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Article 13 min read

Customer relationship management: a guide

By Mark Smith, Content marketing manager

Last updated June 4, 2021

Over the past 30 years, the term ‘customer relationship management’ (CRM) has evolved with the times – what was once seen as a tool designed to provide visibility into a company’s sales pipeline has morphed into something much more powerful.

At its heart, CRM is about managing current and potential customer relationships by collecting and analysing data. So while sales teams have long used CRM systems for tracking and evaluating leads, they’re now just one of many organisations that rely on the technology.

‘CRM as the industry thinks of it is a tool that was built for salespeople, but the new world of CRM software is not built for salespeople,’ says Jon Aniano, Product Vice-President for Zendesk. ‘It’s built for the customer, and it’s built for customer experience.’

That emphasis on the customer, and specifically a business’s relationship with their customers, has pushed CRM systems from their sales niche to a starring role in the customer journey. CRM’s key strength is its ability to provide a single, unified view of each customer, a direct result of how it can collect data from multiple tools and, critically, provide the kind of insights that can fuel proactive support.

So while sales teams still benefit from CRM technology, other teams derive just as much benefit from it, including customer service, product development and marketing. And importantly, a CRM solution can help break down internal silos, enabling teams to collaborate more effectively and serve customers holistically.

In this guide we’ll examine how CRMs help companies build relationships with customers, how that effort can improve business outcomes and customer satisfaction, as well as some techniques for managing the process.

How to build relationships with customers

Why should you build relationships with your customers? Simply put, if your business doesn’t, your competitors will. One of the driving forces in modern consumerism is the rising expectations of customers, who increasingly demand that companies provide an omni-channel support experience. When they contact a business, they want to be able to do it from any channel – phone, messaging, email, chat, etc. – and they want to know that the company serving has a clear picture of who they are.

By nurturing relationships with their customers, businesses drive engagement and loyalty. This is where CRM systems come into play. ‘We’ve got this exploding world of public social media, where basically the customer is in control of the conversation, they’re in control of their own experience and they have incredible expectations about what having a relationship with a company means,’ Aniano says. ‘We’ve gone to this place where companies know that they live or die by the actual long-term relationships they establish with their customers.’

As a result, Aniano says, the cloud-based CRM has become the place where the entire customer relationship – which is composed of customer interactions, or conversations – lives. These conversations can come from a host of channels, including social media, email and more. ‘It’s a place where these conversations are instrumented, where things are recorded and referenced, where a company can now truly understand the value it’s delivering to customers and how it can best maintain that relationship over time,’ Aniano says.

The understanding gleaned from CRM doesn’t just help large companies manage customer relationships – it can also play to the strengths of small businesses, highlighting their innate advantages in providing personalised service to consumers. ‘Small businesses today are in a world that is more challenging, more daunting, than it has ever been in the past,’ Aniano says. ‘The opportunity for a small business today is to provide a level of relationship that cannot exist between the business and the customer – that cannot exist with a large company.’

How good customer-relationship management can improve business

CRMs are particularly well suited to modern business, Aniano says, because many successful companies have transitioned – or are in the process of making the change – from focusing on simply increasing sales to recurring revenue models, such as with ‘software as a service’ (SaaS). So when future revenue depends not only on maintaining a relationship with a customer but enhancing the customer experience, having a CRM in place becomes crucial.

‘The initial sale is one of the least important interactions you’ll have with a customer over time,’ Aniano says. ‘So CRM implementation has moved from incentivising sales and creating sales efficiency to delivering the best customer experience possible and maximising the long-term relationship with the customer.’

And the wealth of data that a cloud-based CRM centralises for companies opens up opportunities for greater sales efficiency, proactive support and targeted marketing efforts, says Shawna Wolverton, Product Senior Vice-President for Zendesk.

‘One of the greatest benefits of CRM is that everyone can be on the same page about where you are with your customers – you can push out information, you don’t have to call,’ Wolverton says. ‘It’s not a phone call, "How’s the deal going?" You can log on, see the stages of all your opportunities. And especially as a manager, it’s being able to get a high-level view – "Yes, all the customers’ problems are being taken care of, all of the leads are being owned and addressed" – and to have that all in one place, and to have the ability to focus on other things and set up rules for when you need to pay attention. For example, perhaps you don’t care until the big deal closes. Perhaps you want to know why a case has been open for three days and no one’s touched it. With a CRM, you can set rules so that you don’t have to keep an eye on how your business is running – you only need to pay attention when things are going off the rails.’

Techniques for managing customer relationships over time

It can be tempting to think of CRM software as a solution in itself. But as Wolverton notes, if the techniques used by your business for managing customer relationships is convoluted and inefficient, no software tool will fix these problems.

‘The thing to think about with CRM is that it is as good as you decide to make it,’ Wolverton says. ‘The data that goes into a CRM is the data that comes out, so you need to make sure that for the people who are closest to your customers, it’s really easy for them to update the CRM. How many conversations start with, "Are you still at this address?" You want the people on the front line to be sure that customer data is good, but then allowing data to sit there is not particularly interesting – you need to get insights from the data with great reporting tools. You also need to take action based on the customer data – so you need rules and processes that make the best use of that data.’

Beyond making it easy for employees to update customer data in a CRM, companies need to think about whether a CRM can automate routine tasks. The time savings gained from automation can then be redirected into more proactive, hands-on support.

