Customer relationship management (CRM) refers to methods and tools that you use to ensure good customer relationships.
Software that’s used to manage and analyse customer data is usually called a CRM tool or system.
As your business grows, it becomes more difficult to cultivate and oversee client relationships without the help of a CRM tool.
See also: How to build great relationships with customers
What does a CRM tool do?
It helps you grow and manage your client relationships. They’re used by both customer service, sales, and customer success departments.
It gathers
- a client’s contact information
- all the communication your business has had with the client, such as sales calls, customer service enquiries or marketing emails that they’ve received
- notes made by employees
It can also show all the invoices you’ve sent to that client.
Why is it useful?
A CRM tool can be useful both for large companies, small businesses and startups. Here’s just some reasons why:
- CRM tools improve the customer services and sales process—every employee who reaches out to the client, has the client history at their fingertips
- CRM tools centralize all your data in one place. The data can be used to create reports, analyse performance and to make strategic decisions. You can, for example, easily identify your biggest customers, and pinpoint what makes them such big customers. Then you can focus on selling your product or service to similar customers.
- Using a tool can generate more revenue: You ensure that deals are followed up on, and can see whether customers churn and why.
- CRM tools are a way to story data that doesn’t depend on individual employees. If employees leave, you won’t lose any important data.
If you don’t want to purchase a dedicated CRM tool—and you run a small team, or maybe you are your sales department—you can do the same thing in Google Docs or Excel, but you’ll have to be more meticulous with recording things as none of it will be done for you.