Customer Relationship Management Software
Introduction to CRM Software
Increasing sales is one of the most popular business topics ever. However, very few companies know what the "magic sauce" is to help people become customers. This page helps answer questions about how to communicate better with prospects and customers. If you are looking for ways to increase sales, implementing a customer relationship management software can help.
What is Customer Relationship Management?
CRM is a fancy way of saying "staying in touch with the people who matter most in your business - your customers." A better definition is "a system for managing relationships with customers." Customer relationship management has been around as long as sales has.
Before the internet, salespeople kept index cards on who was a "hot prospect," who needed 30 days, and so on. Sales calls were prioritized on who would be most likely ready to purchase sooner. It wasn't a very elegant way of keeping up with prospects but it worked.
Sometime in the late 1990s/early 2000s, the evolution of the internet redefined the role of the traditional salesperson. Email marketing came along and further reduced postage costs. Companies reduced or eliminated travel costs since technology made virtual meetings possible. The hope was that the internet would help make sales easier.
Back then, a salesperson called by telephone, sent postcards and birthday cards by "snail mail," and made personal visits. Early CRMs reminded salespeople of birthdays and other important dates. It also allowed salespeople to plan their sales day. This was much better than the "flying-by-the-seat-of-the-pants" old days of selling. Salespeople were more organized and closed more sales. By closing more sales and staying better organized, salespeople could also reduce the costs of doing business. Early CRM's were more about contact management than customer relationship management.
The Purpose of a Business
Businesses have been around since the beginning of civilization. There are many different theories of why businesses exist. Some people say that businesses exist to supply jobs to the workforce. Some people say that businesses exist to supply a return on investment to shareholders and stakeholders. However, the best purpose of a business is to solve a problem for customers. The process of solving a problem for someone requires some form of payment. In modern times, this is payment in monetary form. This is called a sale.
A sale is made when people have a problem that they are convinced that a business can solve for them and they are willing to pay the business to solve their problem. Only then are the customers willing to part with their money to solve their problem. In the process of closing many sales, the stakeholders and shareholders turn a profit if their services are priced over costs. If the sales start to multiply, then hiring can occur to grow the business, and profits are reinvested into the operation of the business. However, none of these things can happen until a sale is made.
“Nothing happens until a sale is made.”
-Thomas Watson, Sr., President of IBM, 1914 to 1956
How to Sell More
Before the internet, selling was more personal. To sell, something, you had to get in front of your prospect. Many times, this meant physically in front of your prospect. The salesperson knocked on a door and introduced themselves. They smiled and offered a handshake. The rule of the day was that people buy from people they know and trust. The internet has changed how we communicate but this rule has never changed. People still buy from people (or websites) they know and trust.
The rule of the day was to spend as much time with people as possible to get them to like you. Then, this increased the chances of getting the sale. Taking people to lunch or dinner was commonplace. The more contacts you made with your prospect, the better your chances of moving the relationship towards the ultimate agreement - a sale.
People will be more eager to solve their problems, especially if not fixing this problem will lead to even bigger problems. For example, fixing a hole in the wall of a house is more of a time-intensive sale, especially if winter is coming. Trust is still key though. People will live with a problem until they find a solution provider they like and trust.
In today's fast-paced world, practicality is the rule. People with a problem search solution providers until they find a solution they know and trust. In this case, people usually websites. If your website doesn't build trust in the consumers' eyes, your sales will be lackluster. In digital marketing, a split second can make or break a sale. A website with even a slightly slower load speed could cost credibility and sales. This is why today's marketers stress the importance of page load speed as a factor of credibility.
Components of a Sale
Sales don't just happen by magic. It is the art and science of getting people to know, trust, like, and ultimately do business with you. Some factors can affect how you close sales and it's important to keep this in mind. Traditionally, the components of a sale were the initial contact, appointment, presentation, follow-up, closing, and the post-sale follow-up.
In today's world, these are not as clear-cut as stages of the sale can overlap depending on the product or service offered. Here are a few of the more complicated aspects of making a sale.
1. Sales Urgency
How important is it that your prospect solve their problem right now? If there is a hole in their roof and winter is coming, your prospect will be more likely to spend the funds necessary on a new roof faster than they would be to buy a new sports car. The sense of urgency of finding a solution for the customer's problem can help decide how fast a sale is made.
2. Sales Cycle
Some products or services sell quickly and some take time to sell. Many large ticket products or services such as airplanes or construction services can take months or even years to sell. When it takes time to sell your product or service, you need to communicate with your customer why you are the best solution in the marketplace to solve their problem.
Perhaps your sales cycle is shorter or people buy what you sell as an impulse purchase. Jewelry is sometimes considered an impulse purchase. Your prospect sees something they want and they buy it on impulse. In this case, CRM software can help salespeople stay in contact with their customers to remind them of where to come when they are thinking about buying jewelry in this example throughout the year.
3. A Clear Value Proposition
How you communicate creating value for your customer is a huge factor in whether or not you make a sale. If you don't have a clear message of the value, there will be no incentive to buy from you. "What's in it for me (your customer)?" must be clearly communicated to your customer. If your value proposition isn't clearly communicated, your prospect could get frustrated or confused. If that happens, they won't buy from you.
For more information on other factors that can keep a sale from happening, check out this article on sales tactics to abandon in 2020.
The Basis for Digital Marketing
Many different tools make up digital marketing. It means that if you are marketing on the internet, it is called digital marketing. Search engine optimization and marketing, email marketing, content creation and management, web design and development, and many other activities make up digital marketing.
Customer relationship management software is made for digital marketing. A good CRM can help a sales staff keep up with when the last time a sales rep called a customer, what was said, and what the next steps are. A good CRM will also keep track of emails, when or if they were opened, what the reply was, and more. Keeping track of these activities is how sales are made.
A good CRM is "deal-focused." The purpose of sales isn't just to keep having conversations with your prospects. The main reason you call them is to make a sale happen. After all, nothing good happens until a sale is made.
Which is the Best Customer Relationship Management Software for Your Business?
Looking for a great CRM to help your company close more sales? There are many different CRMs in use today that say they are the best. Here are some factors to consider when choosing a CRM for your company.
Is the CRM you are considering for your business cost-effective. One of my favorite CRM's in 2000 was purchased by Oracle and was quickly priced out of my budget. That CRM is still out of my budget years later as they cater to larger companies. Does it provide a host of benefits compared to its financial costs?
2. Ease of Use
Back in the day, salespeople were not the most tech-savvy people. Although times have changed, your CRM must be easy for someone who is not "tech-savvy" to use. It must be streamlined and the UI must be simple to use.
3. Easily Customizable
Every sales process is different for every company. If you have a long sales cycle, your focus will be on making every sales message and interaction count. If you have a shorter sales cycle, your focus may be on follow-up sales or getting "second money." Your CRM must also be customizable to your sales process.
4. Room for Automation
A CRM software is designed to help you save time and work more efficiently. Automation can help you do that. Your CRM has to do more than remind you of when to make an important phone call. If it could be used to send automated emails at a certain time, even better! And what if you could build an automated sequence of emails for each prospect? An automated CRM can help you work smoother and help you send the right message to the right prospect at the right time.
As your business grows, your CRM must be able to grow with it. This is what scalability is all about. Is your CRM customizable to the degree that it will grow in capability and volume as your business grows?
Customer relationship management is more than just contact management. That is a big part of what CRM does. Today, CRM can manage the relationship between sales members and prospects to help move the relationship to the ultimate agreement, a sale.
One thing that a CRM software can't do is make the sale for you. You still have to put in the activity to keep your proposition in front of your prospects and find your buyers.