What is CRM? Thorough explanation of basic functions, advantages of introduction, and differences from SFA

By adopting this CRM concept, you can put your business at the center of your customer.
And you can aim to be a company that continues to be chosen by customers and prospects.

In this article, HubSpot, our company that provides CRM tools that have been introduced to more than 120,000 companies worldwide, will explain the basic functions of CRM, the differences from SFA, the advantages of introduction, and tips for successful introduction.

Not only for those who want to know what CRM is first, or for those who want to consider introducing a CRM tool, but also for those who have already introduced CRM and are looking for hints on how to use it further. Please try to reference.

Table of contents

1. What is CRM?
   1. CRM = Customer Relationship Management
   2. Turning customer information, which tends to be personal, into “information assets” shared throughout the company
   3. If you adopt the concept of CRM, “customers” will be born
2. Differences between CRM tools, SFA tools, and MA tools
3. Main features of the CRM tool
4. 5 benefits of using a CRM tool
5. Background of CRM concept
   1. An era in which companies that can engage with customers over the long term and face essential issues are chosen
   2. To prevent customer information held by sales from becoming a black box
6. Tools to drive CRM
7. Successful Cases of CRM Tool Implementation
8. Cases of failed implementation of CRM tools
9. 13 checklists to check before introducing a CRM tool

1-1. CRM = Customer Relationship Management

Let’s define the term CRM again.

As I mentioned at the beginning, CRM is an acronym for “Customer Relationship Management” and is translated as “customer relationship management” in Japanese. In other words, it is a word that expresses the concept of “aggregating and managing information on customer interactions.”

For example, let’s say you inherited an old “customer” from a former sales rep. At that time, the ease of communication changes greatly depending on whether there is information about the customer.

If the previous person in charge left information about the repeated interactions with the customer, you may be able to communicate using that information as a reference.

If you know what the other party’s values ​​are and what they like about your company’s products, you will be able to communicate with them in the same way as before.

But if you don’t keep that information, you may end up fumbling for communication with your customers.
Also, depending on your careless actions, long-standing relationships may end there.

This story is not limited to customers.
Even if you have a prospect that might lead to an order, if you don’t share communication with the prospect across the company, you may accidentally make multiple sales calls.

As a result, it gives a bad impression to the other party, and not only does it lead to lost orders, but it may also have a negative impact on word of mouth, saying, “The sales person over there doesn’t care about customers.”

In order to prevent such a situation, information related to communication with customers should be centrally managed company-wide. Thus the concept of CRM was born.

Keeping track of your customer interactions allows you to best serve each customer. The result is a better impression on customers and prospects and a long-term relationship.

“Creating and nurturing good relationships with customers and prospective customers” is the purpose of using CRM.

1-2. Turning customer information, which tends to be personal, into “information assets” shared throughout the company

If all members who communicate with customers gather records of their interactions in the same place, the information becomes an “information asset” of the company.
With this information asset, it is possible to realize a company-wide response tailored to each individual customer, and to achieve communication that leaves a good impression on the customer.

Let’s take a look at a real-life example from a business site.

This case study is a real-life incident between our HubSpot sales reps and our customers.

In general, details of lost deals are rarely shared internally.
Prior to that, sales representatives often manage the information of the customers they have dealt with in a state that only they can confirm.

If that happens, projects that may have led to contracts in the future become black boxes.

That’s why it’s important to adopt the concept of CRM, collect customer information that tends to be personal, and visualize it as a company’s “information asset. “

1-3. If you adopt the concept of CRM, “customers” will be born

If you adopt the concept of CRM, you will be constantly updating one customer’s information.

What was the customer interested in?
Conversely, what were you not interested in?

By continuing to update that information, it is possible to make proposals and communicate that are optimized for customers. If you continue to take the best care of each and every customer, your customers will trust your company and become so-called “customers.”