‘With CRMs, you think of customer service – a lot of it is about people wanting refunds, or they want to update and change something, and these things often need approval,’ Wolverton says. ‘How can you automate some of these processes? You don’t want to bring your junk drawer into your CRM solution. It’s a good time to look at your business and the systems that are working, as well as the ones that maybe aren’t. Think of all the "painful" areas that you have and see whether perhaps there’s a solution for that in your new CRM system.’

Meanwhile, managing customer relationships over time requires clear, actionable reporting about the entire customer journey, from prospects in the sales pipeline to common pain points for current customers.

‘If you’re not thinking about the value that you want to get out of a CRM, and a sort of ideal state for the information you want to know – I think it’s great when you’re starting with a CRM to understand the reporting questions you’re going to have and then work backwards,’ Wolverton says. ‘These are some of the best ways to think about how to design your CRM – it’s about knowing which answers you’re looking for. Or even a problem you might get – for instance today, we have no idea what our pipeline looks like – we do not understand why we get spikes in customer-support calls. It’s about being able to see success as milestones in your road map, being able to answer some of these questions and gradually rolling out a system that gets you there.’

The best CRM software to help with customer-relationship management

So how will you know which CRM software solution is right for your business? The range of options might seem daunting, but arming yourself with information – as well as having a clear understanding of your business’s requirements and existing processes – can make the search easier to manage. Wolverton says that companies should consider a few important factors: ease of implementation, the availability of product support and reporting functionality.

‘The range of CRMs is very large. Some of them are difficult to install – that’s still a problem – and others are difficult to configure,’ says Wolverton. ‘How easy is it to get started? How available is help? Is there someone you can chat with or call while you’re getting started who can help you out? What type of thing are you trying to solve? If you want to get CRM software for some insight into where your product or service is doing well, or, on average, how long it’s taking to close deals, then you probably want to make sure that some sort of reporting function is part of the CRM that you’re buying as well.’

When selecting CRM software, it’s also critical to consider how it aligns with sales, marketing and customer-service departments – for example, does it provide the kind of pipeline visibility required for sales teams and the leadership? Does it enable marketing automation, making it easier to understand how to create targeted messaging based on past customer conversations with loyal customers? Marketing automation, paired with popular tools such as MailChimp, can lead towards increased sales, as customer data will provide insights into which pitches will resonate with customers.

For example, a CRM with advanced marketing automation can enable teams to automatically track which messages have the best customer engagement and also send offers based on customer-service history and a customer’s journey with your company. This makes it considerably easier to tailor messages that, in turn, will have a greater chance of being converted into sales.

Will you have the kind of CRM tools on hand that will help boost customer engagement via proactive messaging, as well as connect with potential customers?

Beyond that, Aniano says, make sure that you consider ease of use. A tool that’s cumbersome and difficult to customise will stand in the way of nurturing customer relationships and will harm productivity. ‘Beyond being the record of customer interactions, CRM systems need to have toolsets such as workflows, custom fields and tagging to allow you to act on the customer experience and the customer relationship where it’s most important to your business,’ Aniano says.

Keys to successful CRM implementation

When implementing a CRM solution, think about how much you can do on your own – can you set the system up yourself or will it require on-site help? If you can’t handle it in-house, expect future support costs and limited ability to customise the platform to your requirements, especially in a timely fashion.

‘If you are a small business and you need a CRM, you had better be able to sign up for a trial and get it up and running for a use case, and connect it to one or more business tools, on the first day,’ Aniano says. ‘If that’s something you can’t do as an enterprising business owner, as a key employee at a small company, then that’s a red flag. If you end up having to call Sales, call a technical expert, just to get the simplest use case going as a small business, then that’s probably going to prevent you from delivering the best customer experience or delivering on your vision of the CRM – if you don’t have the resources now, you’re not going to have them in six months’ time. The best indicator of CRM success is day-one to day-five success as you go through that trial.’

Especially for small businesses, which might be relying heavily on tools such as Quickbooks, Google docs and Dropbox, Aniano says, it’s vital to consider just how a CRM solution will integrate with the existing tools.

‘When you’re buying a CRM, which might be the second or third technology purchase you make, you had better hope that it’s pre-integrated with the other tools that you use,’ Aniano says. ‘Because as a small business, you don’t have the time, and you certainly don’t have the resources to be carrying out heavy implementation and integration yourself.’

And while choosing a CRM that’s customisable should be a priority, this doesn’t mean that you should go overboard during implementation, Wolverton says. ‘With any CRM, the ability to customise is incredibly tempting,’ she says. ‘Customisation is great, but it should always be used sparingly. You can end up in a place where you’ve created a data record or a process where I’m sure you want 300 fields from everyone interacting with your CRM, but they’re just going to stop using it.’

This means that when building out your CRM, adopt the mindset of a business-transformation consultant – and a user-experience expert – and then test, test, test. ‘It’s always good to say, "Hey, we built this. Does it work?”’ Wolverton says. “Does it feel right to the people who are using it, before you roll everything out in a big way? Don’t overwhelm your users. Make sure that you’re constantly going back – I think people sometimes think that once you set up a CRM and get going, that’s it. It’s a perpetual process. You want to make continuous improvements, make sure that you’re continuing to use all of the functionality that you set up. The great thing about SaaS and online CRMs is that new features are coming out all the time – and you get them as part of your subscription. It’s great to give yourself time on a regular basis to understand these new things and how they could benefit your business.’

Learn more about how customer-relationship management software can help your business better serve your customers.

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