The Ultimate Guide to Understanding the CRM Process

The CRM process consists of activities that grow relationships with existing customers or new prospects. CRM means nurturing and expanding customer relationships while moving prospects through the sales pipeline. CRM is a process that takes place internally within your company but directly impacts the experience of the customer.

Ensure the success of your customer relationships with these best practices:

What Is Involved in the CRM Processes

While the term CRM often relates to software by the same name (which is designed to help you stay on top of deals), the process also involves skills such as active listening, attention to detail, and consistency. An effective process results in your customers feeling that you value them and their time. It helps establish trust and adds value to the relationship by offering the best products and services for their unique needs. CRM software, on the other hand, is just a tool that can be used as part of the process to do these things more efficiently.

For example, part of your company’s CRM strategy could be using the software to manage contacts and keep track of project deliverables. Internally, you would have contacts organized by company name. For projects, you would get notifications and calendar features to keep the project on the necessary timeline. As a result, you have solid communication with the correct stakeholders and hand over deliverables on time. By streamlining the workflow, you can strengthen customer relationships over time.

Every business should put forethought into defining how they’ll manage the customer experience. To avoid losing customers, businesses need to continually build new connections, track and monitor sales opportunities, understand their customers, and manage their team’s efforts.

Your CRM process will allow you to take a proactive approach to understanding the needs and challenges of your prospects and actively engaging them in your sales strategy. Regardless of your industry, each interaction with current and future customers will be defined by these four components:

Four Key Things Your CRM Process Should Include

1. It Defines the Prospecting & Lead Capture Strategy

The customer relationship process starts long before contacts become customers. It begins with generating and identifying new potential customers, also known as prospects, or leads. While the job of getting leads into the sales funnel tends to be the responsibility of the marketing department, your CRM process will be doing the heavy lifting.

An effective CRM sales process captures leads across your marketing channels, like your website, social media, email, and inbound phone calls. It also helps you nurture them to identify which leads have the highest chance of becoming customers. Lead nurturing campaigns can help you turn contacts into new business regardless of whether you collect them from your website or buy business leads from a service.

2. It Makes It Easy to Track Opportunities

One of the most valuable functions of CRM software is the ability to create and track sales opportunities. CRM allows you to monitor them as they move through the pipeline. Keeping records within your CRM as accurate as possible allows you to properly measure your sales cycle and create reports that will inform your entire process.

Tracking your sales opportunities through a well-developed sales pipeline ensures that you take the right actions at the right time. For example, sales reps need to send follow-up emails after meetings with prospects. CRM software has notification features that ensure these tasks don’t fall through the cracks. These small actions over time lead to an increase in business and strong customer relationships.

As your sales team grows and begins to manage more sales opportunities, the ability to monitor them becomes even more critical. Tracking deals can be the difference between winning and losing a sale. When your deal stages are clearly defined, you can stay on top of the necessary touch points and keep prospects and customers engaged.

3. It Ensures Your Solution Is a Fit

Understanding your customers is the key to providing a superior experience. To understand customers, ask questions and actively listen. This is different than simply pushing products for the sake of closing a sale. Through deep listening, you can learn more about the customer to address their specific pain points while suggesting the best products and services.

To gain a thorough understanding of your customers’ needs, follow these best practices:

Define Your Customer Personas

Make sure that the prospects you’re targeting are a fit for your product. This requires you to first gain a clear understanding of the type of customer you most want to engage with. They will be companies of specific sizes, locations, industries, and revenue. Most of all, they’ll have specific problems and needs that your solution can solve. Defining your customer personas is the smartest way to prospect because it prevents burnout that sales reps experience when going after the wrong targets.

Take the Time to Qualify Leads

Generating leads is exciting because it means people are taking an interest in your product. However, not all interest will be strong enough to convert to paying customers. This is why lead qualification is so important in sales. If a salesperson takes the time to have discussions with every prospect that expresses interest, they’ll eventually burn out.

Listen to Your Customer Needs

A large part of understanding your customers, and the CRM sales process as a whole, is listening to your customers’ needs. Sales organizations often call this the “discovery process.” These discovery conversations help you better understand customers’ specific pain points and challenges. When you fully “uncover” and understand their problems, you can offer the best solution.

4. It Centralizes Communications

Communication is everything when it comes to relationships, especially with your customers. Communication builds trust and drives relationships. Your communication habits and protocols have a direct impact on your sales success.

You can achieve high levels of communication with customers by keeping detailed records of your conversations. Use these records to prepare for conversations by having context and providing value. Customers should not have to repeatedly explain the same story or catch their salesperson up on account activities. To “wow” customers, prepare for calls and be ready to provide solutions.

Sales Benefits of the CRM Process

An effective CRM process doesn’t just benefit customers. Fewer errors and improved communication create happy customers. Happy customers lead to company growth and revenue increases. Streamlining sales activities frees up time to generate new business.