A loyal customer is a loyal customer .
These loyal customers tend not only to actively introduce the products of the companies and brands they support, but also to actively recommend those brands and products to those around them.
With more customers, your business will grow at an accelerated pace.

Here, let’s check the difference between “SFA tool (common name: SFA)” and “MA tool (common name: MA)”, which are often introduced together with CRM tools.

In particular, “SFA tools” have many similarities with CRM tools, so it is difficult to draw a clear line, but their roles are clearly different.

● SFA (Sales Force Automation): A tool to support sales representatives

The SFA (sales support system) is a sales representative that is equipped with functions such as managing customer information, visualizing the status of business negotiations, managing the progress of sales with dashboards and daily reports, issuing invoices (or linking with invoice tools). It is a tool intended to support the work of users.
Both CRM and SFA have in common that they can manage customer data, but while CRM is supposed to be used by any department, SFA is mainly used by the sales department. (Of course, there are cases where SFA is introduced in the marketing department and other departments, but basically it is mostly used in the sales department.)

●MA (Marketing Automation): A tool for automating marketing-related work

MA refers to the mechanism and concept of automating measures related to a series of marketing activities from cultivating prospective customers to business negotiations, and the system for executing it is called an MA tool.

Using MA tools makes it easier to implement individually optimized measures according to the situation of prospective customers. Information that customers want, such as automating the sending of step emails for those who have just registered as members and information providing emails for dormant customers, and issuing offers limited to those who have viewed the price page of their site. We can provide it according to your desired timing. In this way, in order to automate individually optimized marketing measures using MA tools, it is necessary to manage customer information with CRM, so it can be said that the two are inseparable.

The diagram below shows the differences in the roles of CRM, MA, and SFA that we consider.

As shown in the above diagram, CRM is used to manage customer information across departments, and based on CRM information, tools specialized for each department, such as MA for the marketing department and SFA for the sales department We believe that the ideal situation is to introduce

Let’s take a look at what features CRM tools typically have.

Function 1: Customer information management function

The basic function of CRM is the function to manage “customer information” of customers and prospective customers.
Using a CRM tool, as mentioned above, you can manage the “attributes” and “purchase history” information of prospects and customers in one place.

In addition, since the entered information is shared in real time on the CRM tool, teams and personnel can immediately catch up on changes in prospects and customers and respond according to the situation of prospects and customers.

Function 2: Customer Support Function (Customer Support Function)

In the CRM tool, you can record the customer’s “attribute” and “purchase history” information by linking the contents of the exchange with the customer by e-mail or telephone.
So, when a customer calls, anyone on your team can quickly understand who the customer is by accessing the customer’s personal information and interaction history.

Function 3: Marketing function (function for approaching customers)

Create a list of customers and prospective customers according to their purchase history and pre-purchase behavior, automatically send emails only to specific customers, and make phone calls after understanding the status of customers and prospective customers. You can approach

For example, when sending sales emails to all prospects, you may send unnecessary information that certain people already know.

To prevent this from happening, we send sales emails excluding prospective customers who meet certain conditions such as “already downloaded the material”, or conversely, send sales emails to prospective customers who have already downloaded the material and ask them to provide more specific information about the product. It is possible to send an email that describes how to use it.

Function 4: Sales support function

In order to build a good relationship with customers and prospects, it is also important to make sales proposals that match the other party.
As I will explain in detail later, there is a “sales support tool” called “SFA (Sales Force Automation)” that is similar to CRM.

This tool is equipped with functions that support sales activities, such as the ability to easily enter daily reports and share them within the team, as well as the ability to manage sales activity schedules and the tasks of personnel in charge. More and more modern CRM tools have the same kind of functionality.

As mentioned above, CRM tools have plenty of useful functions for advancing CRM.
Let’s take a closer look at the benefits of using a CRM tool.

There are five major advantages of using a CRM tool:

1. Efficient recording of customer and transaction information

If each person in charge manages customer information in separate locations and shares that information verbally, by email, or in Excel, information management leaks are likely to occur.

