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The value of CRM (customer relationship management) in marketing

crm system
Marketing

Written by Niek van Son MSc on January 22, 2025

Niek van Son

Last updated January 31, 2025

Introduction

When you start your own business, there are some important business software you will need to purchase. One of them is a good CRM (Customer Relationship Management) system. In this article, we will explain to you what it is, how it works, how you can use it and what opportunities it offers for your organization.

What is CRM? What does CRM mean?

CRM is an abbreviation for Customer Relationship Management. It means managing or managing the relationship with (potential) customers, but also with suppliers and colleagues, with service users and partners. You could also summarize the CRM meaning as the structural and systematic application of a strategy, in order to improve customer relationships and thus create value for both the company and the customer. In business, a CRM system is used to best manage these relationships.

What is a CRM system?

A CRM system is dedicated business software used, often in the cloud, by teams within a company to record and analyze contact moments between the company and its relationships. You will find all contact details, any social media profiles or the preferred method of communication for this customer. Data can be entered manually and enriched with, for example, information from databases such as the Chamber of Commerce, platforms such as LinkedIn, forms on the website and external systems such as email software. Because all this data is stored, you can always find everything quickly and, over time, you get a good picture of how a relationship is developing. Now when you as a business owner or employee need to contact one of your customers, you can easily pick up where you left off and refer back to previous events.

How does CRM fit into marketing?

A good CRM system provides sales opportunities. Within marketing, then, a CRM system has a lot of significance. After all, acquiring and retaining customers is necessary to grow as a company. Customer Relationship Management therefore belongs in your strategy for the future. How can you use CRM to improve your marketing?

  • Customer segmentation: targeted marketing campaigns to the right audience based on demographics, purchase history or interests, for example.
  • Personalization of marketing messages: customized to preferences and purchase history to motivate customers to take action.
  • Managing marketing campaigns: by monitoring and analyzing, you can better measure the performance of your marketing campaign and make adjustments as needed.
  • Improve customer service: improved communication based on all customer data improves customer loyalty and satisfaction.

CRM software adds value not only for your sales and marketing department, but for a lot of departments. Some examples:

  • Managers can use the information to analyze whether targets are being met and products or campaigns are achieving the desired results.
  • By plotting the customer journey, better forecasting can be done and better estimating what is the next thing to do.
  • Vendors finish their paperwork faster.
  • Salespeople have a source of information about opportunities and leads.
  • Customer service has a good overview of the communication that has taken place on all channels, including social media. This allows complaints, for example, to be tackled more quickly.
  • Scheduling follow-ups with suppliers and partners and documenting important information is easier.
  • The supply chain of suppliers can be optimized using the available information.
  • For HR staff, CRM software makes the hiring and onboarding process more efficient.

So all teams within your company, not just marketing, can find useful information in the CRM system. This also allows them to collaborate better and more easily. A good CRM system increases productivity, ROI and customer satisfaction.

Opportunities for cross- and upselling

It is cheaper to retain existing customers than to acquire new ones. Cross- and upselling may therefore be an important part of your marketing.

What is the cross-selling meaning?

In cross-selling, you make your customer an offer that matches his or her previous purchase. For example, if your customer bought a candle holder, you give some candles as a suggestion.

What is the upselling meaning?

In upselling, you give a more expensive and better suggestion than the product the customer is considering, and try to entice him to make this more expensive purchase. For example, if your customer is looking at a new TV, you might show a larger and newer model.

How can you use your CRM system to cross-sell and upsell?

Your CRM software gives you insight into your customers' purchasing behavior. You can view their purchase behavior and frequency, make predictions about future purchases, select matching products and segment customers for certain products or services. By closely monitoring the customer journey, you'll know when it's the right time to cross- or upsell or what's the best time to send an email, for example.

So CRM software is more than a digital card index. By building a good database in a CRM system, you can create the most effective (marketing) campaigns and increase the chances of conversions!

Niek van Son
THE AUTHOR

Niek van Son MSc

Marketing Management (MSc, University of Tilburg). 10+ years of experience as an online marketing consultant (SEO - SEA). Occasionally writes articles for Frankwatching, Marketingfacts and B2bmarketeers.nl.

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