A few of the specific benefits of the CRM sales process include:

Winning More Quality Sales Opportunities

Your CRM process will have a trickle-down effect that results in increased sales opportunities. Not only can you boost the number of deals closed, you can effectively target higher quality opportunities with large, notable brands. You CRM should help you pinpoint which companies to go after and the best way to move them through the pipeline.

Improving Customer Relationships

In most cases, it’s more cost-effective to retain existing customers than to acquire new ones. Most businesses aim to attract new customers and retain existing, so a good CRM will help with both. Consistent communication and fewer errors results in less customer turnover. Consistent, targeted outreach generates new business.

Measuring the Effectiveness of Sales Activities

The best sales leaders continually look for ways to improve their sales process and create more efficiency. A clearly defined CRM plan allows you to set goals and track team performance. By pinpointing the most productive activities, you can double down and focus on them for maximum results.

Proper tracking and measurement is key to improving sales performance. Not only will metrics and key performance indicators (KPIs) reveal areas that need improvement, but they’ll also show you if you’re on the right track. Sales processes should be based on facts and numbers, making tracking an essential activity.

Customer Relationship Management Costs

While CRM provides undeniable benefits for your company, keep in mind that there are still costs. To create a truly effective sales process, make sure that your CRM costs are justified by the amount of revenue and overall business it helps you generate. To calculate the cost of CRM, factor in time spent by salespeople, software and technology tools used by your team, and travel.

Other costs include entertaining clients, cost of materials and resources enabling the process, and the cost of providing customer support.

Consider the following costs:

• A salesperson’s time: The time your team spends on nurturing relationships is valuable, and is one of the most expensive aspects of customer relationship management. You’ll also want to factor in the time of your sales support and customer service teams.
• Travel: Wherever your customers are located, building and managing customer relationships requires a personal connection. Often this means traveling to meet with them in person, which can be a considerable expense.
• Technology: Technology has gone from a “nice to have” to essential. It’s no longer cost-effective to spend time on manual tasks that can be automated by software and apps. Technology has a cost, but it also increases productivity and allows people to connect remotely versus costly travel.
• CRM software: The cost of CRM software can range from free-forever plans with basic features to $49 per user, per month for more comprehensive plans with automated tools and advanced reporting.

CRM Software Features

CRM software manages contacts and sales opportunities, allowing you to easily generate reports. Your CRM enables communication with leads and customers, and allows you to manage sales opportunities as they move through your pipeline. Overall, CRM features allow you to communicate with prospects and customers in a way that boosts business results.

To illustrate how a CRM’s functionality can make your overall CRM process more efficient, we have chosen to use Pipedrive as an example. This is because Pipedrive is one of the more simple-to-use CRMs in the marketplace and a great solution for teams just starting out thanks to its highly visual pipeline and simplified feature set. Best of all, it supports a number of business tool integrations, allowing the system to grow with you. Visit their website to learn more.

Visit Pipedrive

A few common CRM software features include:

CRM Software Providers

The CRM industry is growing rapidly, making your choices in software seemingly unlimited. Choosing a CRM can be overwhelming, so it’s best to choose a reputable vendor that has been around for a few years. Remember, you’ll be inputting valuable company information into your CRM, so you want to make sure your chosen vendor has staying power.

The best way to choose a CRM provider is to be clear on the features you’re looking for. For example, if you run a business that relies heavily on cold calling or telemarketing, you should look for a CRM that has strong voice-over-internet (VoIP) capabilities. Click here for a guide that helps you choose the CRM for your business.

A few of the CRM software providers designed for small businesses include:

6 of the Best CRMs for Small Businesses

Frequently Asked Questions (FAQs)

How do I create a CRM sales process?

You should base your CRM process on your overall sales plan and strategy. Once you define your sales process, you can define the specific steps, activities, and communications to effectively manage customer relationships. Be sure to check out our guide to creating a sales plan for more information.

What if I can’t afford a CRM?

Implementing CRM should not be looked at as just another business cost to keep down. To determine the true cost of CRM software, you must determine the return on investment (ROI) you’ll receive. This means not only looking at the price tag, but factoring in the time and resources it will save your business.

Expending time on manual tasks and going after the wrong sales opportunities are costly activities that CRM can eliminate. If you’re in the early stages of starting your business, there are free CRM options with limited features and capabilities that can keep you afloat in the short term. You can also create your own CRM in a Google Sheets spreadsheet if you aren’t ready to commit to software.

Bottom Line

Customer relationship management is the lifeblood of strong businesses. Develop a CRM process to ensure you’re investing your time and energy efficiently. Although CRM seems like an internal process, it will result in customers having the best possible experience doing business with you. The goal of any solid CRM process is business growth and profitability. CRM boosts productivity by allowing you to focus on the highest quality leads and deals so you can reinvest the time back into your business.