By using a CRM tool, you can manage customer information together with the contents of emails, phone calls, and notes left by yourself in one place.

In addition, by managing the customer information held by each person in charge in one place, it is possible to save the trouble of repeatedly entering the same information, and to immediately check items with missing entries.

2. Abundant features for communicating with customers

The CRM tool has a function that allows you to create forms flexibly, and you can create various forms such as “inquiry”, “document request”, and “event application”.

In addition, it is also possible to automatically classify customer information by inflow source, such as from which form the inquiry was made and from where it was accessed.

You can even limit your emails to prospects and customers who meet specific criteria.

3. Easy to collaborate with other departments

When collaborating with other departments, it is difficult to exchange information if the tools used are different.

If the same CRM tool is used company-wide, not only can all departments view the same information just by accessing the tool screen, but it is also easy to exchange information.

Four. Accessible from various environments

In the case of cloud-based CRM tools, there are many that consider access from smartphones as well as PCs.

For example, you can record highly accurate customer information by entering information while it is still fresh in your memory without returning to the office after completing sales activities outside the office.

Also, even if it becomes necessary to respond to customer inquiries while away from home, the customer information can be checked on the spot, enabling a quick and accurate response.

Five. no need to back up

In the case of cloud-based CRM tools, the entered information is saved on the Internet server, so there is no need to back it up.

2-1. An era in which companies that can engage with customers over the long term and face essential issues are chosen

Earlier, I talked about the importance of creating loyal customers, but it is not easy to create loyal customers.
Especially in today’s world, when the market is flooded with products and services and customers can gather information in a variety of ways, it is difficult to build a relationship with a customer that will repeat business with you, let alone a regular customer.

As customers have a wider range of choices these days, there is a situation in which even if there is a customer who has been doing business with us for some time, it is not necessarily the case that they will continue to do business with us.
In order to maintain business relationships with customers, your company must continue to be an entity that can essentially solve customer problems.

Find, understand, and solve not only the problems that are visible on the surface, but also the essential problems hidden behind them.
If you can’t do that, your customers won’t really trust your company.

Against this background, the time has come when we need to know our customers more deeply.
In other words, we are entering an era in which it is important to communicate with customers on a “line” rather than a “point” and stay close to them over the long term.

And in order to realize that communication, the concept of CRM that enhances the relationship value with customers is essential.

By the way, recently, we often see subscription-type products and services that are recurring billing instead of one-time sales, because more and more companies want to build long-term relationships with their customers and grow their business while staying close to them. It can be said that it is the body.

2-2. Prevent the black box of customer information owned by sales

The marketing department collects information on prospective customers (leads) through advertisements and exhibitions.
After that, the information was handed over to the sales person, but the sales person managed the information by himself, and in the end, he did not know how the transaction progressed.
In addition, sales reps may deliberately hide information about qualified prospects in an attempt to improve their own performance.

In fact, many companies find themselves in this situation.

In a company with a strong tendency to individualize, it is difficult to accumulate customer’s “information assets” that can be utilized across departments. Therefore, the importance of CRM that centrally manages customer information and allows it to be used company-wide is being emphasized.

Which tool you choose to drive your CRM is important.
In addition to CRM tools, if you just want to manage customer information, you can also use a spreadsheet application like Excel.

Here are some of the key tools available for managing customer information.

1. CRM dedicated tools

In conclusion, if you want to introduce CRM, CRM tools are the most recommended.
This is because CRM tools are exactly tools created for the smooth progress of CRM, and can smoothly centrally manage various information obtained in the process of communicating with customers.

In addition to managing the profile information of customers and prospective customers, you can also centrally manage information such as the progress of negotiations and what documents have been traded.

The following article compares and explains the functions of major CRM tools used in Japan.

2. Excel

The method is to use Excel to create a sheet for managing customer information, and to keep updating the sheet with everyone. In this case, you will need to share the updated Excel file somehow.

