What is CRM System?
CRM (Customer Relationship Management) helps you to better focus on the key aspect, people – towards the inside of the company and externally – customers, colleagues, suppliers and service users.
When talking about CRM, we can think of three things:
- CRM as a technology that analyses interactions between business and users. This is also called the CRM system.
- CRM as a strategy – in this case, it is a business philosophy that should be governed by relationships with existing and potential customers.
- CRM as a process – it is a sequence of steps, respectively the way these customer relationships are governed or enhanced.
What is the CRM system for?
The CRM system records customer contact information such as email, phone number, social networks and more. It can also process information like, for example, company information, news, personal preferences, and communication.
The CRM system processes the information in order to better understand the needs of a natural or legal person.
The CRM system improves customer relationships by creating a 360-degree customer view, capturing the interaction with the company and reflecting on the customer’s personal preferences in order to increase customer satisfaction.
Why is CRM important?
Maintaining good relationships is important either from the point of view of retaining existing customers or getting new ones. Thanks to the CRM system, everything is in one place – a simple and easy-to-understand dashboard that tells you, for example, history of communication, the status of orders, service interventions and much more information.
According to Gartner, the CRM software market has become the largest software market in 2017 and the growth continues. If your business is to survive, you will need a clear vision and strategy. For companies thinking about the future, the CRM framework is such a strategy.
What are the CRM benefits?
Using the CRM solution to collect and organize data that is relevantly made available and used, CRM offers many benefits such as:
- Advanced Contact Management;
- Cross-team cooperation;
- Increased productivity;
- Enhanced business team;
- Exact sales planning;
- Reliable reporting;
- Improved sales metrics;
- Increase retention and customer satisfaction;
- Increase ROI marketing;
- Enriched products and services.
Advantages of Cloud vs. on-premise CRM systems
For cloud CRM solutions, you access cloud-based applications; the CRM software vendor manages and owns the hardware and software part of the solution and you rent the services through the web. The CRM vendor provides updates, maintenance and data storage of CRM applications, SaaS solution (Software as a Service).
Advantages of Cloud CRM:
- Remote access – data is available on different devices, anytime, anywhere (if the user has access to the Internet);
- Cost-effective solution – For most companies, this is a more cost-effective solution than is the case for on-premise CRMs;
- Simple and fast deployment – as there is no need to install hardware, CRM cloud is much simpler and faster to deploy;
- Simple update and maintenance – any update place automatically online without the need for your intervention, resp. additional costs. On-premise CRM solutions, on the other hand, are on your premises, managed and maintained by your IT department. The CRM supplier only provides technical cooperation, support and training. You are responsible for updating, developing, administering and maintaining the solution.
Benefits of on-premise CRM:
- Control – You have full control over the management of the solution, whether on the HW or SW side;
- Scalability – no limits on database size;
- Upgrade flexibility – When you decide to upgrade your system is fully up to you;
- Security – private and sensitive data is fully under your control in your premises;
- Cost-effectiveness – Sometimes a more advantageous on-premise solution than renting, especially when many people need access to the database;
- Integration – in most cases, on-premise CRM is a more flexible solution to integrate into different applications.
4 things to consider when calculating ROI
Each solution has its advantages and disadvantages. It is therefore important to consider what matters to you and what your needs are in terms of time.
Key factors include:
- Added value – don’t forget that the CRM solution is supposed to push you forward. It is therefore good to calculate the business case and put the ratio of additional costs vs. savings and additional revenues.
- Time horizon – or what is the expected life cycle of the CRM solution?
- Available IT resources – for most small and medium-sized businesses, a better and more flexible solution is the cloud CRM model.
- Opportunity costs – e.g. how many people you can dedicate to the maintenance of the solution. Consider whether it will be better to maintain maintenance secured by the cloud CRM solution provider.
- Degree of uncertainty and risk – what happens if, for example, your server fails and your IT expert is just on vacation? Apparently, in the case of a smaller team, the cloud CRM solution will be better.
If you like this article, I recommend that you also read Why CX System vs. CRM System?
Roman Kučák, CEO