The Necessity of CRM (Customer Relationship Management) in Marketing: Key Points for Product Comparison and Selection

What Is CRM?

CRM stands for "Customer Relationship Management" and refers to IT tools used for managing customer data. CRM is utilized to centrally manage customer information and nurture relationships with leads and existing customers. As a result, users can benefit from streamlined customer management, improved customer satisfaction, and enhanced accessibility to data.

The Importance of CRM and the Background of Its Growing Attention

Why is CRM important for businesses? Below, we explain the importance of CRM and the background behind why it is currently receiving so much attention.

Responding to Diversified Consumer Needs

As a result of the widespread adoption of the internet and social media, which has made information easily accessible, the needs and values of modern consumers have become increasingly diverse. In such an environment, providing highly satisfying services to each individual customer requires a detailed understanding of their specific needs and the execution of personalized strategies.

This is where CRM, which allows for the centralized management of customer information, is becoming increasingly important. CRM can store a vast amount of insights useful for understanding customer needs—such as age, gender, purchase history, and inquiry history—thereby helping businesses respond to diversified consumer needs.

Improving LTV and Retaining Existing Customers

In today's market, which is saturated with similar products and services, it has become difficult to differentiate from competitors based solely on quality or price. Consequently, the cost of acquiring new customers is on an upward trend. In such a situation, shifting the focus from new customer acquisition to retaining existing customers and increasing the Lifetime Value (LTV) of each individual customer is becoming a viable and effective strategy. The rise of subscription-based services is also a factor accelerating this trend.

To retain existing customers, it is necessary to improve customer satisfaction and loyalty. As discussed later, CRM is equipped with various functions useful for maintaining relationships with existing customers, such as customer data management, customer analysis, marketing support, and customer service support, making it a highly sought-after solution that meets modern business needs.

Main Functions of CRM

CRM is characterized not only by its ability to simply store customer information but also by its wide variety of functions designed to effectively utilize that data. Below, we introduce the main functions of CRM.

Customer Management

Customer management is the core function of CRM. CRM allows you to manage all customer relationship information, including basic data such as customer name (company name), age, gender, and address, as well as transaction history, customer support inquiry history, and sales meeting schedules. Because the data stored in CRM can be shared in real-time not only with the sales team but also with other departments, the entire company can leverage customer information for business purposes. For example, by using CRM to segment customers, you can provide better services to them more efficiently.

Marketing Support

CRM is equipped with functions for multifaceted analysis and reporting based on the customer information stored within it. By using these functions to visualize metrics such as profitability, customer retention rates, and the effectiveness of marketing campaigns, it becomes easier to devise effective approaches when formulating marketing strategies. CRM serves as the foundation for implementing data-driven marketing.

Promotion Management

Some CRM products allow for promotion management, such as the automated distribution of emails and coupons based on each customer's attributes. Through such workflow automation, sales representatives can save time, avoid duplicate tasks, and complete appropriate actions at each stage of the sales process. Since you can also track how many of the distributed items were opened by customers, this leads to the improvement of marketing campaigns.

Customer Support

CRM is also equipped with functions useful for customer support. Specifically, it can manage inquiries from customers and the history of responses to them. By centrally managing inquiries from multiple channels such as web forms, email, and telephone, you can expect to reduce response times and prevent duplicate responses. Additionally, CRM allows for the creation of help pages, inquiry forms, and satisfaction surveys. By utilizing these CRM functions, it becomes easier to provide personalized customer support for each customer, which is expected to lead to improved customer satisfaction.

Benefits of Using CRM

What benefits can companies receive by utilizing the various functions of CRM? Below, we introduce the advantages of using CRM.

Improving Operational Efficiency

The first benefit of CRM is the improvement of operational efficiency. By using CRM, you can centrally manage all customer data across all channels. This makes the management of and access to customer data more efficient, making it easier to check necessary data when needed. In particular, as many cloud-based CRMs are now mobile-compatible, the ability to check customer information at any time while on the go using devices like smartphones is a significant advantage.

Furthermore, by analyzing customers based on CRM data, you can identify customers with high profit margins or high conversion potential. Using the previously mentioned promotion management functions allows for the automation of tasks like email distribution, which can significantly improve sales efficiency.

Leading to Improved Customer Satisfaction

The second benefit of CRM is the improvement of customer satisfaction. By introducing CRM and accumulating customer information within it, you can build comprehensive customer profiles, allowing for a deeper understanding of each customer's needs and values.

This enables timely and optimal proposals for each individual customer, which in turn leads to improvements in customer satisfaction and LTV. Being able to provide optimal proposals to each customer also leads to a reduction in sales and marketing costs.

Facilitating the Sharing of Customer Information

The third benefit of CRM is that it makes sharing customer information easier. Personal information and correspondence history tend to be held by individual representatives, but such situations lead to the siloing of business knowledge and make appropriate management difficult. Additionally, if departments use separate databases, misunderstandings are more likely to occur in inter-departmental communication, making it difficult for the organization to act consistently.

In this regard, by introducing CRM and consolidating customer information there, you can integrate customer information company-wide, allowing anyone to access necessary information in real-time. This makes it easier, for example, for managers to check the progress of each sales representative's negotiations and provide follow-up as needed, or to collaborate with marketing and customer support departments to provide higher-quality services.

Disadvantages of Using CRM

While there are benefits such as those mentioned above, there are several points to be aware of when introducing CRM. Below, we introduce the disadvantages of using CRM.

Requiring a Mid- to Long-Term Perspective

The first disadvantage of CRM is that immediate results are difficult to expect. CRM is not a solution that will instantly transform operations or increase sales upon introduction. Due to the nature of CRM, companies that lack sufficient customer data will find it difficult to realize the effects of the introduction immediately. In this case, you must first start by enriching the customer data to be entered into the CRM.