There are many cases of sharing using cloud storage such as Dropbox and OneDrive, but when co-editing a single Excel file, it becomes difficult to understand the history of who edited it and when.

Also, if you back up files every time to prevent overwriting of files, a large number of backup files will be created, and the backed up files can be easily copied, so the risk of leaking to the outside increases.

For example, if an employee tries to work from home and loses the USB memory where the data was copied, it will lead to the leakage of customer information, which is a big problem.
In the first place, Excel is a spreadsheet software and is not suitable for managing chronological information.

If you want to do a deep analysis, you need to be able to handle complex functions and pivot tables, and if you don’t have people who are familiar with Excel, customer analysis will be tough.
Also, if the person with detailed knowledge quits, there will be no one to touch the complicated Excel sheet.

3. Google Spreadsheet

Because it is a spreadsheet application that can be used in the cloud, it has strengths in online editing by multiple people.
However, customer management using Google Sheets is basically not recommended because it is assumed that the same problems as Excel will occur.

Four. Business card management tool

A convenient business card management tool that converts information written on business cards into text through OCR and creates a list. When collecting information on prospective customers, the business cards of the person in charge of the company obtained at exhibitions etc. will be very useful information.
Among the recent business card management tools, there are more and more that have functions similar to dedicated CRM tools.

The following two examples are examples of use cases where the merits and benefits of introducing a CRM tool are particularly easy to understand.

Case 1: Automating work and now able to measure marketing effectiveness in spare time

At “Posiwill Co., Ltd.”, which develops career support business, we exchanged emails with customers many times in order to decide the date and time of career interviews.
However, due to the increase in the number of inquiries, we felt that there was a limit to manually setting the interview date and time.

Also, when conducting email marketing, it took a long time to create a list of customers to whom the emails were sent, and the effectiveness of the marketing was not fully reviewed.

However, with the introduction of CRM, when setting up an interview, all you have to do is send the URL for the meeting, which shows the availability of the person in charge, to the interview applicant.

Also, regarding the creation of the customer list, the customer information was automatically compiled according to the customer inflow source and the list was created, saving the trouble of creating the list.

By automating the work, I was able to analyze customer information in my spare time and spend more time measuring the effectiveness of marketing.

Case 2: As a result of using the PDCA cycle for advertising operations, the number of monthly contracts increased tenfold

Kozo Keikaku Engineering Co., Ltd., whose main business is system development and consulting, began handling hardware products as its own products for the first time.

However, the new business had a different form of products than the existing consulting business and the price was low, so there were almost no customers among the past customers to whom the products were sold. Therefore, we introduced ” HubSpot CRM

” that can collectively manage the progress of business negotiations so that we can connect prospective customers that we have attracted ourselves to orders . With the introduction of the CRM tool, it is now possible to see the status of the deal along with the lead information in one place. In addition, the cost-effectiveness of web advertising can be checked at a glance, and it is now possible to immediately consider advertising management policies. As a result, we were able to promote sales efficiently, and within a year of using HubSpot, we were able to increase our monthly conversions (CV) by more than 10x.

By using CRM tools in this way, you can expect to improve the efficiency of your operations and grow your business.

You can read more about other success stories in the articles below.

Next, let’s touch on cases where CRM tool implementation fails.

Cases where introduction of CRM tools fails are as follows.

1. The culture of using CRM tools did not take root

Even if you introduce a CRM tool, if you do not share the purpose of using it within the company, it will be thought that you have just added more troublesome work, and the culture of CRM will not take root.

Let’s share in advance, “What kind of benefits will there be for your company and customers?”

2. Didn’t think about what customer information should be recorded

When recording customer information, information gathered without prior consideration of “what should be recorded,” “what benefits will it bring to the customer or prospective customer,” and “how can it be used to solve our own problems?” However, if information is simply collected, it will not be possible to use it effectively.

Pre-design is very important when using a CRM tool.

