to the risk that you’re doing it wrong, which could result in hefty fines. A CRM system, however, will collect and store customer data in a way that is safe and in line with GDPR rules. 

It also allows for safer storage of customer data, so you can say goodbye to spreadsheets of customer information that isn’t password protected, or stacks of paper with important information on it.

Improved reporting

All of the data collected by a CRM means powerful reports with key sales and marketing metrics. Any good CRM will generate reports that offer you a comprehensive understanding of how your business is performing so you can quickly and easily spot any areas that need improvement and processes that need tweaking, as well as drivers of success.

Disadvantages of CRM

Team wariness

An unfamiliar tool and heaps of data – it’s easy to see why your team might be unsure of using a CRM to begin with. However, with the right training and access to mobile CRM and cloud-based CRMs that can be accessed from anywhere, staff are more likely to use and benefit from the tool. It’s actually been shown that teams who use mobile CRM solutions are nearly three times more effective at hitting sales quotas than those using standard CRM systems, highlighting the importance of making the tool easy to use for your team.

Dehumanising the sales process

Some traditional sales teams argue that CRMs take away the personal aspect of selling, leaving everything to machines instead. However, it’s important to note that all interactions using a CRM can be personalised to each individual – it simply makes it easier to reach out to the right people at the right time.

So there you have it, the main benefits and challenges of CRM marketing. Interested in finding out more about how a CRM can work for you? Take a look at our Zendesk demo today.

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