What Is a Sales Pipeline and How Do You Manage One?
ByDanica Djokic
March 01,2022
To run a successful business and transform leads into customers, you’ll really need to be taking advantage of your sales pipeline. So what is a sales pipeline? In short, this is a visual snapshot of every stage in the sales process that tells you at a glance whether you’re going to reach your goals. If used properly, it can have a positive impact on your growth. Our guide dives into more details, outlining the different stages, benefits, and ways to create and manage a pipeline.
A Rundown
The sales process involves many different stages, including identifying potential customers, contacting them, pitching the product or service, negotiating, and, of course, closing. The ultimate goal is to gain and retain loyal customers. Having a visual representation of this journey can help you make revenue forecasts, get insight into buyers’ trends, and keep track of sales prospects. So what does a pipeline mean in sales? Simply put, this is a breakdown of the whole sales process into smaller and trackable pieces.
Pipeline analysis enables you to track the evolution of sales opportunities into shopping orders as they move through several stages. The entire process is backed by recording and storing relevant data and activities. The pipeline helps you gain better insight into your deals and shows you the possible trajectory of your business. If you’re running a small business, using reliable CRM software that can generate a fully customizable pipeline can boost your profits.
The Shapes of Success: Pipeline and Funnel
Many people make the mistake of confusing a sales pipeline with a funnel. But these are two entirely different things. While the sales pipeline is a representation of the actual sales process or closing the deal, the sales funnel is all about leads and the process they undergo to become regular customers.
In other words, the sales pipeline is brand-focused and outlines steps that your marketing and sales team need to go through in order to gain and retain customers. On the other hand, a funnel is customer-focused and offers a representation of the buyers’ journey, starting from brand awareness to buying a product and staying with the company.
This clear distinction also expands on our original question: what is a sales pipeline? In short, the pipeline showcases the seller’s actions throughout the sales process, whereas the funnel tells you about the percentage of leads that advanced through each stage of the pipeline.
Benefits of Sales Pipeline
Having deciphered the sales pipeline, it’s time to look at some of the perks of using this strategic tool.
- Insight into deals: For starters, using a pipeline to track your sales process gives you insight into your teams’ progress and helps you identify areas for improvement. A sales pipeline, by definition, keeps track of your business’s financial metrics, so you’ll know which deals you’re most likely to close and which processes are ineffective and need to be removed. Sales pipeline analysis quickly exposes the weaknesses with certain deals and helps you plot a course of action to boost sales.
- Measure team performance: Selling a product or a service requires teamwork, and if one link in the chain performs poorly, the whole process will suffer. Optimizing the sales pipeline allows you to monitor sales representatives and if they’re hitting their targets. Thanks to sales pipeline reporting, you’ll be able to identify the weak links and improve the number of leads transitioning into sales.
- Predict profits: Crunching the data tells you where each sales representative stands in the sales process and how close they are to inking the deal. By seeing the number and percentage of deals that are likely to be closed and their value, you can easily make accurate forecasts regarding revenue.
- Help increase sales and profit: Building a sales pipeline won’t only assist you with monitoring and organizing your sales team. It’s also a useful tool for making projections by identifying the number of deals that your business needs to close in order to meet the targets and increase profits. Moreover, it helps you zero in on the steps that speed up the deal-making process and thus increase profits.
Step by Step: Pipeline Stages
Just like every industry and every individual business, sales pipelines are unique. Instead of simply copying one of the many templates, try to invest some time and effort into building pipelines with well-defined sales pipeline stages and adjusting them to fit your company’s needs. Consider employing CRM software to generate a pipeline, as statistics show that using it increases customer retention and satisfaction rates by 47%.
When setting up your own pipeline management system, think about sales targets, prospects, and the number of steps in the process. Make sure to have somewhere between five to eight stages that hinge on identifying prospects, evaluating their needs, convincing them to buy your product, closing the deal, and retaining them as customers through regular follow-ups.
Remember to tailor the different stages to the relevant industry. For instance, real estate’s customer relationship management strategy must include a house-viewing stage. In another sales pipeline example, a car salesman should probably include a test drive stage.
- Lead generation. Prospecting new leads interested in your product is the very start of every sales process. Raising brand awareness and reaching out to potential customers can come in different shapes. Some companies might use downloadable content, phone, emails, and ads on social networks. Others might go on the hunt for cold leads, and some might even hire lead generation companies to do the leg work. Whatever your chosen method, make sure to consolidate all new leads and follow them throughout the process.
