Customer retention  

refers to the activities and

actions companies and organizations take to reduce the number of customer
defections. The goal of customer retention programs is to help companies retain as
many customers as possible, often through customer loyalty and brand loyalty
initiatives. It is important to remember that customer retention begins with the first
contact a customer has with a company and continues throughout the entire lifetime of
the relationship.
 

benefits of
According to www.forcemanager.com (2020), The 

customer retention  are sometimes lost among the

hype and excitement that surrounds new business acquisition because the truth is, it’s
just not as fun.
Think about the atmosphere that overcomes your sales floor when a member of the
team closes out a big deal. There’s genuine euphoria, right? Not only are you happy for
the individual rep for closing out the deal but you know it takes you one step closer to
achieving your sales targets.
Those reps able to master new business acquisition are subsequently treated as
heroes; their names topping the CRM leadership board and faces illuminate the break
room wall.
And you know what, there’s absolutely nothing wrong with that – new business is an
incredibly important revenue stream for all companies.
The only problem is it does take the shine away from its less than glamorous, though by
no means inferior cousin – customer retention.
Working quietly away from the hustle and bustle of a noisy sales room floor, customer
retention can be a profitable sales strategy despite its lesser known status. In fact, as
we’ll discuss in more detail a little later on by avoiding the high costs often associated
with pursuing new business it can actually be more profitable
SO there!
It’s not always the loudest in the room that commands the most respect.

What are the benefits of customer retention?

Apart from being considerably cheaper than acquisition, there are several more benefits
of customer retention that we are going to focus on in this article:
 Cost of customer acquisition
  Upsell and Cross-Sell
 Successful referral system
 Build advocacy
 Shut the back door
Cost of customer acquisition
It’s no secret, pursuing new business can be an expensive venture.
Just think of all the moving parts involved when courting a new customer:

1. Email campaigns
2. Social media sites
3. SEO
4. PPC
5. Web banners
6. Retargeting ads
7. Outbound sales teams
8. Prospecting leads
Each of these steps has a hard cost. Whether it’s the inbound marketing team
managing the paid advertising and content strategies or the outbound sales teams
prospecting and calling cold leads. Not just in salaries but in advertising budget as well
as the tools required for prospecting.
What’s more, according to the 2018 Hubspot State of Inbound prospecting leads
has never been more difficult.
When asked what has become more difficult in sales compared to the last 2-3 years the
field sales teams surveyed responded:
 Hearing back from prospects 40%
 Reaching the decision maker 31%
 Closing deals 30%
 Identifying good leads 28%
And even when a new customer has been successfully courted it can take weeks,
months perhaps even years before you turn a profit, depending on the length of your
sales cycle.
So when you combine these points with the fact that there’s a 5-20% chance of selling
to a new customer compared to 60-70% for an existing customer and you can see the
attraction of taking a closer look at home.
But surely there’s a cost involved with keeping customers happy, right?
That’s true, there is a cost. Additional sales or customer success staff may need to be
hired and trained in order to attend current clients’ needs.
However, if you remain unconvinced of the benefits of customer retention take a look at
the research undertaken by Bain and Company.
They found that an increase in customer retention rates by just 5% could transpose to
between 25-95% profit margins, again depending on the industry and length of sales
cycle.
Up to 95% for just 5% more input. That’s huge.    
Again, I want to make it clear this is not to discredit the work of customer acquisition; it
is a vital stream of revenue one which without there would be no new business, but
rather to highlight the untapped wealth laying in your current customer base.
 
