Customer Relationship Management (CRM) dates back to the 1980s when the business and marketing industries shifted their focus from being “product empathetic” to “customer empathetic.” The technological age has made CRM more comprehensive by introducing data-driven, automated software systems, but are we taking the right approach?
Understanding the pros and cons of using software-based CRM can help identify and fill the gaps in understanding consumer demands and strengthening customer relationships.
The Pros of Software-based CRM
Technology has proven to be an indispensable tool for improving customer relationships. Data is now considered the globe’s most valuable resource as technology evolves. The aim of software-based CRM is to collect and analyze consumer-based data to gain better insight and implement better business practices. This approach has proven to be quite successful for businesses in various ways, including:
- Streamlined communication and engagement with customers
- Better knowledge of demographics and target-audiences
- Higher customer acquisition and retention
- Automation of essential, everyday tasks
Having access to real-time data allows companies to anticipate shifting trends in consumer demand, such as the increasing demand for socially-conscious and sustainable business practices. To meet your customers’ needs and expectations, you first have to know what they are, both short-term and long-term.
The Cons of Software-based CRM
As data mining becomes more pervasive, the sheer amount collected can be overwhelming and rendered useless from a customer relationship and marketing standpoint. It is essential to remember that effective customer relationship management is not only based on software and data-driven approaches.
Although data-driven software may be an integral aspect of modern-day CRM, much more is involved. When implementing a software-based strategy, it is vital to be aware of common pitfalls:
- Over collection of data leading to a lack of focus or a defined set of goals
- Break down in company leadership due to overreliance on software automation
- Loss of the “human element” when it comes to marketing and customer relations
- Overhead costs and the risk of working with the wrong vendor for your company
As any futuristic, dystopian novel would tell us – it is critical never to lose touch with the human aspect of our existence. Automation is no match for critical analysis and human insight to meet customer needs and surpass expectations.
A More Human Approach to Customer Relationships
As with any useful tool, the key lies in understanding how and when to use software-based CRM effectively. Before implementing any business strategy, including customer relationship management, you need to have a clear and well-defined set of goals. To begin, ask yourself some basic questions:
- Who is your target audience, and what are their needs as consumers?
- Where do you fit-in in the business sector, and what kind of impact do you wish to have?
- What is the best way to deliver your message and expand your customer base?
- How do you intend to ensure transparency and respond to customers’ concerns?
Numbers and statistics can be helpful tools for developing marketing strategies. Remember, data is merely a reflection of consumer trends, and human behavior is dictated by more than numbers on a spreadsheet. When it comes to customer relationships, you should take a more human-based approach than relying on software systems alone.
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Laura LaFrenier is a content and freelance writer who is currently pursing a bachelor’s degree in Communication & Information Design at SUNY Polytechnic Institute. Laura is a frequent contributor and marketing writer with Seven Oaks Consulting.
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