Furthermore, even if customer data is sufficient, it still takes a reasonable amount of time to go through the process of analyzing that data, reflecting it in sales and marketing strategies, and having customers become satisfied with those strategies to increase their LTV. Therefore, companies introducing CRM are required to have a mid- to long-term perspective.

Requiring Initial Costs for Implementation

The second disadvantage of CRM is the need for initial costs. Although it varies depending on the product, introducing CRM incurs significant economic costs, such as initial fees and license fees.

Additionally, if you have previously managed customer information using spreadsheets or separate databases, work will be required to integrate that information into the CRM. There is no point in introducing a tool if you cannot use it effectively, so it is important to establish a system that allows for the effective utilization of CRM, including employee training.

Differences Between CRM and SFA

There is a solution called "SFA" that is highly relevant to CRM. SFA stands for "Sales Force Automation," and its role is to support the efficiency and automation of sales activities. Both CRM and SFA share the broad goal of streamlining sales activities. So, where do the differences between the two lie?

Simply put, the main difference between CRM and SFA is that while SFA is a tool for acquiring customers, CRM is a tool for maintaining and managing good relationships with customers after they have been acquired. SFA provides functions to support daily operations, such as managing the progress of negotiations, reporting on contract cases, checking the quota achievement rates of individuals or the entire department, and creating daily sales reports and estimates. In contrast, the main function of CRM is to collect and centrally manage data regarding customers for the purpose of utilizing it for future relationship maintenance.

It is important to understand that rather than one being superior to the other, CRM and SFA are in a relationship where they can complement each other by working in tandem. In fact, some CRM products are integrated solutions that also include SFA functions.

Differences Between CRM and MA

Let's also confirm the differences between CRM and MA. MA stands for "Marketing Automation," and it is a tool that can be used to cultivate new customers and automate communication with them.

The difference between CRM and MA is that while MA is a solution for discovering and approaching prospective customers and nurturing leads, CRM is responsible for maintaining relationships after they have become customers. In that sense, the difference between CRM and MA is analogous to the difference between CRM and SFA. That said, the role played by MA is positioned as a stage even earlier than that of SFA. Another difference is that while CRM and SFA are intended to be used primarily by the sales department, MA is a solution intended to be used by the marketing department.

MA, CRM, and SFA are also in a complementary relationship. By linking MA, CRM, and SFA, you can build a system where the marketing and sales departments can collaborate more effectively—for example, by handing over leads nurtured by MA to SFA to help close deals, and then covering the subsequent relationship maintenance with CRM.

Points for Selecting a CRM

Since there are actually many products available, even if we just call them CRM, many people may be worried about choosing the right one. Therefore, finally, we will introduce points for selecting a CRM suitable for your company.

Usability

First, thoroughly consider the functions your company requires from a CRM. If requirements are not met, inconveniences will arise; conversely, if you introduce a product with excessive functions beyond your requirements, it will be easy to incur waste in terms of cost. Prioritizing "must-have functions" versus "nice-to-have functions" is a tip for clarifying functional requirements.

Also, no matter how feature-rich a product is, if the personnel on the front lines who actually use the product cannot master it, high implementation effects cannot be expected. There are cases where, as a result of introducing a product with poor operability, it fails to permeate the front lines and ends up being a waste of money. Therefore, when choosing a product, it is important to select one that is easy to use, taking into account the IT skills of the personnel on the front lines. If a product has a free trial version, it is a good idea to try that first.

Integration Tools

Integration with other tools is also a point that should be checked. Because customer information is useful for various purposes, CRM is often used in conjunction with other tools. For example, the SFA and MA mentioned above are examples of this.

Therefore, when introducing a CRM, it is important to understand how well-equipped it is with integration functions for external tools. For the time being, we recommend selecting a CRM by prioritizing its integration with existing tools that your company is already utilizing or tools that you plan to introduce in the future.

Support System

The quality of the support system is also an important point. Especially for companies that are unfamiliar with the introduction and operation of CRM, this is a point that should be checked with priority.

For example, check the quality of support by researching reviews regarding the business hours of the help desk, communication methods with the vendor, and the speed of troubleshooting. In the case of products from overseas companies, it is also necessary to be careful about whether support and manuals are available in English.

Security Level

The security level of the product is also a point that should not be forgotten. Because personal information of customers is accumulated in CRM, the robustness of security is extremely important. If customer personal information were to be leaked illegally, the company's social credibility would be greatly diminished, and there is a risk that it would have a negative impact on sales.

However, in order to make information security robust, it is important not only to have tool functions but also to thoroughly improve the security awareness of employees. This is especially necessary now that many companies are adopting remote work and the opportunities to use systems and data outside the office are increasing. If you have concerns about such points, consider implementing compliance training in conjunction with the introduction of the tool.

Summary

CRM is an IT tool designed to centrally manage all information regarding customers and to build and maintain good relationships between a company and its customers. By utilizing CRM, companies can deepen their understanding of each individual customer, making it easier to provide products and services with high customer satisfaction and to deploy cost-effective marketing.

Furthermore, now that consumer values are diversifying, the introduction and utilization of CRM are increasing in importance to efficiently cultivate new customers while continuously retaining existing ones. Therefore, to further advance and streamline each sales and marketing process, it is effective to use the customer data integration solution "uSonar," which utilizes one of Japan's largest corporate databases.

By leveraging uSonar, you can seamlessly manage data, perform analysis, and execute strategies—from initial prospect outreach to existing customer follow-up—through integration with your CRM. By keeping customer information accurate and up-to-date at all times, you can achieve higher-precision targeting strategies and long-term customer development, ultimately driving overall business growth.