- Lead qualification: To define a sales pipeline strategy, the next step should focus on identifying the potential buyers by researching their shopping preferences. Skipping this vital step can lead to sales reps losing a lot of time on cold leads. Sorting them from hot ones might be a game-changer and lead to successful closures.From the moment they enter the sales pipeline, contacts need to be researched. Conducting a phone survey or another questionnaire can help you determine whether the lead has the budget to afford the product if they need it and whether they’re ready to purchase it. If you’re wondering, what is a healthy sales pipeline, the answer is simple: it’s the one with hot leads. If the answer to the aforementioned questions is “no”, the lead should go down the drain; otherwise, it might clog your pipeline.
- Initiate contact: Those who make it through the sieve should immediately be contacted by sales reps. Leads that reach these stages of the sales process are interested in closing a deal with your company. That’s why you can safely ask them if they are eager to buy your product and present all the perks of purchasing it. Make sure to engage with the lead by sending a series of emails that educate them about the product.
- Schedule meeting or demo: What is a sales pipeline without an actual pitch? This is the part where you make your proposal. It can be done in person, via phone, e-mail, or even social media. Make sure to track and record conversations because searching through old emails can be time-consuming. Also, be well-prepared for meetings and demos because these brief moments can transform prospects into clients.
- Negotiation: If the lead expresses interest in buying your product or service, it’s time to start more strategic discussions. This usually involves the unveiling of the price and the terms and conditions of the contract. If you’re wondering how to get to this stage and what is the best process for a sales pipeline, always remember to align sales and marketing. This is a great strategy for getting to the negotiations stage.
- Closing the deal: From the very moment a lead enters the sales pipeline, the only desirable outcome is closing the deal. Once negotiations are completed, you can sign the contract, and you officially have a new customer. If you never make it to this stage, you were either trying to sell to the wrong person, or the sales rep failed to create/build value. So what do you do if a deal is lost in the sales pipeline? In these situations, it’s important to keep the conversation going and reconnect with lost prospects. Of course, the customers you gained shouldn’t be neglected either. Provide them with a good service during the onboarding process, inform them about upgrades and fresh promotions, ask them for referrals, and make sure they’re satisfied with the product.
Sales Pipeline Management
Understanding the pulse of the industry and adequately managing your sales pipeline is crucial for running a company in today’s digital world. Having access to a wealth of information and analyzing it enables you to use the numbers for strategic goals and boosting sales. That’s why we’ve answered the ultimate question: what is a sales pipeline, and how do you use it? Now it’s time to focus more closely on each stage of the process.
With careful sales pipeline management, you’ll be able to track and then evaluate all stages, identify bottlenecks, better understand the weaknesses and strengths of your deals, and thus predict and prepare for potential plunges or sudden growth.
The pipeline management process is made possible by six key characteristics: metrics, maintenance, optimization, sales team management, sales forecasting, and tool integration.
So, what is a good sales pipeline size? The truth is size doesn’t matter. You can add as many stages as you think are needed, but what matters the most is good pipeline management. So let’s dive deeper and explain the details.
- Sales pipeline metrics: Analyzing the sales process wouldn’t be possible without a wide variety of metrics to show you where your business stands. Pay close attention to the number of deals in your sales pipeline, their average size, the average percentage of closed deals (deal close rate), and the average lifetime of a deal before it’s closed (sales velocity). A common question entrepreneurs ask is: what is a good conversion rate for my sales pipeline? In the beginning, the percentage of opportunities that turn into leads should be around 50% to 60%. However, as time goes by and you get a better insight into the flaws and merits of your sales process, a pipeline report should show a conversion rate of around 80% to 90%. Make sure to track the data on a weekly basis so that you can predict future sales trends.