Upsell and Cross-Sell
Another one of the benefits of customer retention is the ability to upsell and cross-sell
products and services.
Unfortunately many field sales teams make the assumption that once an initial sale has
been made, that’s it – no more work to be done here.
But there is, if you listen carefully to your customers.
Field sales reps in constant contact with customers are in the perfect position to know
when a customer’s needs expand beyond their initial offering. When that’s the case, and
they have the budget behind to do something about it, that’s the moment when a
potential cross-sell or upsell can be made.
For example, imagine you are an agent or broker working in the insurance industry.
You’ve got a meeting with an upcoming client in order to renew a standard policy on a
vehicle. However, on your way in you notice an additional vehicle parked in the
driveway which gets the gears turning. After an initial discussion with the customer you
discover that they are in fact unhappy with the service offered on the additional vehicle
and are open to discussing a possible switch if there was an offer to be made.
As an upstanding field sales agent you of course happily oblige. A new sale, free of
charge from an existing customer.
It’s also in this type of situation where an intuitive personal sales assistant app comes in
particularly handy.
The software automatically analyzes the data of the upcoming sales visit, informing field
sales reps of the services that sold well when partnered with the particular product or
service they are about renew/sell. This kind of information is extremely powerful
in increasing the quality of upsell and cross-sell opportunities.
Sticking with our insurance agent, another possible use case of a personal sales
assistant app is that during your last visit you noted the customers were due to have a
baby in the next couple of months. The app analyzes this data and before your
upcoming appointment handpicks some life insurance policies tailor-made for the
customer based on their needs.
Technology combined with cross-selling can be an extremely profitable sales strategy
Referral system
The benefits of customer retention extend far beyond simply cross-selling and upselling,
mind you. If your field sales team is able to keep customers onboard and happy with
your product or service then they can act as a successful referral system.
And referrals are a sales rep’s dream.
Again, backed up by the 2018 State of Inbound report which asked field sales teams to
confirm their best sources for new business, they majority came from:
 Word of mouth (56%)
 Customer references (46%)
 Media articles (38%)
 Sales rep (22%)
In over 50% of the cases analyzed sales teams confirmed the most effective source of
new business came from existing customers.
A powerful tool then, wouldn’t you agree?
It shouldn’t really come as much of a surprise. When a friend or trusted colleague
recommends you a product or service you know there is no ulterior motive. The
recommendation they give has your best interests at heart, as they are either doing
based on personal experience or that of their trusted network of friends and colleagues.
The fact is that when receiving a phone call from a sales rep, even from those that
genuinely believe their product or service helps solve a burdening pain point of ours, we
know there’s an ulterior motive at play. They’ve contacted us in order to sell something.
They get rewarded for making that sale, regardless of whether or not it’s a good fit for
us.
And a lot of prospective leads will always have that in the back of their minds, making it
a lot harder to close a sale.
It’s also true that customer’s onboarded via a referral tend to have a lot shorter (and
cheaper) sales cycle.
As there’s not so much emphasis on “selling” the product or service as that’s effectively
been done for them via their referrer. The job now is to see whether you are both good
match for each other, with just the finer details left to be ironed out.
And anyway, once you’ve put in the hard work ensuring they have everything they need
(and it is hard work built up over months and even years) it’s only fair that they return
the favor and as the statistics suggest, they often do.
Advocacy
One of the related benefits of customer retention that goes hand-in-hand with referrals
is customer advocacy.
Customer advocates are those that scream your name from the rooftops, telling anyone
who will listen how great your company is, how solid your products are and how the
competition simply trail in your wake.
What’s more, they do all this free of charge!
As we just discussed they are extremely important in influencing the buying decision of
potential customers, not just through word of mouth and direct referrals, but advocates
are also extremely active online.
Social media, forums, websites, product reviews, eCommerce sites and app stores are
their new favored playgrounds, and with more and more customers heading that way for
more info before committing to purchase, it’s vital you have these communities in place
to speak positively about your brand.
But I want to give you another example of how a customer advocate was recently able
to swoop in and save the day.
Now it’s true that not all customers are going to be happy all of the time, no matter how
great your field sales team are. Sometimes there will be slight niggles or maybe
technical glitches (if you’re working in software) that can be frustrating for a client.
As a field sales rep it’s your duty to keep these issues to a minimum and that when they
do arise they are dealt with as swiftly and as efficiently as possible. But if all your efforts
appear to be in vain, try looking for precedence with some of your other clients.
Do you know any that were having similar difficulties? Maybe from the same industry?
Or with a similar type of working process that they were able to work around?
If so, don’t be afraid to put them in touch – brand advocates will always be more than
happy to help.
What’s more, peer-to-peer customer feedback is a lot stronger than any assurance that
come directly from a brand. Again, there’s no ulterior motive and shows that as the field
sales rep responsible you’ve taken a proactive step in trying to solve the issue at hand.
Who knows? One day they may become brand advocates themselves.
Shut the Back Door
Just as there’s a hard cost in courting new customers, there’s a hard cost with them
leaving too. What we are of course talking about it churn rate:
The rate at which subscribing customers discontinue their service with your brand
With all the fame and that comes with getting customers through the door, many field
sales teams forget to lock the rear doors on the way out!
And after all the hard work put in to get them in the first place it would be a shame to
see them leave like that.
To highlight its importance let me give you a little example.
Say that, in you role as area sales manager you set a target of 10% growth for each of
your given territories. However, unbeknown to you your company’s churn rate is running
at 18%, which means effectively in order to achieve your target of 10% growth, your
reps would in fact have to increase their revenue by 28% to account for the loss in
customers.
That’s almost triple the initial targets – which I’m going to assume were competitive in
themselves.
Again I want to make it clear this is not to discredit the work of customer acquisition
teams – the customers they bring through the doors ARE those very customers we are
talking about retaining. Without them retention strategies wouldn’t exist. The idea is
simply to understand the benefits of customer retention strategies that, aided with the
help of mobile sales technology helps you maximize revenue extracted by your sales
team.
It would, after all, be a shame to leave money left on the table wouldn’t you agree?
 