3 . There were no personnel who could operate CRM tools

If there is no member who is familiar with the operation of the CRM tool, or if there is no dedicated member who can investigate the tool and solve the problem when you have a problem using the tool, it will be difficult for the CRM tool to spread throughout the company.

Make sure you have someone who understands the benefits of the tool and makes it part of the culture in your company.

Four. I thought that if I introduced it, the results would improve in the short term.

CRM tools are basically tools for improving communication with customers over the medium to long term.
For this reason, results will permeate the company better if they are measured over the medium to long term.

Of course, even if you use it for a short period of time, you can get results, but you should know that using it for the purpose of producing results in a short period of time is not like a CRM tool.

Since it is a tool that is introduced with great pains, we want to prevent the above failures.
Therefore, I summarized the points that I would like to check before introducing a CRM tool in a checklist format.

When introducing a CRM tool, make sure that all of the following 13 items are shared within the company.

1. IS THE PURPOSE OF INTRODUCTION CLEAR?
	Is the problem you want to solve with CRM clear?	CRM tools are multi-functional, but if you don’t have a clear idea of ​​what your company wants to solve with CRM, you’ll end up with too much functionality. Clarify what problems your company will solve by introducing CRM.
	Have you established KPIs to clarify the effectiveness of your CRM?	Evaluate whether your company has benefited from implementing a CRM tool. Either “quantitative” or “qualitative” is fine, so set KPIs that are suitable for your company’s problems and properly evaluate whether they have been achieved.
	Are the definitions of important KPIs standardized within the company?	Let’s unify the definition of important KPIs so that there is no difference when and who enters into the CRM tool. For example, when counting “number of sales”, let’s decide, “face-to-face sales are counted, but email and phone sales are not counted.”
	Do you understand what CRM can do for you?	A CRM tool doesn’t just work. Understand the functions and characteristics of the tool and clarify what kind of problem it will help solve for your company.
	Do you understand what CRM can’t do?	There are some things a CRM tool can and cannot do. Make sure that the function you are looking for in the problem you are trying to solve is properly included.
	Do you understand that there are some features in CRM that you don’t need to use at your company?	As CRM tools are multifunctional, it is difficult to master all the functions. Prioritize the use of the most effective functions for your company, and understand that there are functions that do not need to be used forcibly depending on the operation staff and system.
2. Do you have information that you want to utilize with CRM?
	Do you have customer data to enter into your CRM?	If you already have customer data, organize it properly by item (name, company name, job title, phone number, etc.), organize it in CSV, etc., so that you can import it into your CRM tool immediately. .
	Have you decided how to collect customer data after implementing CRM?	A CRM tool is a tool that allows you to understand your customers and communicate in a way that benefits them by collecting customer data. Let’s design not only based on existing data, but also how to collect data for useful communication for customers afterwards.
	Are the customer benefits that can be obtained by operating CRM clear?	Clarify how your customers will benefit from using a CRM tool. Be careful not to reduce the customer experience value by turning customer data collection and approaches into objectives.
3. Is it possible to create a system that can be operated?
	Have you secured the personnel in charge until you can start using CRM?	A CRM tool doesn’t just work. We need people to design how to collect customer data, how to collaborate with the team, and how to use it.
	Have you secured personnel in charge of making improvements after starting CRM operations?	The introduction of CRM tools is not the end. It is necessary to constantly change operations according to changes in the market and customers. Make sure you have enough staff for that.
	Are you cooperating with departments that will change your business by introducing CRM?	The effectiveness of CRM tools can be maximized by centralizing data cross-sectionally across teams and companies, rather than being used only by specific departments. Before introducing the tool, let’s communicate the benefits and share the points of change in the work flow with the department where the work will change due to the introduction of the tool.
	Do you have good follow-up after introducing CRM?	It is difficult for the person in charge to completely grasp all the functions of the CRM tool, including the operation method. In such a case, let’s check if the company provides a CRM tool that has good post-implementation support.