- Unhealthy measurements monitoring: Pipeline health spot-checks can show you bottlenecks, such as dead leads or too many unresolved deals that cause stagnation. Improving these metrics is crucial for boosting your revenue. So, what is a quota in the sales pipeline competition? This is an essential question for every entrepreneur. Keeping an eye on target sales your reps have for a certain period can help you understand them better. According to MarketingProfs research, 67% of sales representatives do not meet their individual quotas. That’s why regularly checking up on your sales pipeline report and keeping it organized is crucial. These are the steps for unclogging your pipeline: - Pinpoint sluggish leads - Decide what to do with them - Get in touch and reevaluate their interest
- Update your sales pipeline stages: When trying to figure out how to build a sales pipeline, the first thing to consider is your individual business preferences. But over time, some of the steps that you thought were initially important may become inconsequential. Some cycles might become too lengthy and time-consuming, while some can be too cumbersome. Consider removing them because pipelines that are too long risk having prospects fall through the cracks or change their mind. The sales cycle length is an important factor, so keep it short and effective but do not cut out the critical stages to achieve that. While building a sales pipeline, keep in mind that including a follow-up stage is a must and that a precise prospecting stage means more closed deals. After all, what is a pipeline management strategy without adding extra stages? Keep an eye on new trends in the market and adapt to them accordingly by implementing additional steps in the sales process.
- Coach your sales team: By assisting the sales representatives and coaching them on pipeline management, you’ll empower them to get more control over their targets. Working with your team will help them better understand the amount of time that leads need to spend at each stage and use it to their own advantage. Another thing to pay attention to is teaching the sales reps how to clean pipelines effectively. Being a good pipelines manager also means knowing the answer to the question: what is a pipeline report? Instruct your sales reps to monitor sales pipeline metrics and generate reports on the gathered data to get the most from the numbers.
Bottom Line: Being a Good Plumber
Knowing how to be a good plumber to your sales pipeline, how to unclog the bottlenecks, and regularly clean and maintain it is a skill worth mastering. A healthy sales pipeline is the beating heart of a business. It can show you and your team members where your company stands, how many deals are closed, how many prospects turned into customers, where the process is stagnating, and which elements need to be removed.
If you can answer the question: what is a pipeline in business, you’re probably all too familiar with the difference between closed deals and cold leads. The visual snapshot shows the trajectory of your prospects on their buying journey and can provide you with helpful insight into the metrics and boost your sales.
FAQ
Why is a sales pipeline important?
Having a good sales pipeline that visually represents your buyers’ journey can help you get insight into consumer trends. This will enable you to make revenue forecasts, keep track of sales prospects, and pinpoint the sluggish steps in the process that need to be removed or upgraded.
What is the sales pipeline?
A sales pipeline is the visual representation of your business’ sales process that goes from presenting the brand to gaining loyal customers and retaining them. It depicts every step that your sales representatives take to push a deal forward from start to close.
What are the stages of a sales pipeline?
As every business is unique, so are sales pipelines. Depending on the type of the industry and the company’s preferences, pipelines usually have between five up to eight stages. Some of the most common ones are: lead generation, lead qualification, contact initiation, scheduling a meeting or a demo, negotiating, and closing the deal.
How do sales pipelines work?
This question is often asked by those wondering what is a pipeline report used for. Sales pipelines show you how many deals sales representatives are expected to close in a given period. They also provide you with insight into relevant metrics, thus enabling you and your team to analyze the data, predict the profits, and work on weaknesses in the sales process.
What is the sales life cycle?
It’s a set of stages the sales representatives go through to close a new customer. The sales cycle contains a set of specific actions such as prospect, connect, research, present, close, and follow up. All are designed to follow the whole process of selling a product or a service.
How do you prepare a sales pipeline?
Preparation is as important as following the actual stages. After all, what is a sales pipeline without the proper prep? This helps you research the market, identify potential buyers, and adapt the pipeline to your type of industry before building one.
More From Our Blog
As technology evolves, our ways of working and running a business change rapidly in an everlasting push for more efficiency and productivity. When you apply that principle to customer relations - a key factor for most businesses - you get Customer Relationship Management tools. As your business grows, adding customer data manually to sheets, or worse, notepads, will inevitably become futile. That’s where CRM tools come in to save the day.
Let’s Get Started: A CRM tutorial
Not all CRM systems are the same, so having a clear picture of the different types of CRM can help you choose the best way of managing vital customer, prospect, and lead data. Congrats on deciding to use one in the first place! A good CRM can make a difference in your relationships with customers, boost your CLV (Customer Lifetime Value), and promote business growth.