7 Unique Ways to Increase Customer Retention (and

Increase Profits!)
Toma Kulbytė   (2021 )

Post summary:
 The difference between companies that grow and those that don’t is customer
retention. The more customers that you can keep and continue to sell to, the
more likely you are to achieve your business goals.
  Investment in customer acquisition far exceeds investment in retention. Yet,
selling to an existing customer is 6-7 times cheaper. So, why are companies
spending most of their budgets on generating new customers?
 The biggest challenge for many companies is where to begin. Here, we share 7
practical customer retention strategies that you can use to keep your existing
customers happy over the long-term and increase your profits.
For people who work in sales, the number one priority is to find new ways to increase
revenue.
To do this, they need to sell more, which, in turn, means – they need more clients.
As a result, very often salespeople get so focused on gaining new customers that they
fail to effectively address the need to retain those they already have.
Yet, we keep on hearing, time and again, that it’s cheaper to keep existing customers
than acquire new ones.
Allow me to remind you of just 1 killer fact: according to Marketing Metrics, the success
rate of selling to an existing customer is 60-70%, while the success rate of selling to a
new customer is only 5-20%!

So why do we keep on spending more money on getting new customers?

Customer acquisition vs. customer retention

The most common pitfall for businesses around the world is that they think that if they
have a great product or service, then customer retention will follow naturally.
And, while this might be the case in some instances, the harsh truth is that it’s only a
short term strategy. An even harsher truth is that, sooner or later, your customers may
just … leave!
Because if you stop trying, your customers start feeling that you no longer care about
them.

 
So, what’s the outtake?
You need to keep on trying and earn a customer's loyalty, continuously.
Having an effective customer marketing strategy gives you the ability to identify, track
and sell more to the customers who are most likely to become your long-term sources
of revenue.
The businesses that “get this” consciously invest in customer retention, because they
see it as the biggest revenue driver, according to KPMG.
In this blog post we will explain why and how customer retention is essential to growing
your sales, and we will also provide you with five tips and practical examples of
how CRM software can help you carry out the ways to sell more to your existing
customers.

What is causing customers to leave?

Customers stop buying from a business for unique and personal reasons, but they tend
to fall under a few similar categories.
In CallMiner’s 2020 report on Customer Churn, they identified 3 key areas that drive
customers away.

1. Unfair Treatment. Topping the list are customers who feel poorly treated by
companies and would prefer to stay loyal if they had a better customer
experience. Ineffective service automation, such as limited access to customer
support, is also causing customers to feel angry and frustrated.
2. Even though price is the greatest factor that influences churn, people are willing
to stay if they are treated fairly. When another company promises a better
experience at a lower price point, it’s a quick win for competitors to acquire new
customers.
3. Human Service. Whenever a customer has a problem they want to speak with a
real person. Searching for answers on a website or interacting with a bot chat fail
to address the unique needs of a customer and result in not feeling listened to
and offered solutions that don’t solve their problem.
CallMiner’s report reveals a growing challenge for companies and $5 billion of avoidable
churn.

Even though it will cost your company 5-25 times more to attract customers rather than
keeping an existing customer a mere 5% increase in customer retention can increase a
company’s profitability by 75%!

Customers are aware of the incentives being offered to grow your customer base.
Regardless of the price they paid when they signed up, when their overall customer
experience lacks incentives or human touch, you can significantly reduce churn rates.

How can CRM help you improve customer retention?

