What Is CRM Software and Why Do Companies Use It?
By Indeed Editorial Team
Published October 21, 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
As organizations develop and continue to grow their customer base, they may benefit from using professional tools to organize their communication with customers and identify valuable information about their target audience. Companies may use CRM software to carry out these initiatives and improve their methods of data analysis. Understanding what these systems are and how they can impact a business can help an organization determine whether they want to use them. In this article, we review what CRM software is, discuss different types of these systems, outline various uses for this software and highlight its benefits.
Related: What Is CRM?
What is CRM software?
Customer relationship management (CRM) software is a tool that businesses can use to sort and organize their client data to improve customer experiences and develop a better understanding of their target audience. Clients can use several mediums to interact and communicate with brands, including social media, messaging and email, which means it may be more challenging for a business to analyze all points of contact with their clients.
CRM software can help an organization track consumer behavior across channels and streamline client data to yield information regarding their preferences and concerns. This can be a particularly useful tool for companies that market a variety of products to multiple audiences, as it helps them manage several kinds of customer relationships and interactions.
Types of CRM software
The CRM software an organization selects may impact the features they use and the focus of their information. These are the primary types of CRM software:
Operational CRM software
Operational CRM software can help simplify an organization's customer communication and relationship-building processes. They may provide professionals with the tools to understand and address all aspects of the client's buying journey and accounts for various touchpoints or moments of communication throughout the process.
These systems may provide professionals with a variety of automation services, including sales automation, marketing automation and sales automation. This can help a company's employees have more time to handle the aspects of their role that require personalization or customized conversations and allow the software to streamline interactions. It can also allow a rapidly developing company to handle all incoming customer requests and inquiries in a timely manner.
Related: What Is the Meaning of CRM?
Collaborative CRM software
Organizations can use collaborative CRM software to help employees across several departments feel more connected and have access to the same information and customer data. This may particularly benefit large organizations with multiple offices or locations, as this can also create a geographical separation between employees in addition to their differing roles and responsibilities.
By organizing and tracking all consumer data, collaborative CRM systems help ensure that all employees can access up-to-date information, regardless of their location or department. This can provide customers with better brand interactions because employees in one department can access a client's previous interactions with a professional in a different department, allowing for efficient communication and preventing the client from repeating information they already discussed.
Analytical CRM software
Analytical CRM software can help an organization perform data analysis and learn more about their current customer base or target audience. While companies may be able to collect data easily, this software can help them understand how to turn this information into actionable steps to yield more sales and higher levels of customer satisfaction.
It can help an organization recognize consumer trends and adapt its marketing strategies to cater to consumer preferences, including peak times for website traffic or products that appeal to the widest consumer demographic. This may allow a company to understand the steps that lead to successful lead acquisition and sales.
Uses for CRM software
There are a variety of ways a company can use CRM software, such as:
Tracking consumer behavior
Companies may use CRM software to identify and track consumer behavior and to provide support for their sales efforts and lead generation. If an organization uses CRM software that integrates with the social platforms they use, it may also help them track email responses and other streams of communication with the brand. This can provide a business with a deeper understanding of the consumer buying cycle and understand what some prospective clients may require to purchase its items or services.
Managing their business
CRM software can assist with business management because it allows all the organization's data to exist in one place, rather than storing the information in various documents, notepads and employees' individual tracking systems. This can help a company understand what customers may require to proceed with a sale. It may also allow various departments, including sales, customer service and marketing, to perform more efficiently and address consumers' concerns or priorities effectively.
Integrating social platforms and other services
CRM software may integrate with an organization's social platforms and other communication services, such as SMS messaging and loyalty programs. This integration can allow a business to deliver targeted messaging and email campaigns that address prospective clients' requirements and priorities. Integration can also help employees understand the growth of an organization or prepare for future trends in development.
Conducting data analysis
While various software options may be able to provide an organization with analytics, companies may benefit from selecting a CRM software that creates easy-to-understand snapshots of data analysis for each department or team. They can then use the data to develop their brand based on the results of sales calls, email newsletters or advertisements, marketing campaigns and communication via social platforms. Data analysis can also help keep a team informed about the products they sell, the demographics of their audience and the aspects of their website that receive the most engagement.
