Benefits of Implementing a CRM System

Benefits of a CRM system

What is a CRM system?

CRM in CRM system is an abbreviation for "Customer Relationship Management." It is a management method for building an ongoing relationship with existing customers.

Simply put, it is a method to provide useful information to customers to promote customer acquisition and repurchase from customers.

As customer needs diversify, customers' interests also differ depending on the current situation, such as attributes such as departments and job titles and issues they face.

In that case, when disseminating information, it is necessary not only to deliver the same information to all customers but also to use different information for each customer's attribute.

An IT tool to deliver different information to each customer and analyze each customer is called a CRM system.

It can be used in various industries and has a wide range of functions such as customer information management and analysis, marketing through e-mail distribution, and security functions, making it the perfect system for strengthening relationships with customers.

Five advantages of implementing a CRM system

Implementing a CRM system provides the following five benefits:

1. Unified customer management that can be shared by everyone

2. Information can be sent to each customer

3. Improve business efficiency

4. Can be used for marketing

5. Improves customer satisfaction

Let's take a look at these advantages in order.

1. Unified customer management can be shared by everyone

Because the system manages customer information that has been converted into data collectively, it prevents situations such as customer information not being taken over by the departure of the salesperson or the expansion of the branch office, allowing for a smooth handover.

In addition, the information on the system can be freely viewed by employees, making it easy for them to share information. Even if the person in charge is absent and needs a replacement, or if the person in charge changes suddenly, it is a big attraction to be able to check customer data and past response history immediately.

2. Send out information tailored to each customer

By registering customer attributes, purchase history, past conversations, etc., in the CRM system, customer information can be analyzed and visualized, and proposals can be made at the right time to meet the needs of each customer.

3. Streamlining operations

There are various types of CRM systems that allow you to manage the progress of deals in real-time.

In addition to this, since you can manage your tasks and schedule at the same time, the system can determine and show you what needs to be done now so that the time spent on coordinating tasks can be allocated to other tasks. It will improve your business efficiency.

4. Can be used for marketing

In addition to viewing individual customer information, CRM systems can also be used to segment and analyze customer information, such as age and address, which can be very useful when creating internal marketing strategies.

CRM systems are often considered as sales support tools for employees, but at the same time, they can also be used for decision-making for the entire company.

5. Improves customer satisfaction

With a CRM system, you can provide fast and detailed follow-up services based on each customer's attributes and purchase history. Since you can always respond appropriately to your customers, you can expect to improve customer satisfaction and make them regular customers and fans of your products and services.

Disadvantages of Implementing a CRM System

Three Disadvantages of Implementing a CRM System

There are five major advantages to implementing a CRM system, as well as three disadvantages as follows:

1. Running costs are high;

2. It takes time to establish a CRM system;

3. It takes time to realize the benefits;

Let's discuss each of these disadvantages in turn.

1. Running cost

When introducing a new CRM system from outside, it is inevitable to incur initial and operational costs.

It is necessary to devote people and time to the management and operation of the system, including creating easy-to-understand manuals on how to use the system and training for employees to operate the CRM system smoothly. 

Also, if you operate the system for a long time, you will eventually need to update the system.

CRM systems have great advantages, but they may not be sufficient in all cases.

The CRM systems offered have various specifications, functions, and fee structures, so first, you should consider the cost-effectiveness before selecting a tool.

2. It takes time to establish a CRM system

In many cases, if employees have been managing customer data in their way using Excel, etc., the transition to a CRM system will not be smooth.

In particular, if the system operation is complicated to understand, it is likely to be avoided, so it is important to customize the system so that it can be used as easily as possible and prepare an internal support system in advance.

3. It takes time to realize the effect

CRM systems have a little immediate effect, and unlike web advertising, the effect is not immediate.

The purpose of a CRM system itself is to develop and maintain good customers and improve customer satisfaction, so it is often difficult to realize the effects until the system is firmly established within the company.

However, once employees become familiar with the CRM system and enough data is accumulated, it will be easier to see results. To achieve this, it is important that not only employees but also leaders and managers actively utilize the system.

Clarify the issues when implementing a CRM

It is important to clarify the issues and objectives when implementing a CRM system

Table of Contents

1. Identify issues before implementing CRM

2. Common issues that companies should consider implementing CRM

3. Many customers are leaving

4. Low customer spend

5. Inability to build customer relationships

6. Issues faced by companies with ineffective CRM

7. Assuming that CRM implementation will increase sales

8. Lack of internal information sharing

9. Not selecting the right CRM system for the company

10. What are the issues that companies face after implementing CRM?

11. Low utilization rate

12. Cost-effectiveness is not visible

CRM is a helpful tool in today's business world, where customer satisfaction is of great importance.