When it comes to CRM, the secret lies in that one word – relationship.
CRM is about knowing your customers – who they are, how they’ve been marketed to
and how they responded. If all goes well, you keep selling to them, and that’s when the
fruitful relationship really starts.
And while CRM software does not manage customer retention by itself, it will provide
you with the tools to help you manage the activities around customer engagement to
improve the customer experience.
The question is what do you really need to do to influence customer retention?
Once you start thinking and putting your efforts into customer retention, it is essential to
consider the reasons and factors that enhance repeat purchases of your product or
service.
Let’s face it: customer retention strategies are not done on paper – you need to have a
wide range of data and information about your customers to be able to measure and
analyze your customers’ behavior.
And for that you need a CRM system!

7 practical examples of customer retention strategies

You and I are both customers.
And we both want to feel like individuals, not like units of a target group.
To be able to treat customers individually, businesses need to store a lot of information
about them. That is why, having a good customer database that keeps records of all
interactions and transactions is key to building long-lasting customer partnerships.
Here are 7 customer retention techniques you can implement using your CRM software
to keep your customers by your side and increase revenues on the side!
1. Listen to your customers
Tackling churn problems at your company starts by actively listening to whatour
customers are saying about their experience.
Unfortunately, there is a massive gap between companies that believe are providing a
superior customer experience (80%) versus customers that believe they received a
superior customer service (8%).

In a report by Oracle, 89% of costumers surveyed claimed to switch to a competing

brand after having a bad experience.
So what’s the best way to understand how customers feel about your company?

Ask them!
EXAMPLE: Put together a list of customers based on unique variables, such as inactive
customers, most active customers, and new customers. Then, send them a quick
survey to identify areas of your business that are working well or needs improvement. 
According to a survey by Oracle, poor customer service is the biggest reasons why
customers leave. In fact, 89% of customers move on to a competing brand after having
a bad experience with one company. Maybe your customers aren’t feeling a connection
with your company, or they don’t feel that they’re appreciated enough. Reaching out to
engage with your users can help you earn their loyalty and reduce churn rate.
Was your customer service good enough? Did your product meet their expectations?
Was it a good value for money? Just ask, listen and improve.
Use your customers feedback to restructure systems anad processes for a better
customer experience.
2. Notice churning signs in advance
The most obvious way to ensure customer retention is to prevent a customer from
leaving.
If you really pay attention, you can always detect the signals of your customer’s
impending departure.
To capture these “warning” signals, you need to identify the key variables of customer
behavior, such as purchase patterns, product usage and history of customer service
enquiries. Then, you’ll need to analyze these signals and take action to stop your
customers before they churn.
All this is possible with a CRM system.
EXAMPLE: Let’s say you want to know how many of your customers didn’t purchase
anything in the last 6 months, which might be a sign of them considering quitting your
services and taking their money to your competitors.
First, create a list of all of your customers, and then create a list of all sales made within
the last six months using your CRM software. By comparing these lists, you end up with
a list of customers who haven’t purchased from you in more than half a year.
You can now send follow up emails to these customers and find out the reasons why
they are not purchasing, and prevent them from leaving your business.
3. Target customers with special offers
The more you know about your customers, the better you can tailor your approach to
each individual.
CRM software lets you view a customer’s purchase history, so that you can determine
what kind of offer will be the most appealing to each individual and increase relevancy,
which will keep your brand on your customers’ minds.
What you need right now is identify ways to revive their interest and convert it into an
actual purchase! You can do it by offering them special discounts or some additional
value for your product.
EXAMPLE: Let’s say you want to follow up on the customers who showed active
interest in your product, but haven’t bought anything from for quite some time.
Using your CRM software, you can create a list of all customers who haven’t bought
anything for a longer period of time, and compare it with a list of all contacts who
subscribed to your newsletter. The result is a list of contacts that are actively interested
in your product, but who, have not shown any signs of life for a while.
Send them a special offer deal or a discount on a new products and make them feel that
you care and haven’t forgotten about them.
4. Automate emails via trigger-based events
Customers go through different phases after making a purchase. If you can send out the
right emails at certain periods of time, you can capitalize on opportunities to strengthen
relationships and reduce customer churn.
Triggered-based emails tend to have 5x higher open rates and 15x higher click-through
rates.

