Tips to make sure your organization is getting the most from your CRM system to boost sales and productivity.
Originally published by TMCnet. Reposted with permission.
What do all these terms that follow have in common? They are some of the most common terms we use when talking about Customer Relationship Management (CRM). We've all come across them and used them at one point or another, but did you know that many people don't use these terms correctly? It's true! Here are 9 CRM terms that many people misuse:
CRM technology is expected to be worth roughly $128.97 billion in 2028, indicating a CAGR of 12.1% over the following seven years. Contact management is one of the most important aspects of CRM, so you must know how to do it right. Contact management is so important that many people think of it as their CRM.
Many businesses start by making a list or spreadsheet of their customers and contacts and calling it a day. But if all your information is in one place, then what's stopping you from finding out more about your contacts?
Contact management means keeping track of your customers and prospects in an organized way so that you can find out everything there is to know about them quickly and easily. This will help you manage every aspect of your relationships with clients and get more sales as a result!
The second inaccurate term related to CRM is "Customer Relationship Management."
CRM is short for Customer Relationship Management. It's a system that helps you manage your customers. And it's one of the most important parts of running any business. Without a good CRM in place, you can't accomplish anything else.
When someone says they're using CRM, what they mean is that they're using a software program designed to track and organize their contacts with customers or leads. Think about how many people contact your business every day: emails from potential clients and phone calls from existing customers who need help or want to buy something else. These are just two examples of interactions with customers that you'll want to keep track of if you want to run an effective company.
Take a virtual receptionist, for example. Virtual receptionist software is an automated system with a human-sounding voice that answers incoming calls, records the name of the caller and their message, routes them to a designated extension, and plays back the recorded message when the recipient returns. The software can also be configured to forward the call to another number or voicemail if no one picks up.
The digital receptionist is integrated into your CRM software so that you know who called, what they said, and how long they waited before leaving a message. You can also see which numbers have repeatedly been calling without leaving messages or being answered by your staff.
A lead is an individual or organization that has expressed interest in your product or service. A lead is not a customer. Nor is it someone who has bought from you. A lead may never become a customer at all! So don’t believe the hype about “leads”—they are not what they seem. When you receive information from an individual or organization via a form submission or other interaction, this person becomes a prospect.
A good way to think about leads: they are people who have told you they like something specific about your company and/or product offering but have not yet taken any action beyond simply expressing interest.
A prospect is a potential customer. Prospects are people or businesses who have not purchased from you or your company. They may be interested in what you have to offer. But they have not decided to buy it yet.
Prospecting is the process of finding prospects and engaging with them until they become customers. It's a crucial part of every successful sales team's strategy because it helps attract new clients and grow revenue over time. A good salesperson can tell when someone needs their product or service and will use their knowledge of the industry to find opportunities for selling to this person.
The sales pipeline is a visual representation of the sales process. It shows the number of prospects at each stage of that process, so you can analyze your performance and forecast future revenue.
Imagine this: you have a sales agent who has sent out 100 emails to potential clients in the last week. You want to know how many people replied favorably, so you look at your pipeline report for this agent and see that three people are currently interested in buying from your company. Three seems like a good number. But now, let's say one month later, after sending out another 100 emails, only two people have replied favorably. Why did this happen?
This is where having access to data about prospects' buying habits becomes valuable; it allows us, as marketers/business owners/salespeople, to understand how long it takes before someone buys something from us based on their current level of interest. More than 91% of businesses with 10 or more workers use a CRM to handle client relationships.
The close rate is the percentage of deals closed. It’s calculated by dividing the number of deals closed by the number of leads generated and should be around 2% to 3%. The higher your close rate, the better you are at turning leads into clients.
Now that we know what a close rate is, let's take a look at how to calculate it:
(# of Deals Closed) / (# of Leads Generated) = Close Rate
A sales cycle is the series of steps that you go through with a prospect to turn them into a customer. It can be thought of as an “in-and-out box” that you work through with each prospect:
This is a common mistake. User acceptance is a subset of user adoption, which means that you're not doing CRM if you're just getting users to use it. You have to get them to accept the system as well.
Research has found an ROI of around $30.48 for every dollar spent on CRM in 2021. User adoption is about getting people to use your product or service; ideally, they like using it and would miss it if they stopped using it. User acceptance means that people will continue using your product even if there's an alternative available. For example, if there was a competitor who offered something similar for free or at a lower price than what you charge for your service or product, would your customers still stick with yours?
A great way to think about these two terms is by thinking about when people were first given mobile phones. Most people didn't know how to use them and therefore couldn't be said to have adopted them yet (they were only just starting). But once they became comfortable with their new devices (and figured out how they worked), many began taking them everywhere, so much so that they couldn't live without them!
Customer metadata is data about your customers. It can be used to help you target customers with more relevant content. It can also be used to build relationships with them, predict their behavior and sales cycles, as well as other things.
For example, if you know that a specific group of people has purchased multiple times from you in the past, that means they’re probably more interested in buying again than someone who hasn’t bought anything from you before.
Hopefully, this post has helped you understand the true meaning behind some of these terms and what they mean for your customer relationship management (CRM) strategy.
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