What is Customer Relationship Management – CRM?
Your customers are the lifeblood of your company, regardless of industry. Even relatively isolated fields as medical research will require communication with clients, sponsors and other such groups. As such, every business will require effective customer relationship management if it hopes to succeed.
What is Customer Relationship Management – CRM?
CRM software was developed to make the process of customer relationship management easier and less time-consuming. Some of this software involves a varying number of features, from cataloging client information to more streamlined and efficient access to records and logs. Over the years as technologies develop, the software solutions have grown ever more efficient, and inevitably the means of customer relationship management have become more sophisticated.
Sales managers often praise sales dashboards that provide a quick overview of how the sales processes are doing.
The Genesis of Customer Relationships
Customer relationship management (CRM) started to come into being during the 19th century when the rise of a burgeoning middle class with plenty of capital to spend on personal items came to the fore. While small private businesses catering to individuals had existed since even as far back as the Ancient World, these were very much single companies with limited scope and a stable yet mostly static customer base. With the rise of international empires and trade links, the cheap mass-production of goods and expanding wealth through all sectors of society, there became a greater demand for goods. This demand led to increased competition between businesses and a greater need to maintain customer loyalty.
Previously businesses could rely on a small established circle of consumers who lived locally. Now they had to regulate and appeal to customers on a larger, more anonymous basis. Furthermore, there was a greater need by individual businesses to associate with and secure the custom of extraordinarily wealthy buyers for their products as well. For example, metal manufacturers were highly dependent on other industries – principally shipbuilders – buying their product.
Read on: Why You Shouldn’t Use CRM Software
As the consumer base expanded, it became necessary for businesses to keep better track of their clients, especially as different customers came and went with the regular boom-and-bust of the economy. At first, this was largely done through ledgers, books and other such administrative systems. This usually allowed companies to keep extensive records of their customers and clients within a relatively compact filing system or a series of notes and books. However, that quickly became overcomplicated and difficult to track. This especially became true as companies expanded, as did their list of contacts. Not helping the matter was new modes of communication coming into play, and people moving around more liberally within the country, that required companies to be constantly aware of how each customer should be contacted.
There was also the matter of storage. One of the biggest problems with analog records is that they require much space, frequently requiring entire rooms dedicated just to storing information about customers and past interactions with them. This becomes a major problem with larger, more established businesses, who may need to keep track of records relating to hundreds of individual customers and clients over the course of several decades. Perhaps unsurprisingly, such records required a fair amount of paper.
Everything about your business, one click away
Relating to this was how time-consuming retrieval of that information could be. If an old client contacted a business after a gap of several years, the result could mean trawling through several years’ worth of records trying to locate their details. This frequently required hours or even days, worth of work. Not really an effective client management solution.
With the increasing difficulties that came with keeping track of customers and the need for more efficient organization of customer information, new ideas were sought to keep everything together without requiring tedious slogging through books and files.
Rolodexes – Revolutionizing Contacts
The business card quickly developed as a small and convenient way to pass on details to other companies and rapidly became so prevalent that exchanging business cards became common. However, this only resulted in an individual acquiring a lot of small, easily lost pieces of card and paper.
Then, in 1956, a Danish inventor in the employ of an American stationery manufacturer in New York developed what he dubbed the Rolodex (a portmanteau of rolling and index). Based on an earlier device called a wheeldex, the Rolodex allowed its owner to store all necessary contact details in one small and convenient device. This invention revolutionized customer relationship management by enabling companies to store several hundred individuals in a secure location. The device also made looking up the contact details of customers less painful through its quick and intuitive wheel system.
Before long the Rolodex had become a staple piece of office equipment. Nearly every professional had one, and they even became hotly contested in office politics. If someone was fired from their position, a frequent occurrence was the theft of their workplace Rolodex – and all the valuable contacts held within them. Once, a Rolodex was even held for ransom.
Remember, Rolodexes contained critical information about clients and how to contact them. Loss of the Rolodex often meant the loss of the customer as well, as the company would have no further way to getting in touch with them. Meaning that each customer had to be contacted all again and their details reacquired. Subsequently, many companies went to great pains to ensure their Rolodexes could not wander too far off.
The Digital Age – a New Dawn for Professional Networking
It is something of a testament to the Rolodex’s utility that it managed to be found in offices for so long after its invention. As recently as a few years ago they were still considered essential pieces of office equipment, and even today many argue that a Rolodex is an extremely useful piece of equipment to have around. However, as technology improves new gadgets inevitably come to the fore that replace or at least challenge, the things our parents and grandparents used to rely on.
Today, nearly all of our customer relationship management is done through computers and the internet. While there’s still a market for traditional analog methods, it is safe to say that computers are now the preferred method of keeping information on and contacting clients within the business world. Usually, analog methods are just a backup in case of a general systems failure or power outage.
The main advantage of computers is that it takes up no space whatsoever. The contact details of several thousand, or even several tens of thousands, of clients, can all be kept on a single disc no large than a coffee coaster. Even on a computer, the amount of storage space being taken up is tiny.
Often as little as a just under a hundred or so megabytes.
Theoretically, digital information lasts forever. Whereas cards will eventually degrade and become worn down, an electronic database will continue so long as the device it is being stored on does. With the advent of online backups and Cloud-based storage, this can effectively make losing customer information nearly impossible.
There’s one more imminent benefit. By tracking and managing leads in customer database software, you can set up a sales dashboard to monitor sales metrics and KPIs.
Another strength of computerized customer information was that it was also incredibly easy to catalog and retrieve once records have been made. In the past, finding information on a customer may have required extensive searching through physical files and papers, a process that could be very tedious and time-consuming. Electronic programs allowed near-instantaneous acquisition, as well as transferal of information just as instantaneously.
The Importance of Effective Customer Relationship Management
These developments into the tracking, storage, and retrieval of information regarding customers is a very important practice for businesses. The more administration that a company needs to do, the less time and manpower it has to focus on actually selling a product. Your customer management team is constantly acquiring data on all kinds of people, clients and businesses, all of which needs to be stored somewhere so that it can be referred to later. If a company has to rely on paper to keep this information safe, then there’s a real risk of information being lost, misplaced or even taken by leaving team members.
The recent advances in customer relationship technology have allowed for more efficient means of lead management. By no means is the process perfect. Accidents can and still do happen, resulting in a loss of data. However, such losses are a lot easier to recover from than before.
Furthermore, having the data is no good if you cannot utilize it. These advances also allow companies the ability to place context to all the names, recorded phone calls, and contact details that have been stored in their archives.
By making all this easier to achieve, developments in customer relationship management technology give your team more freedom from number-crunching and paperwork. This allows them greater opportunity to pursue new customers and new arrangements, that will permit the company to make higher profits at a much-reduced loss. In all, it is a win-win scenario.