EXAMPLE: When a customer becomes inactive for a pre-defined period of time,

sending an “activation” email campaign can reengage them with your business. An
activation email typically includes information or tips on how to get started the product
they purchased. Or, you can also use this to offer a one-on-one meeting to address any
questions they may have.
Combine this strategy with information captured in your CRM database to create
personalized emails sent to your customers’ birthdays, special occasions, and more.
5. Reward your most profitable (VIP) customers
Information gathered in the CRM software can tell you which of your accounts are your
most profitable. These are the customers you really don’t want to let go of, your key
accounts. For this purpose, let’s call them the VIPs.
Knowing who brings you most revenue allows you to allocate your time and resources
efficiently, as well as increase your chances of cross-selling or up-selling.
EXAMPLE: Let’s say you have a number of incentives to give away. Use them to
reward your VIPs to further increase their loyalty.
It’s easy: just create a list of your VIP customers in your CRM software. Now, you can
start to follow up and let them know about the rewards and incentives in order to make
them feel special, so they continue to be your most profitable customers, which, if
you consider the 80/20 rule, this investment is bound to pay off!

6. Personalize your follow-ups

A relationship is something that is established between people, and CRM software
makes it easier for you to see your customer as a person and not just a number.
When you register a new customer in CRM, use the information given, providing it's with
their consent, so you can personalize the communication in the future. The more
information you have, the easier it will be to tailor your follow-up strategies.
The effects of personalization cannot be understated, as research from
Econsultancy found that personalization based on purchase history, user preferences
and other relevant information typically found in CRM software delivers a high impact
ROI.

EXAMPLE: Let’s say you’ve met most of your customers already during the trade
seminars you organize. However, there are still some decision makers who haven’t
come to your seminars and, therefore, you want to contact them for individual follow-ups
or maybe up-selling. How do you do that?
First, create a list of all of the contacts you have registered in the CRM software. Next,
create a list of all customers who have attended your seminars during the last twelve
months. By combining those two lists, you are left with a set of contacts who have not
attended your seminars.
Now, you know whom to follow up on with a personal invitation!
7. Keep your follow-up promises
Keeping your promises is the ultimate sign of professionalism in business.
The scheduling features in a CRM software allow you to schedule follow-up calls or
emails in advance, or assign follow-up tasks to members of your team. By doing this,
you’ll be able to keep track of your appointments, as well as complete any tasks that
you said you’d do when you said you’d do them.
EXAMPLE: Let’s say you have a list of customers that you need to catch up with and
possibly update their information.
Time flies and … now it’s time to do it! But, you check your schedule and you see that
you won’t be able to keep your promises to customers on time. In this case, you can
always assign some of your colleagues to follow up on these customers and, with just a
few clicks, create follow-ups in their diaries.

Conclusion
Even though gaining new customers is a sign of business growth, losing customers is
simply too expensive, as the average global value of a lost customer is $243!
Your existing customers give you a great chance to increase your profits, as they are
more likely to buy from you, than prospects.
And in order to make it happen, you need a tool to keep your relationships alive – CRM.
With the help of a CRM software, you can gather and manage information on your
customers and also manage activities around customer engagement.
Use the data that the CRM software provides to not only retain customers, but also to
keep them happy and grow profits – all without the added expense of acquiring new
customers.
CRM stands for Customer Relationship
Management. It's a technology used to manage
interactions with customers and potential customers. A CRM
system helps organisations build customer relationships and
streamline processes so they can increase sales, improve
customer service, and increase profitability.
How do we define CRM?
 
Customer Relationship Management (CRM) is a strategy for managing all your
company's relationships and interactions with your customers and potential customers.
It helps you improve your profitability.
More commonly, when people talk about CRM they are usually referring to a CRM
system, a tool which helps with contact management, sales management, workflow
processes, productivity and more.
Customer Relationship Management enables you to focus on your organisation’s
relationships with individual people – whether those are customers, service users,
colleagues or suppliers. CRM is not just for sales. Some of the biggest gains in
productivity can come from moving beyond CRM as a sales and marketing tool and
embedding it in your business – from HR to customer services and supply-chain
management.

Components of Customer Relationship Management

(Taylor, 2014)
There are a number of different components of Customer Relationship Management
that are essential to run an organization towards success. Every component is unique in
itself and plays a major undeniable role in the process.