According to CRM statistics, companies that use such systems successfully have improved their sales by 29% on average. Employing such an ecosystem for customer data, along with a set of far-reaching solutions, brings a whole new dimension to company life. CRM approaches rely heavily on sales forecasting, lead management, and dashboard-based analytics. The best CRM tools for your small business can help you organize and grow your customer base. Their most important asset is that the software can turn data into valuable insights you can then translate into transformative actions for your business.
Different CRM Software
One of the uses of a CRM is benchmarking your business against the best companies out there. Still, you don’t want to use the first option you come across, as there are many types of CRM software, and their benefits vary greatly. All customer relationship management programs fall into one of the five main buckets: Operational, analytical, collaborative, campaign management, and strategic CRMs. Let’s dive into the details of each:
Operational Customer Relationship Management
If you’re running a business and both you and your staff are overwhelmed with the administration, data entry, syncing, and updates, we feel you. Workflow automatization would be a game-changer for your company: Having all the information in one place would help avoid miscommunication, and facilitate marketing, sales, and service processes. This, in turn, would take much of the manual burden off your employees’ shoulders. The hero you need is an operational CRM.
To ensure that everything goes smoothly, such CRM systems leverage the following tools:
Marketing automation
Sales automation
Service automation
The automatization of manual tasks frees up valuable time for much more complex tasks your employees need to tackle. For example, coordinating email campaigns, reaching out to potential customers, and distributing content can all be easily streamlined using CRM software. Different sales processes that help bring consumers on board, as well as communication with customers via live chats, email, and other customer service tools can also be delegated (partially or in full) to the right software.
Businesses that can benefit from these types of CRM products include those with more linear sales processes and those in need of help with sorting out and storing customer data. Real estate companies, in particular, can benefit from specialized operational CRM software to boost their productivity and profits.
Analytical CRM
If streamlining sales isn’t your top priority, but you’d rather focus on using customer data to understand your audience better - say, their shopping habits - then analytical CRM software might be just the thing. Gathering information about your customers can get you insight into their preferences, trends, and behavioral patterns. The crucial components are:
Data warehousing
Data mining
OLAP tools
Using analytical CRM tools enables businesses to store customer data in a single, easily reachable place and, more importantly, track and analyze it for patterns and trends. OLP stands for Online Analytical Processes and can help you realize when, how, and where your customers reach out to your company and its platform. This information can be further applied in marketing strategies that target specific customer categories.
When choosing your fighter in an operational CRM vs. analytical CRM duel, keep in mind that the first focuses on facilitating relationship-building and maintaining tasks, whereas the latter attunes to the data you have on your customers to help you develop business strategies. Both types of CRM could benefit your company, but if you want to focus on pinpointing your audience’s needs, an analytical CRM is what you need.
Collaborative Customer Relationship Management
The third major CRM type deals with the gathered information in a different manner. Namely, this breed of CRM emphasizes collaboration and customer support services. It allows the various teams in your organization to share data and improve cooperation between departments such as marketing, sales, and support. This type of software use the following tools:
Interaction management
Channel management
Using collaborative CRM products will help your business better cater to its customers through different channels: live chat, e-mail, phone calls, or social networks. Determining the best communication channels isn’t the only thing this CRM type can help with: Tracking interactions between the company and its customers using logs gives all relevant departments insight into the minutiae of support processes.
Keeping in mind that 33% of Americans think about changing their provider for something after only one poor customer service experience, employing this type of CRM can be crucial for companies that are still in the process of establishing a loyal base.
Campaign Management CRM
One of the five important types of CRM, useful for strategies of all kinds and yet often overlooked, is a campaign management CRM. It mixes the functionalities of operational and analytical systems in the service of sales or marketing campaigns. Running campaigns wouldn’t be possible without gathering, organizing, and analyzing data to distribute the content to the right people, and these CRMs make that process much more streamlined.
Strategic CRM
By constantly learning about its customers and adjusting to meet their needs, businesses can boost their profits and establish themselves in a given market. To that end, the main goal of strategic CRM software is to use data for forming and implementing business strategies to foster long-term customer relationships. Instead of predicting customer needs, this type of CRM lets the customer inform the business strategy.
Bottom Line
Different types of CRM systems help businesses speed up operations, handle extensive data, share it among departments, and create and execute business strategies. They all serve the same purpose - helping your business grow and minimizing manual labor - but have different approaches to achieving that. In the ever-lasting competition between companies to win clients, choosing the right CRM software can be a game-changer.
