CRM Marketing 101

What is a CRM?

If, according to management guru Peter Drucker, the purpose of a business is to create and keep a customer, then Customer Relationship Management is the process of managing and strengthening the relationships with current and potential customers.

With the advent of computers and the rise of digital technology, the tools used to manage relationships with customers have evolved as well, with technology being used to manage these functions. In fact, it is quite common in everyday speech to refer to these Customer Relationship Management technologies or platforms, like Salesforce or Microsoft Dynamics, simply as a “CRM.”

In marketing-speak, a CRM is a system that allows businesses to track key customer information in a centralized database (e.g. customer contact information, purchase history, stage in the sales funnel), and then leverage this information for marketing efforts.

The rise of CRM Marketing

While CRM Marketing has been around for decades, its arrival as a focus of marketing departments owes a lot to the COVID-19 pandemic. Prior to 2020, most marketing efforts were focused on email marketing, with social media used to manage communities of customers who were already on a specific social media platform. At the same time, the systems used to communicate through these channels were often quite limited: for example, email platforms like Mailchimp could store basic information on the client like their name and email address, but often were not connected to the purchase history or sales potential of the client. What this meant in practice is that customers often received the same generic message despite key differences between the highest-performing customers and the lowest-performing customers. The technology stack was too simple to allow the messages to be personalized or targeted to the customer (if you have ever received an email with the salutation “Dear Sir/Madam” or “Dear customer”, despite spending your hard-earned money on a product, you’ve been a victim of this old-style marketing).

Flash forward to 2020, and the global movement to get more digital, led to the adoption of CRMs like Salesforce, Microsoft Dynamics 365, and many others across industries and sectors. What was once a very IT-driven function has now found its place within Marketing departments, where CRMs are now set up and used as central repositories of customer information, where all information from a customer is pooled into one place to get a 360-degree view on the customer to get accurate and actionable information in real-time. As the digital environment becomes even more crowded, there is an arms race to be more data-centric and customer-centric, with CRM Marketing used as short-hand for marketing that combines deep analytics and a robust technology stack for personalized 1:1 marketing.

CRM Marketing in action

CRM marketing with its focus on both current and potential customers (“leads”), allows companies to map out the marketing cycle and layer it on the CRM technology. It’s many functions include:

• Collecting current customer and potential customer information to build a list of these customers (e.g. using web/lead forms);
• Measuring the ROI on acquisition (e.g. by comparing the purchases of clients based on channel, marketing campaign, and price promotions, companies can assess the effectiveness of their marketing budgets);
• Using customer information to customize the user experience when the customer visits a website or platform (e.g. logging into a platform to be greeted with a Welcome <First Name> message);
• Targeting customers for up-sell and cross-sell opportunities based on their purchase history (e.g. customers who bought running shoes might receive coupons for athletic gear);
• Engaging customers in real-time through their activity or inactivity (e.g. an abandoned cart follow-up email sent to customers who have left an item in their shopping cart and not completed the purchase);
• Executing multi-channel marketing campaigns to current and potential customers (e.g. through email, social media, SMS, Push notifications, etc);
• For companies that rely on a Sales team, CRM marketing helps with pre-sales nurturing to build brand awareness and identify the best targets for sales calls (e.g. a “nurture” email series introduces the potential customer to the brand. Through this series of emails, the potential customer is taken on “a journey” of learning more about the product and brand. In parallel, the potential customer is measured on their engagement like opening and clicking on the email, and assigned a “lead score.” Once the lead score of a potential customer surpassed a pre-defined threshold, their information is then handed-off to the sales team to book a sales call. This entire process allows a Sales team to be more effective with their time as well as making the potential customer more interested in the sales conversation);
• Identifying proactively when a customer might no longer be interested in a product or service, and to run a “win back” campaign (e.g. customers who have not visited a clothing website in 30 days receive an email with content focused on “We miss you”).

By Khalil Guliwala. Khalil Guliwala is a CRM Strategist who specializes in using data and digital marketing to inspire customer loyalty. Get more from Khalil by following him on LinkedIn.