September 13, 2022

Relationship Management: Definition and Guide

People.ai
Relationship Management: Definition and Guide

CRM technology has proven to be an essential part of modern sales strategy, and it’s projected to rise in value in the next seven years too. By 2028, it’s set to reach an approximate value of $128.97 billion.

Today, 91% of companies with 10 or more employees utilize a CRM system. Why? For one, the average ROI on CRMs today is roughly $30.48 for every dollar spent.

But what exactly is CRM and how can it benefit your business? In this comprehensive guide, we’ll answer all of your questions about CRM and show you how to start using it for your business.

What Is Relationship Management?

Relationship management is a process in which companies foster positive relationships with their customers or business partners. To do this, relationship managers collect and analyze customer data to find trends and issues that could be useful for improving client communications.

To be successful, a good client relationship manager needs a fair amount of emotional intelligence, interpersonal skills, negotiation skills, and a strong aptitude for analytics.

There are two types of relationship management:

  • Customer relationship management (CRM), which focuses on individual customers
  • Business relationship management (BRM), which fosters productive relationships between companies and their business partners (e.g. vendors, distributors, suppliers, etc.)

What Are The Customer Relationship Management Benefits?

At a time when more people are looking for a personalized customer experience, companies need a holistic approach that goes beyond just transaction-based business models.

Customers are more likely to continue supporting a company that they have a personal connection with, feel they can trust, and treats them as more than just someone to make money off. When customers forge those connections with a business, they are also more likely to share their experience with their peers, essentially doing the marketing work for them. This can bring in new potential customers and new sales.

Another key benefit of maintaining a good relationship with customers is the potential for an open communication channel where customers can share feedback and insights, helping companies improve the way they do business. This can keep companies from making the same mistakes for months on end, saving them millions of dollars at the same time.

What Does A CRM System Do?

To foster relationships with customers and/or businesses, companies need data – who buys what, when they’re more likely to make a purchase, who or where they make most of their purchases from, whether they come back as repeat customers, and so on.

CRM systems consolidate customer data into a centralized location, eliminating some of the inefficiencies and human error that come with manual data entry. CRM systems can collect, store, and analyze customer data such as contact information, email/phone calls/online chat/customer support interactions, purchasing history, referrals, and more.

But CRMs are more than just an address book. Most CRMs can also be integrated with other organizational tools such as email, calendars, list-making software, and the like.

By providing sales, customer service, and marketing automations, CRMs can ultimately speed up sales reps’ workflows. For example, CRMs can send preset responses to customer inquiries, send follow-up messages to prospects who don’t respond to messages, report tasks to sales managers, log hours, and track communications between reps and customers.

Some examples of CRM software include:

1. Salesforce

Salesforce is one of the most popular CRMs on the planet. According to its site, Salesforce can help businesses integrate every part of their company that interacts with customers into a centralized CRM platform.

One of the big advantages of Salesforce is its ability to scale alongside the growth of your business. That way, you don’t have to worry about having to replace your CRM even as your business needs change.

2. Pipedrive

Pipedrive was rated the number 1 CRM by TrustRadius. It allows users to manage leads and deals, track calls/emails/contact history, automate tedious administrative tasks through artificial intelligence, and integrate sales enablement third-party apps.

3. Zoho CRM

Zoho is a good option for small and medium-sized businesses. This CRM is known to be user-friendly, making it great for sales teams with older or less tech-savvy reps.

4. Oracle CRM

Oracle CRM is an intuitive and easy-to-use software with a robust feature list. Most businesses that use Oracle don’t feel the need to buy additional software – this comprehensive software has everything you need and more to successfully maintain your relationships with your customers.

Oracle CRM has three integrating clusters of applications for marketing, sales, and customer service functions.

The Different Kinds Of CRMs

There are three distinct types of client relationship management systems:

Operational CRM

Operational CRMs are responsible for generating leads and converting them into contacts. They also capture all the necessary information about each contact, so that it can be used in future marketing campaigns or business decisions.

Analytical CRM

Analytical CRMs analyze data from current customers that was gathered throughout various stages of the customer journey. The role of analytical CRMs is to provide companies with data-driven insights that help them make more informed decisions.

Collaborative CRM

This client relationship manager type allows different departments to share customer information. With all customer data, customer complaints, and issues stored in a centralized platform, departments can work towards a unified goal, foster better relationships with clients, and boost customer loyalty and acquisition.