However, it does not mean that any company can just implement a randomly selected CRM and improve its performance.

CRM is a tool to deal with specific issues that a company is facing, and some issues need to be addressed to operate it, so it is important to choose the right CRM.

1. Identify the issues before implementing a CRM

It is necessary to identify the marketing issues and problems that your company is facing before implementing a CRM.

This is because depending on the reason why your sales and business performance are sluggish, operating a CRM will not have much impact and will not solve your issues.

It is not uncommon for companies to implement a CRM with high maintenance costs without understanding this and end up suffering because they don't realize the benefits.

It is necessary to review the results of marketing, such as the types of customers you have done business with in the past and what the cost per customer was for each, and analyze the results by asking the opinions of the employees who are directly involved with the customers, and make a list of the problems one by one.

Then, after determining that there are issues that can be solved by using CRM, the company should consider implementing it.

2. Common issues for companies to consider implementing CRM

CRM is a customer management system that manages customer information and uses it to support sales activities, call center operations, and marketing strategies development.

Therefore, companies that should consider implementing CRM can be said to be those that are facing issues related to customers.

3. Many customers are leaving the company

Many companies have the problem of not being able to create repeat customers even if they improve the quality of their products and services, and even if people purchase products or use services several times, they do not stick around and leave.

CRM is the best tool for this kind of problem.

By using CRM functions, it becomes easier to provide highly satisfactory services suitable for each customer by using data on customer attributes such as gender, age group, and past transactions.

As a result, you will be able to retain your existing customers.

4. Low unit price per customer

CRM is also useful in cases where sales are not increasing due to a low unit price per customer.

Customers think that if they use similar products and services, it is natural for them to choose the one with a higher satisfaction level.

If you can use CRM to improve customer satisfaction, you are more likely to use your products and services more often, and as a result, the unit price of your customers will increase in many cases.

Also, by using data to understand the needs of existing customers, it becomes easier to upsell to existing customers, which can also lead to higher unit prices.

5. Inability to build customer relationships

If you focus too much on acquiring new customers or fail to follow up with customers after they have made a purchase, your existing customers will leave.

If you are operating a CRM properly, you will be able to accumulate information on your existing customers. You can analyze the customer base and age groups by compiling this information into a document.

If you can create a strategy that meets the needs of your customer base based on this information, you will be able to follow up with them at the right time, making it easier to build customer relationships.

Issues faced by companies that are not effective with CRM

6. Many companies have implemented CRM but have seen no results

However, upon closer examination, it is often the case that the perception of CRM, the CRM system to be implemented is wrong, or the operation method is poor.

7. Assuming that CRM implementation will increase sales

Although many people may misunderstand, CRM is never something that can directly increase sales.

There are indeed many companies and cases where sales have increased as a result of implementing CRM.

However, this does not mean that CRM has generated profits. It is the companies that have increased sales as a result of securing repeat customers or introducing products and services that customers are interested in by utilizing the CRM functions.

Implementing a CRM is not the goal; the key to increasing sales is to continue to use the CRM to analyze data and take approaches to it.

8. Lack of internal information sharing

CRM is a system for using accumulated customer information in a variety of ways.

Conversely, it is necessary to accumulate customer information, and if this is not done, it will not be of much use.

Information sharing within the customer-facing sales and call center departments is a matter of course, but CRM can be fully effective by accumulating sufficient information and effectively utilizing the necessary information only when it is shared with the entire company, including marketing and management departments.

9. Not choosing the right CRM system for the company

The information you want to manage in a CRM varies from company to company.

However, if you choose a CRM system that does not have a field to enter the information you want to manage, you will not be able to manage accurate information.

Before implementing a CRM, it is a good idea to make sure that it has the right functions for your company.

10. What are the issues that companies face after implementing CRM?

Even if you have customer issues and find a CRM system that is suitable for your company, it does not necessarily mean that implementing it will solve your customer issues.

CRM also has post-implementation issues that need to be resolved before they can be used effectively.

11. Low operation rate

Even if a CRM is implemented, it cannot be effective if it is not used.

Therefore, once CRM is implemented, it is recommended to hold briefing sessions and training sessions to explain how to operate and use it, and at the same time, to set rules such as a uniform input method when entering data and using the information.

12. Cost-effectiveness is not visible

In the first place, CRM is a system whose effects are difficult to realize, and it is difficult to know whether the effects are worth the cost.

To solve this problem, it is important to set up indicators that can be seen in numbers.

By recording and analyzing data on whether customers who have done business with the system in the past are using it again, and how the cost per customer is fluctuating, it will become an indicator of whether the CRM is effective, and the cost-effectiveness can be visualized.