Components of Customer Relationship Management

Sales Force
Sales Force Automation is the most essential components of customer relationship
management. This is one such component that is undertaken by the maximum business
organizations. It includes forecasting, recording sales processing as well as keeping a
track of the potential interactions.
It helps to know the revenue generation opportunities better and that makes it very
significant. The component also includes analyzing the salesforecasts and the
performances by the workforce. To achieve an overall improvement in the development
and growth of the industry, numerous components work hand in hand to form salesforce
automation as a consequent unit. Some of the major elements of the same are Lead
Management, Account Management, Opportunity Management, Forecasting, Pipeline
Analysis, Contact Management, Activity Management, Email Management and
Reporting.
Human Resource Management
Human Resource Management involves the effective and correct use of human
resource and skills at the specific moment and situation. This requires to be make sure
that the skills and intellectual levels of the professionals match the tasks undertaken by
them according to their job profiles. It is an essential component not only for the large
scale corporations but the medium industries as well. It involves adopting an effective
people strategy and studying the skills or the workforce and the growth being generated
thereby designing and implementing the strategies needed accordingly with the aim of
achieving development.
Lead Management
Lead Management as the name suggests, refers to keeping the track of the sales leads
as well as their distribution. The business that are benefitted by this component of CRM
the most are the sales industries, marketing firms and customer executive centres. It
involves an efficient management of the campaigns, designing customized forms,
finalizing the mailing lists and several other elements. An extensive study of the
purchase patterns of the customers as well as potential sales leads helps to capture the
maximum number of sales leads to improve the sales.
Customer Service
Customer Relationship Management emphasizes on collecting customer information
and data, their purchase informations and patterns as well as involves providing the
collected information to the necessary and concerned departments. This makes
customer service an essential component of CRM.
Almost all the major departments including the sales department, marketing team and
the management personnel are required to take steps to develop their awareness and
understanding of the customer needs as well as complaints. This undoubtedly makes
the business or the company to deliver quick and perfect solutions and assistance to the
customers as well as cater to their needs which increases the dependability and trust of
the customers and people on the organization.
Marketing
Marketing is one of the most significant component of Customer Relationship
Management and it refers to the promotional activities that are adopted by a company in
order to promote their products. The marketing could be targeted to a particular group of
people as well as to the general crowd. Marketing involves crafting and implementing
strategies in order to sell the product. Customer Relationship Management assists in
the marketing process by enhancing and improving the effectiveness of the strategies
used for marketing and promotion.
This is done by making an observation and study of the potential customers. It is a
component that brings along various sub-elements or aspects. Some of the major
elements of marketing are List Management, Campaign Management, Activity
Management, Document Management, Call Management, Mass Emails and Reporting.
The use of the aforesaid elements varies from business to business according to its
nature and requirements as well as the target crowd.
Workflow Automation
A number of processes run simultaneously when it comes to the management and this
requires an efficient cost cutting as well as the streamlining of all the processes.The
phenomenon of doing so is known as Workflow Automation. It not only reduces the
excess expenditure but also prevents the repetition of a particular task by different
people by reducing the work and work force that is getting wasted for avoidable jobs.
Routing out the paperwork and form filling are some of the elements of the process and
it aims at preventing the loss of time and excess effort.
Business Reporting
CRM comes with a management of sales, customer care reports and marketing. The
customer care reports assist the executives of a company to gain an insight into their
daily work management and operations.This enables one to know the the precise
position of the company at any particular instance. CRM provides the reports on the
business and that makes it play a major role here. It is ensured that the reports are
accurate as well as precise. Another significant feature is the forecasting and the ability
to export the business reports on other systems. In order to make comparisons, one can
save historical data as well.
Analytics
Analytics is the process of studying and representing the data in order to observe the
trends in the market. Creating graphical representations of the data in the form of
histograms, charts, figures and diagrams utilizing the current data as well as the one
generated in the past is essential to achieve a detailed understanding and study of the
trends. Analytics is an extremely significant element of Customer Relationship
Management as it allows to make in-depth study of information that is required to
calculate the progress in the business.
Different components of Customer Relationship Management are associated with
different elements mainly, the customer acquisition, improved customer value and
customer retention. Various marketing applications are carved out to acquire more
customers whereas data warehousing and analytical tools help the business to hold
customers with a better communication and relationship.In order to enhance the
customer value among the existing and future customers, there is a number of data
warehousing and analytical tools.
AI in CRM
Artificial intelligence technologies, such as Salesforce Einstein, have been built into
CRM platforms to automate repetitive tasks, identify customer buying patterns to predict
future customer behaviors and more.
Overall, each of the discussed components of Customer Relationship Management is
very essential to improve the work structure as well as the market response to the
business and their products.