Targeting marketing initiatives
Using data related to consumers' buying habits, an organization can develop a marketing campaign that's more likely to attract attention and encourage engagement. Because CRM software can document every website visit or social media interaction, businesses can use this information to notice what aspects of their messaging work well and what areas may benefit from improvement.
Targeted marketing can include automated workflows based on consumer actions, where professionals create automated messages for various situations with clients. For example, if a prospective customer visits your website and puts items in their cart but leaves the site without making a purchase, an organization may create a system to alert the individuals via email or text about the remaining items in their cart.
Professionals can use CRM software to support sales and address various stages of the sales cycle, including lead generations, outreach and negotiation. This software allows organizations to prioritize their sales according to the potential opportunity it may yield and oversee several aspects of their workflow. For example, sales tracking and management for an online retailer may include a categorized sales report that highlights sales according to the salesperson, the time of day, the location and the customer's purchasing history with the company.
Overseeing task execution
CRM software can help business leaders manage task execution and simplify project management to perform more efficiently, allowing them to improve productivity and save time. It may also allow an organization to prioritize client contacts and address consumers' next steps to streamline the purchasing experience and address any concerns that may inhibit future sales. This means that adequate CRM software can allow professionals to connect specific projects, interactions, meetings and additional workflows to individual contacts, and assign tasks to employees accordingly.
Executing predictive analysis
Predictive analysis can help an organization track consumer behavior and forecast their responses, allowing the company to prepare for prospective clients' requirements or concerns. CRM software uses predictive analysis, a type of AI, to analyze existing customer data and evaluate how successful a marketing or communication may be with an organization's target audience. When marketing teams use CRM predictive analysis, marketing professionals may encounter suggestions for predictive text or proposed workflows that contact clients based on their previous engagement with the company.
Benefits of CRM software
Here are some benefits of using CRM software:
Increasing sales and revenue: CRM software can help an organization increase its sales and revenue by providing an in-depth understanding of the most effective marketing strategies and highlighting the modes of communication that have the highest impact. It may also allow a company to develop a business pipeline and automate crucial tasks.
Improving customer service: By focusing on customer relationships, organizations can increase awareness regarding clients' demands and preferences, and improve their customer service processes accordingly. CRM software can gather important consumer data and make this information available to all customer-facing employees.
Boosting productivity: An organization may use CRM software to boost employee productivity and efficiency by automating interactions that don't require personalization or human interaction. Then, staff can devote their attention to other necessary tasks and improve their productivity rates while communicating with customers efficiently.
Growing customer retention rates: Businesses can improve customer retention rates by utilizing CRM software, and it may help them encourage client loyalty. CRM systems can provide automated responses, sentiment analysis and consumer behavioral tracking to identify client issues and resolve them before the consumer finds an alternative brand.
Organizing and simplifying internal communication: CRM software can simplify and streamline communication within a company, and connect staff across departments. Because it allows all customer information to be stored within the same software, employees can gain an understanding of how other departments handle client interactions.
Managing interactions with sales leads: Understanding how to accurately nurture and develop leads can help an organization increase its revenue and profits, making this an important aspect of sales. CRM software can manage and track an organization's interactions with leads and identify the practices that are most effective at closing a deal.
Enhancing the accuracy of predictive analysis: Using historical data to review sales performance can help an organization create and implement effective changes to its marketing strategy. CRM software can enhance the accuracy of a company's predictive analysis, allowing them to know what to expect from upcoming sales cycles.
Explore more articles
- How To Share Retail Experience During the Application Process
- 30 Strategies To Help Managers Retain Talent
- Learn How To Make a Plan for Your Career Goals
- How To Fax a Document Through Different Devices
- How To Brainstorm Ideas for a New Company or Startup
- What Is Tree Testing? (Plus How To Complete One)
- What is an Osteopath?
- What Is a Punch List? (With Tips and Example)
- How To Add Error Bars in Excel (Plus Why They're Useful)
- 7 Ways To Lead and Inspire Others To Want To Follow You
- 34 Onboarding Tools for Your Business
- What Is CPU? (Plus Elements and Key Functions)