By Danica Djokic ·
March 01,2022
Both the enterprise resource planning system and customer relationship management software are valuable business solutions that help increase profitability and productivity. And although these are complementary technologies, they have different core functionalities.
As part of our ERP vs. CRM showdown, we’ll tell you more about what those differences are. We’ll also delve deeper into some of their key characteristics, enabling you to decide which of these systems your business needs.
What is ERP?
ERP is a process that companies use to integrate and manage the most important parts of their daily business activities. As such, ERP software solutions are highly useful when it comes to the implementation of resource planning.
ERP serves as a shared database that employees with relevant job functions can access and use to complete their daily tasks. Nowadays, it’s used for everything from risk management and compliance to procurement and accounting.
Perhaps the most accurate ERP definition would be to describe the system as the glue that holds together all the financial and operational data. This is also one of the main benefits of using the system, as all of the data can be retrieved from a single source, making it easier to compile ad hoc and static monthly reports. Moreover, it gives employees access to financial insights, speeding up the decision-making process.
It’s worth noting that ERP grew from the material requirements planning system. This probably helped immensely when it came to creating ERP as a software that can also handle inventory management and provide help with production and distribution.
Another one of the more commonly cited examples of how ERP systems benefit businesses relates to the software’s role in closing the books. That’s because companies no longer have to waste time on data entry and consulting different departments. The ERP system automates many of those tasks, reducing monthly close times to just a few days.
It can also provide an additional level of security, as having role-based permission - one of the key features of every sound ERP system - reduces financial risk.
What is CRM?
This is another system designed to streamline business operations. But unlike ERP, this software manages how customers interact with your company. Of course, this CRM software definition is somewhat broad.
In peeling back the layers, you’ll quickly learn that CRM can assist your marketing, sales, and support teams in ensuring your clients are as happy with your services as they can be. Just like ERP, it provides businesses with a central database. This one is used for customer data, tracking all customer interactions while providing the aforementioned teams with the necessary information. The teams then use the analytics part of the software to identify important metrics within the CRM database, meaning the sales team gets the details it needs to improve sales and customer support services.
Initially, this software was developed exclusively for sales departments and was known as sales force automation or SFA. Over time, other systems were designed and integrated into the original software to create an all-in-one solution for growing your business.
Some CRM systems include sales performance management or sales incentive compensation. However, these add an additional level of complexity and are often sold separately.
Ultimately, the CRM system, by definition, is created to cover all areas of customer interaction, and CRM statistics show that it’s more than helpful to small businesses. Keeping customers happy with your services and products guarantees returning customers who are much more valuable to a business than new ones.
That’s not to say that CRM can’t help you find new clients - lead generation and identifying potential prospects is another feature of every CRM. From there, the system helps you lead the new customers through the sales process to close the deal - and then helps you bring back these customers for more.
What Does Your Business Need?
The objective of this CRM vs. ERP showdown isn’t to pick the better system. Identifying the key components of these business solutions is intended to help you decide what your company needs. In most cases, the answer is both.
The two typically go hand in hand and complement each other. In some instances, they even overlap - there are platforms that allow the easy integration of both systems.
Big corporations probably don’t think twice about using both. However, small and medium-sized businesses have to consider the cost. And this is where knowing the difference between ERP and CRM comes in handy.
CRM systems start at $12 per user/month but can go as high as $300 per user/month. Meanwhile, the average ERP project costs $7,200, and depending on the number of employees, the total cost can be anywhere between $150,000 and $750,000 for a mid-sized business.
So if your business is yet to scale to the point where you can afford these services without batting an eyelash, you might have to settle for either one or the other. A thorough ERP vs. CRM comparison will help you decide which one is more suitable for your business model.
If your business revolves around your customer base and its success depends heavily on obtaining new and maintaining old customers, then investing in CRM and delaying the implementation of ERP is probably the best course of action. For example, real estate brokerages would undoubtedly benefit from a real estate CRM instead of dishing out a ton of cash for an ERP system. In this situation, having CRM software that can handle customers and spare you the cost of employing a lead generation company could prove invaluable.
Of course, you might already be asking: what does ERP stand for? If that’s the case, your company probably has a small number of customers but a complex financial system. In these instances, integrating an ERP system is a better solution than relying on QuickBooks or other accounting software designed for small businesses.
