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.
Definition: The “CRM” in the CRM process stands for customer relationship management (CRM), and is a combination of tools, activities, and strategies companies use to streamline and boost relationships with clients. The ingredients to successful CRM are strong communication, consistent follow-through, and insights into their accounts.
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.
Pro tip: To get the most return on investment (ROI) out of your sales force, weed out leads by pinpointing those who are most likely to buy. This qualification process ensures that you’re expending time and effort on prospects most likely to become customers. Qualifying is the process of evaluating leads based on how well they align with your target customer and other factors, such as timeline and need. Other qualifying criteria could be budget, response to marketing campaigns, website activity, content downloads, and so forth.
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.
A few common CRM software features include:
- Contact Management
Organizing contacts is one of the primary purposes of CRM software. Contacts within CRM software are similar to contacts in your cell phone. A contact is an entry containing a person’s information and is usually organized into an account or company.Contact entries provide a view of the entire relationship, including conversations, appointments, deals, and current opportunities. It also provides a central location for keeping important information about the prospects and customers you connect with. A contact can contain or link out to proposals, emails, project files, and notes.
- Sales Pipelines
One of the most valuable features of any CRM tool is the ability to create and manage sales opportunities, commonly referred to as “deals.” CRM software allows you to customize your sales pipeline based on the stages in your sales process so you can visually track and monitor sales opportunities as they move through those stages.By consistently updating your sales pipeline based on deal stage, you feed your CRM information that can generate valuable reports. Sales reports created within your CRM show you which parts of your sales process can be improved. For example, if the longest part of the sales cycle occurs between “Contract Sent” and “Closed/Won,” your team can focus on how to push prospects to sign contracts quicker.By using this information to optimize your sales process, you can boost revenue and grow your business faster.
- Email Sync & Tracking
The ability to sync emails with your CRM software allows you to manage your entire sales process in one place. Important information and touch points can happen in your inbox, so it’s important to store all records for tracking purposes. By syncing your business Gmail or Outlook email account, you can document communication history in a way that’s accessible for you and your team.Another valuable feature for salespeople is the ability to track emails sent from the CRM and receive alerts when the recipient opens the email or clicks links. This feature provides valuable information about how your prospects and customers are engaging with your sales process.Insights on customer interactions are helpful because you’ll know where your contact stands, which helps you decide the best steps to take next. Knowing that a customer has read and engaged with your email can help you gauge their interest, giving you indicators on when to reach out and when to give them space.
- Lead Scoring
Lead scoring (also known as lead qualifying) is the process of ranking leads to determine how likely they are to become a customer. CRM software often has a lead scoring feature that categorizes prospects based on the interest they show in your product, their stage within your buying cycle, and how much of a fit they are for your services.Many CRMs use artificial intelligence (AI) to automatically categorize leads by using contextual information about your prospects, such as industry, role, social media, and other public and proprietary information sources. AI also tracks website and email activity, allowing you to gauge the prospect’s level of interest, and automatically adjust the lead score accordingly.
- Reporting & Analytics
Reporting is a foundational feature of CRM because it allows you to analyze and improve your sales process. Using sales reports generated by CRM, you can more accurately set goals and forecast business growth.
CRM reports can tell you:
- Who your customers are
- What your customers are buying
- Their level of loyalty to your business
- Which products and services are most profitable
- Which sales reps are the highest performing
- How long your sales cycle is
- Bottlenecks or weaknesses in your sales process
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
(Best Overall) Companies wanting a customizable CRM that provides real-time analytics and forecasting
Companies looking for an affordable and scalable all-in-one CRM
Young companies wanting a CRM with powerful, built-in marketing capabilities
Growing businesses needing a basic, forever-free CRM with unlimited users and contacts
Businesses that want marketing and sales tools that integrate seamlessly in one platform
Companies wanting an intuitive CRM with integrated automatic email and a visual pipeline
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.
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.