Types of CRM Technology

There are three main types of CRM software are operational, analytics and
collaborative. Here’s more:

1. Operational CRM: Uses sales and marketing automation to give you a complete

view of each customer’s journey.
2. Analytical CRM: Analyzes your customer data and identifies patterns to help you
make better business decisions.
3. Collaborative CRM: Organizes and shares customer information with your
internal and external stakeholders.
Understanding the benefits of each type of CRM will help you choose the right one for
your business.
Keep reading to learn more about each type of CRM.
 
What is an operational CRM?
An operational CRM gives you a complete view of each customer’s interactions with
your company. These sales CRMs use sales and marketing automation to save you
time — and make sure no contacts or tasks fall through the cracks.
What are the features and benefits of an operational CRM?
1. Contact management. You don’t have to keep track of leads in your head. With an
operational CRM, you can manage your contacts in a central platform.
Each time a contact interacts with your company, the CRM automatically updates their
contact details.
Your team can track every interaction and pick up where someone else left off, making
sure no contacts slip out of your funnel.
2. Lead scoring. Operational CRMs can automate lead scoring and win probability so
that you know which leads to nurture with automations or a personal touch.
Lead scoring helps you figure out:
 Which leads are the highest priority?
 Who is most likely to become a customer?
 Which leads will spend the most over time?
3. Sales team automation. An operational CRM can stop sales tasks from piling up or
getting forgotten. Automatically assign tasks to your sales team based on customer
actions or deal value.

In this sales automation, an ActiveCampaign user chooses to assign a task based on

the deal value.
If the deal value is
above  500,theCRMwillautomaticallyassignataskforasalespersontocallthelead.Ift
hedealvalueisbelow500, the lead will automatically be entered into a nurture
campaign.
And speaking of automated lead nurture…
4. Marketing automation. An operational CRM can help you automate how you market
to leads and prospects. You can drop people into email funnels based on the
information you have about them.
What information can you use to automate?
 Account size
 Purchase history
 Product/service interest
 Type of organization
  Organization size
 Estimated close time
 Interaction with your sales team
 Interaction with your marketing messages
 Visits to specific pages of your website
 Almost any other info you can collect
If a lead has spoken with a sales rep several times and downloaded content from your
site, they already know who you are. They’re a “warm” lead. You should use a different
funnel, shorter than the one you’d use for a contact who filled out a form on your site,
but never spoke to a sales rep.
Who should use an operational CRM?
You should choose an operational CRM if…
 You spend too much time trying to keep contact information organized
 You need a clear view of each customer’s activity and profile
 You want to use lead scoring and win probability, but don’t know where to start
 You manually assign each task and lead to your sales team
 You want to scale your email marketing efforts and grow your database
If you want to save time on sales and marketing and keep everything in one place,
consider an operational CRM.
What is an analytical CRM?
An analytical CRM gathers, organizes, and analyzes your customer data and sales data
to help you make better business decisions.
This data can include the average deal cycle, customer retention rates, monthly
recurring revenue, and any other information you collect.
Business intelligence meets contact management. An analytical CRM makes sense of
your data — including some you might not even know you have. (Illustration by Tony
Babel via GIPHY)
 