But as your business grows, both systems will become equally valuable. Until then, choose the software that will elevate your business to the next level.
All in All
It’s no secret that every business benefits from having all the relevant data in one place that’s easily accessible to all those who need it. That’s why having this ERP vs CRM software debate is crucial in establishing whether the integration of one or both solutions is required to grow your business.
One can provide guidance for establishing relationships with customers, while the other helps you boost your finances and behind-the-scenes operations. While CRM manages interactions with your customers, you can rely on ERP to handle all your financial and operational data.
By Vladana Donevski ·
March 07,2022
Maintaining good customer relationships is the pillar of any successful business. Still, a few decades ago, the process of collecting, tracking, and managing client data within a company was fragmented and a lot more time-consuming. Companies would keep details about their customers in spreadsheets, Rolodexes, and filing cabinets.
These methods were imperfect in so many ways - they involved a lot of manual work and often prevented proper information distribution across different departments. Many business opportunities were missed prior to the introduction of CRM.
What is CRM software?
Short for customer relationship management, a CRM system is a piece of software businesses use to store information about their customers, manage interactions, and automate a number of processes related to a client’s life cycle through the company’s marketing and sales funnels. Given that it helps nurture customer loyalty, turning it into revenue, a reliable CRM system is a vital tool for almost any company, regardless of what products or services it offers.
Used by marketing teams, sales representatives, and call center agents to maintain contact with clients and quickly respond to their needs, a CRM platform enhances a company's interaction with clients.
What does a CRM Software Solution Do?
The purpose of any CRM program is to allow salespeople and marketers to establish, manage, and analyze relationships with a business’s existing and prospective customers. It simplifies the process of tracking interactions and collecting information. Thanks to these functionalities, marketers and sales representatives always know who these customers are and their history with the company when they get in touch with customers. Not only does this information help personalize the communication, but it also strengthens customer trust and increases the chances of conversion.
CRM services allow businesses to track interactions between the company and its actual and potential customers through a number of channels such as emails, phone calls, social media networks, contact forms, and search engines.
Another great thing about these software solutions is that they can automate repetitive tasks, set reminders, and display alerts if certain matters require immediate attention. Furthermore, some CRM solutions come with analytical capabilities which you can use to track and evaluate the efficiency of different functions or identify sales patterns. For example, let's say you run a real estate brokerage. You can use your real estate customer relationship management system to track and manage your leads and listings while getting valuable market insights.
CRM statistics indicate that 91% of US businesses with more than ten employees use some kind of client relationship management software. This piece of information is hardly surprising given how powerful CRM solutions can be. Combined with marketing automation, they provide sales and marketing teams with valuable tools for end-to-end management of sales and marketing funnels, from lead generation and qualification to forecasting and deal closure.
Features of CRM Programs
Here’s an overview of functionalities typically provided through a CRM platform:
Lead management: A CRM software as a service tracks the company’s lead generation efforts, allowing marketing team members to add new leads to the system, either manually or automatically, and to track and analyze data about them.
Workflow automation: CRM platforms help companies focus on more creative tasks with higher importance levels by optimizing repetitive processes and streamlining mundane workloads.
Marketing automation: Some client relationship management systems offer marketing automation functionalities for certain tedious tasks. For example, you can set up your CRM to automatically send customers marketing emails or publish social media posts at chosen times. The goal here is to make sure that sales leads are kept engaged so they can be converted to paying customers.
Sales automation: Similar to marketing automation features, most CRMs come with marketing automation capabilities. Business owners can use these to track client interactions and automate certain elements of the sales cycle that make it easier to follow leads and attract new customers.
Analytics: Most CRM business solutions also offer built-in analytics tools that provide insights and help increase customer satisfaction rates. Marketing teams can put this data to good use while creating targeted campaigns. To top it off, analytics features help track attribution and offer valuable information about the overall quality of the customer experience.
Personalized customer experiences: Another way to make the most of CRM data is to use it to create individualized and consistent experiences for your prospective customers across different marketing channels. Not only do personalized customer experiences help boost brand awareness, but they also increase conversions.
Artificial intelligence: Certain CRM solutions come with built-in AI capabilities that automatically recognize patterns, which lead to successful sales. Ultimately, AI can help any business build more accurate and efficient strategies for future marketing campaigns.
