CRM Advantages and Disadvantages
What are the advantages and disadvantages of implementing CRM? What are the advantages and disadvantages of CRM?
CRM (Customer Relationship Management) is a system with management functions such as collecting, storing, analyzing, sharing, and utilizing customer information, and when used well, it enables strategic marketing and sales based on purchase history.
In this article, I will introduce the advantages and disadvantages of implementing CRM and what you should be aware of.
Table of Contents
- What is CRM?
- Advantages of Implementing a CRM System
- Advantages of CRM to Customer Side
- Disadvantages of Implementing CRM
- Points to Note for CRM Implementation
- Understand the benefits of CRM and implement the right product for your company!
What is CRM?
CRM stands for "Customer Relationship Management" and refers to maintaining and building good relationships with customers. It can also refer to the system used for this purpose.
With the saturation of the market in many industries, it is necessary to conduct customer-oriented business to meet the diversified needs of customers. CRM systems are attracting more and more attention every year, and the market size is steadily expanding to meet the needs of such businesses.
Read also: Cloud CRM tools
Advantages of implementing a CRM system
What are the benefits of implementing a CRM system?
-What are the benefits of a CRM system?
Centralize customer management, which used to depend on sales representatives.
- Easier information sharing between departments
- Improve customer satisfaction.
- Improves the efficiency of operations
- Provide a basis for new strategies
I will now explain these points in turn.
Centralize customer management that used to depend on sales representatives
In the past, sales representatives managed customer information, and the information they knew was often not shared within the company, so it took time to take over when a sales representative was transferred or retired.
However, since all customer information can be centrally managed on the system, it significantly reduces much time and effort required for sales staff to take over.
Easier information sharing between departments
Information that used to be shared via email or business chat can now be easily viewed by simply accessing the CRM system. In addition to saving time and effort, the system can also handle problems when the person in charge is not available.
In addition to being used by the sales department, the marketing department can use this information to formulate measures for new services, and the public relations department can use it to disseminate information.
Can improve customer satisfaction
CRM systems can organize and analyze customer information according to the following criteria, allowing you to provide pinpoint services according to each customer's profile and purchase history.
Customer attributes
- Individual customers: Name, address, date of birth, gender, etc.
- Corporate customers: Company name, department name, location, name of the person in charge, position, etc.
Purchase history
- Products/services purchased, date and time of purchase, quantity, price, contact person, etc.
Profitability
- Cumulative sales, purchase frequency, budget, forecast for next purchase, etc.
The purpose of running a customer-oriented business is to provide the best products/services to each customer, build a good relationship with the customer, and maintain the customer's purchasing behavior. In other words, customers will become your "customers" and "fans".
Business efficiency
A CRM system can also help you streamline your operations. For example, a CRM system automatically adjusts the schedule of business meetings with customers, eliminating the need for repeated phone calls to adjust the schedule. Also, since the CRM system automatically analyzes customer information, there will be no need to use Excel or other tools to analyze the information. This will allow you to spend more time on other activities and improve the overall efficiency of your business.
Provide a basis for new strategies
Customer information can not only be used to respond to each customer. It can also be used as a basis for developing new marketing strategies by analyzing overall customer trends. For example, based on the analysis result that sales of product A are strong in a certain age group, a strategy to create and sell product B, which is a complementary product to product A, can be established. In this way, a CRM system can be useful for planning the entire company.
Benefits of CRM to the customer side
On the other hand, there are benefits for customers as well. For example, if a customer has their own "My Page" on the website, where they can set up to receive only information in their area of interest, they will be able to get the appropriate information efficiently.
In addition, salespeople can be made aware of your situation and information in advance, so that you can receive more accurate proposals. Another advantage is the smooth transfer of information even if the sales representative is changed.
Disadvantages of CRM Implementation
What are some of the disadvantages of implementing a CRM system? Let's take a look.
CRM implementation costs are high
When implementing a CRM system, in addition to the cost of the system itself, you will also have to pay for building the workflow and training on how to use the system. Of course, if a monthly CRM system is introduced, there will also be running costs.
Solution
If you are concerned about the cost of implementing a CRM system, you should first compare the cost with the benefits you will get from the system. Many products offer free trials or trial versions. If the benefits outweigh the costs, it is recommended to use the trial version and experience the benefits for a certain period before comparing the implementation costs.
CRM operation may not take root in the company
There are cases where CRM is difficult to operate, or the workflow is not well-developed, so it is difficult for CRM to take root in the company.
Solution
First of all, it is necessary to check the operability of the product when selecting it. If the product is not easy to use for everyone in the company and easy to learn, it will be difficult for the product to take root. One idea is to hold in-house training sessions.
In addition, creating a manual and clarifying who should use the system, when, and how will make it easier to use. It is also recommended to prepare the workflow before implementation.
Points to keep in mind when implementing CRM
It is important to note that implementing a CRM system does not immediately result in profits or other benefits. It is necessary to constantly apply the PDCA cycle to analyze the effects and use them to improve the next process.
However, it is the use for existing customers that allows us to realize the effects of the introduction at a relatively early stage. The strategy is to increase the number of "good customers" by analyzing customer information and providing products/services that meet customer needs individually to increase customer satisfaction.
If existing customers are developed into good customers and purchase regularly and continuously, the company will be able to calculate a certain amount of profit. Furthermore, if you build a good relationship with your customers, you can expect to increase the unit price and purchase amount.
Targeting existing customers can also lead to a reduction in sales costs. In general, it is said that acquiring new customers costs several times as much as retaining existing customers, so focusing on existing customers can significantly reduce costs.
And it is possible to acquire new customers by word of mouth through referrals from good customers.
Understand the benefits of CRM and implement the right product for your company
Now that you understand the benefits of a CRM system, it is a tool that can help you build a good relationship with your customers. It is important to understand the benefits of a CRM system so that you can choose the right product for your company.
Points to Note Before Implementing a CRM Tool