What are the features and benefits of an analytical CRM?
The biggest benefit of an analytical CRM? It does the data gathering and analysis for
you. Here’s how.
1. Data mining. An analytical CRM serves as a data warehouse: it stores your data in
one central, organized, easy-to-analyze database.
Data mining uses statistical analysis to find patterns and relationships in your data. One
common use of an analytical CRM is cluster analysis. With cluster analysis, you
can segment your customer list based on:
  Age
 State
 Education level
 Gender
 Marital status
 Past purchases
 And a whole lot more!
This lets you target the right people with the right messages.
Other common analyses include linear, logistic, and multiple regression.
Analytical CRMs do the math for you, so you don’t have to create the world’s most
complicated spreadsheet to identify sales trends.
2. Cross-sell and upsell opportunities. Analytical CRMs give you insight into your
customers’ behavior and past purchases. This gives you the perfect setup for cross-sell
and upsell opportunities.
Which customers want to buy which products? An analytical CRM can help you find
patterns in purchase history – so you know exactly which people to target with upsells
and cross-sells.
3. Buyer persona building. When your CRM gathers and analyzes a new piece of
customer data, you can build a more complete view of your customers. Understanding
your customers’ wants, needs, and personalities can help you improve your marketing.
When you personalize the customer experience with personas, your customers know
you understand them. This can make a big difference in your bottom line. Take a look at
the numbers:
Companies who personalize their marketing with buyer personas see better
 results. (Source: Red-Fern Media)
4. Sales forecasting. Analyzing data on your company’s past sales trends can help you
predict future demand.
What kinds of sales trends are important?
 If sales spike in the summer and dip in the winter, you need to manage seasonal
inventory and staffing
 If some months are historically higher or lower performing, you can incorporate
that information into your sales targets and quotas
 If contracts tend to get signed at the end or beginning of a specific quarter, you
need to know the right time to follow up
Sales forecasting makes sure that you aren’t surprised by predictable long term trends.
5. Attribution. Analytical CRMs help you figure out which touchpoints led someone to
become a customer. This helps you figure out where your best customers come from –
and how to sell to them better.
Touchpoints include viewing or clicking on an ad, visiting your website, and any other
interactions a potential customer has with your business.
 First-touch attribution links revenue to a lead’s first interaction with your company
 Last-touch attribution links revenue to a lead’s last interaction with your company
before becoming a customer
 Multi-touch attribution links revenue to more than one touchpoint. An analytical
CRM with multi-touch attribution assigns different weight to each touchpoint
across the buyer journey. Your CRM attributes revenue to each touchpoint based
on its weight.
With attribution, you can see which marketing efforts have the biggest impact. These
insights help you do more of what works, and less of what doesn’t.
Who should use an analytical CRM?
You should consider an analytical CRM if…
 You want to better understand why customers are (or aren’t) buying your
products
 You want to gather more data about your target customer
 You want to build customer personas based on data
 You want to figure out which touchpoints drive the most revenue
 You spend too much time poring over spreadsheets — and not enough time
selling
 You want to track your sales KPIs
 You want to improve your sales process or strategy based on business
intelligence data
What is Collaborative CRM?
Collaborative CRMs (also called “strategic CRMs”) share customer information across
teams. This includes internal and external stakeholders, such as other departments,
suppliers, vendors, and distributors.
Don’t worry — analytical and operational CRMs can (and should) still be used for
collaboration between teams.
The biggest difference? A collaborative CRM focuses more on customer service,
customer satisfaction, and customer retention than customer acquisition.
What are the features and benefits of a collaborative CRM?
1. Interaction management. Like an operational CRM, a collaborative CRM helps keep
track of each interaction a customer has with your business.
Every customer-facing team — sales, support, community management, vendors, and
anyone else who so much as sends an email — has access to a log of customer
interactions and team notes.
When you share notes across teams, you get access to a treasure trove of information.
 Feedback from the support team can help you figure out how to sell to future
customers
 Conversations in your communities can help you understand what new products
your customers want
 Notes from sales calls can help you understand what language to put in your
marketing materials
Each team has information about your customers. A collaborative CRM helps break
down silos and share that information across teams.
2. Relationship management. A collaborative CRM helps you manage relationships with
your customers. When a new customer comes on board, your sales team shares that
customer’s preferences, goals, and any other information on their contact profile.
Keep all teams aligned and up to date before they interact with each customer. This
gives people a better, more personalized experience across the board.
3. Document management. If your team needs access to a contract, technical
documentation, or proposal, a collaborative CRM can help. CRMs with document
management systems help keep every document from every team organized.
You don’t have to search through your desk or pester your finance team to hunt down a
pricing agreement — it’s all in one easy-to-navigate place.
Who should use a collaborative CRM?
You should consider a collaborative CRM if…
 You need to improve communication between departments
 You want to focus on customer retention and loyalty
  Your customers often have specific preferences and needs
 You need to share customer information with vendors
 You want to organize and align customer-focused efforts across your business


 You know each type of CRM. So… now

what?
We hope you feel a little bit closer to choosing the right type of CRM for your business.
But how can you make sure you pick the best of the best in that category?
Make sure that your new CRM checks these boxes:
 Integrates with your existing technology
 Gives you live, talk-to-actual-humans support
 Makes it easy to migrate contacts and automations from a previous CRM (if you
have one)
 Creates less day-to-day work for your team — not more
With all of the above met — no matter which type you choose — you’ll be well on your
way to CRM bliss.