Benefits of CRM Software Solutions
There are multiple advantages of using CRM solutions, whether you run a small business or a large enterprise. The benefits of customer relationship programs are available to marketing teams, customer care specialists, and anyone in the company who comes in contact with clients.
Organization
Perhaps the most significant advantage of a CRM tool is the organizational capability that it provides. A contact management software helps centralize your client data so that anyone who’s part of your company can find all the information they need in one place. As you transition to a CRM system, you’ll be able to enter basic contact information such as your clients’ phone numbers and addresses. Once your software solution is up and running, you’ll be able to follow, track, and analyze everything from basic information to advanced data about each customer.
In addition to your organization, your clients also benefit from a solid information management system because gaining a better understanding of customers enables you to offer a better service.
Task Tracking
Another reason why businesses of almost all types and sizes need CRM systems is the program’s ability to integrate with your company’s workflow. This saves lots of time you’d otherwise spend on daily tasks. Automation can significantly increase the overall customer engagement level as it provides consistency. In fact, consistency is one of the underdog benefits of a CRM tool - when clients (or prospective clients) get mixed messages, they can grow confused instead of excited about your offerings.
Additional Sales Opportunities
Why should you stop at 100 or 1,000 customers? Although business owners rarely have a finite number of customers as their goal, many companies often struggle to come up with good ways to generate leads and grow their customer base. A CRM program can help you with that. These software solutions track purchasing patterns and can provide valuable insight into market trends. By learning more about the people who are already your customers, you’ll have enough information to create micro-targeted strategies and encourage more conversions at specific times.
Sales Management
By now, you’re probably aware that a customer tracking software solution can make the task of managing your client base a lot less complicated. But did you know that a good CRM program can also track sales progress across your whole organization? Once again, these advantages of CRM solutions are available for companies of all sizes and structure types.
If you run a one-person shop, you’ll get the assistance you need for lead tracking and follow-ups. If your company has a large sales team, all representatives will be assigned new sets of leads, and their journey will be tracked starting from that point. That way, not only will you receive insights on how and when to act on sales trends, but you’ll also get an opportunity to track the progress and performance of your entire sales team.
Personalized Communication
Finding a way to use your sales resources more efficiently with the help of CRM applications is an excellent way to make your business more successful. However, this isn’t where your efforts should stop. CRM tools also provide personalization features such as the ability to nurture campaigns based on industry or to address customers by their first name. In other words, all the information stored in your database can be put to good use to build more profound client relationships through personalized communication.
Increased Retention
Another way a customer relationship management software solution can increase sales is by helping you identify your highest revenue-generating and most engaged clients. For example, you use your CRM to determine a subset of customers who open all of their emails or attend webinars.
A CRM can also improve retention rates among your existing customers. Thanks to the program’s ability to aggregate customer behavior, you’ll have a chance to spot different patterns, such as when a client is about to churn. Collecting data and gaining insights about client behavior can prove invaluable when it comes to creating a strategy on how to retain at-risk customers.
On-Premise vs. Cloud-Based CRM
Finally, let’s take a moment to discuss different types of CRM solutions. Depending on your organization’s objectives, you may find on-premise solutions more fitting or lean towards the advantages of cloud CRM deployment.
The most apparent difference between the two options is where the information is stored. With the on-premise solution, the software is located on your company’s servers, so this is a better choice for organizations with very strict security policies. The downside of an on-premise CRM is that the implementation can take a long time. There’s also the requirement to invest in suitable IT infrastructure. On the other hand, if you go for the cloud solution, your data will be kept on the software provider’s remote servers. Accessible via an internet browser of your choice, the service doesn’t require any type of software installation.
Additionally, if you decide to go with the in-house option, you’ll need to purchase a license beforehand and maintain the system on your own. Subscribing for a cloud-based solution, however, means choosing the pay-as-you-go approach and letting someone else take care of the CRM application’s flawless operation and data security.
Cloud CRM software solutions are much more popular these days than their on-premise counterparts. There are several reasons that can explain this trend - a cloud-based option is a good choice for business owners who want to have their data accessible at all times and value the ability to scale the service up and down with ease. Furthermore, choosing a cloud CRM is a no-brainer for smaller-sized companies as it allows them to be productive and enjoy all the benefits of CRM technology without the need to strain their budget.
By Milica Milenkovic ·
January 20,2022
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