Why Do You Need A CRM System?

Here are four ways businesses can benefit from adopting CRM systems:

Get A Better Understanding Of Customer Health

CRMs provide a variety of tools to customer service representatives and customer relationship managers. One of the most important tools is the ability to have a 360-degree view of customers’ data and behavior.

Most of these CRM software tools will consolidate everything in a centralized dashboard, where reps can pull up a customer profile to view their purchase histories, order status, outstanding issues, and more in a matter of seconds.

With customizable platforms – as most CRMs are – sales reps can choose what kind of customer data is essential to track, make more accurate decisions, and improve the way they relate to their customers.

Optimize Campaigns Using Data Gathered With Artificial Intelligence

With the right CRMs and sales enablement tools, sales reps can have access to a treasure trove of digital insights. These insights guide reps to make more accurate forecasts and gain a more exact understanding of the way customers move through the sales pipeline, taking the guesswork out of sales.

Revenue intelligence software such as People.ai can even supercharge CRMs by capturing, enrichingsynchronizing, and unifyingmanaging data across several customer-facing platforms at once, giving businesses the power to unify their data and eliminate data silos across teams.

With near-complete, up-to-date, and centralized information about prospects, existing customers, suppliers, vendors, and all other relevant parties, sales reps can fine-tune their campaigns, conduct more effective customer segmentation, and target just the right types of people for their goals.

They can also strategize to convert or remove an unproductive contact, improve relationships through marketing efforts, or even make major tweaks in their business strategy.

Provide Better Customer Support And Improve Relationships With Customers

One big problem that a lot of businesses face in the realm of customer service is keeping track of customer interactions across different channels. Customers may reach out to a company through one channel, like Twitter or Facebook, send an email to give a more detailed account of their issue, then look for an agent to speak to personally on the phone.

In this instance, a major point of frustration for a lot of customers is having to introduce themselves and repeat their concerns over and over again to different agents. It can be frustrating and cause current customers to grow tired of doing business with you.

But because CRMs can centralize data across multiple platforms, they also help customer service representatives manage customer complaints and customer questions across multiple channels. CRMs connect sales, service, and marketing information into one easily accessible dashboard that updates in real time.

If a rep makes progress with a customer over the phone, those in charge of socials and email can immediately see the updates and respond in a relevant way. Ultimately, CRMs help to foster strong customer relationships through customer service automation.

Monitor Your CRM From Anywhere, Anytime

Most CRMs these days are cloud-based, meaning that anyone with access to the platform can retrieve the information they need when they want, where they want. This is especially helpful for outside sales reps who are constantly on the road.

How To Improve Your Customer Relationship Management System

If you already have a CRM system but think it needs revamping, or if you’re about to introduce a new system and want to make sure it gets used to its full potential, check out these tips:

Invest In Employee Training

You can’t expect your sales team to figure out your new CRM system on their own, especially if it will be their first time using one. CRMs have a bit of a learning curve, and less-than-tech-savvy reps may feel frustrated using a platform in the first few days. If you want your reps to see your CRM as a tool meant to help them rather than hinder them from doing their job, you need to give up a little time for training.

One effective strategy for faster adoption is to teach more technologically inclined reps first, then have them guide their co-workers later on. That way, when someone on the team is confused about a certain aspect of the CRM, they can turn to their colleagues for help even after training is done.

Keep Your CRM Clean And Up-To-Date

A bloated database filled with outdated data can slow down team members and, in turn, business processes. You should have a system in place for keeping your CRM database clean and organized.

Aside from having a routine maintenance schedule for your CRM, here are some things you can do to keep it nice and neat:

  • Utilize your CRM’s reporting features to scope out outdated or unqualified contacts.
  • Reach out to contacts to find out if they’re still interested in receiving updates from your company.
  • Dump “dead” leads or leads that are unresponsive.
  • Assign strict roles to different users with varying levels of access to the stored data. That way, you can control who gets to input what kind of data to the platform.
  • Create a standardized format or “style guide” for everyone to follow when inputting data.
  • Delete the clutter. Stop hanging on to old emails and templates that serve no purpose today.
  • Hire a data manager to oversee CRM data management.

Key Takeaways

CRM systems can be a great way to keep track of your customers and their interactions with you. However, they are only as good as the data that is put into them. Make sure you are taking the time to input accurate information so you can get the most out of your CRM system.

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