What is customer relationship management (CRM)?
CRM systems are a way for companies to manage their interaction with current and potential customers. Customer relationship management software and strategy uses data analysis about customers’ history with a company to improve business relationships with customers, specifically focusing on customer retention and ultimately driving sales growth.
It’s a way to deliver branded messages and experiences at scale, while helping to make those interactions feel personal to the customer.
The need for customer relationship management (CRM)
Recognition of the need of customer relationship management from early on in a company’s life is often what defines the greats.
Think of Nike for a moment. In Shoe Dog, Nike founder Phil Knight details how he traveled to track competitions far and wide (as far as his car would take him and his time would allow) to sell his new shoes, get feedback from players and coaches, and then take that feedback to his factory to meet the expectations of those who would most want his sneaker.
The goal here is simple: win advocates within a niche in order to scale. And use CRM to stay organized, while keeping your employees from burning out.
What is an example of customer relationship management?
The above Nike story isn’t a pure customer relationship management example. It is, instead, an example of customer experience thinking, that hinges on proper customer relationship management at scale.
For a pure play example of customer relationship management, let’s look at an organization like Wells Fargo. Wells Fargo keeps track of banking for more than 70 million people, and they aren’t without competitors.
Sure, it’s inconvenient to change banks, but not impossible –– and takes mere days to do.
For organizations like this, with so much to lose, customer relationship management is crucial. Wells Fargo uses CRM to empower their 24/7 support team with information on individuals as needed when they call in (or email, etc.) so those reps can best help a customer.
What kind of information are they typically looking at within their CRM? Here’s just a few examples:
- Which products and services the customer uses
- The last time the customer logged in to their account
- The last time the person reached out to customer service, what that call was about, and how it was resolved
- Social media activity, if applicable, for the customer as they mention Wells Fargo
“We see the cloud as a way to help people connect around customers, to connect around building products, and to connect around risk management practices,” said Steve Ellis, head of the Wells Fargo Wholesale Service Group.
Their customer relationship management strategy is best measured by customer happiness and satisfaction –– and to deliver on high expectations there, a data tracking system available to key members of the company at the exact moment they need it (a good CRM tool!) is necessary.
The increased importance of customer relationship management
You don’t need to be a massive company like Wells Fargo to need good customer relationship management strategy and processes.
As customer retention becomes a key ingredient to brand growth, and as competition increases within nearly all industries, customer relationship management is more important than ever.
Here are a few things you can track using CRM:
- How you treat existing customers
- Which products you recommend to them
- Which email streams (or SMS streams) you have them in
- Which events you invite them to
- Which social channels you engage them on
All of this is important –– and one misstep, or lack of creative thinking, can give a competitor an edge. After all, sentiments can change within moments:
Customer relationship management, then, is more than just the tracking and measuring of a relationship –– it’s how you reinforce your brand, your beliefs, your positioning, and how you continue to build your tribe of fans (AKA customers) who bring more and more people like them into your mold.
“Consumers are always switching their preferences, losing affinities, and forging new passions for new product communities,” writes Web Smith on 2PM.
“In a battle for eyeballs, it’s important to remember that the distance between seeing and buying is actually lengthening as noise increases. A top funnel, performance marketing-driven sale is not as sure of a bet as at was just a few years before. As digital media has begun to understand the new economy (depth over reach), DTC brands should certainly follow suit. Positioning for longevity must become a key performance indicator. That way, a brand is less likely to lose its soul for a quick uptick in sales.”
Longevity is about how you treat your customers, and the better organized you are about the first-party data you collect, and the systems and processes you use to train employees and tell the brand story through customer engagement and retention, the strong your CRM muscle will be, and your lifetime value.