4 Highly-effective Ways to Use CRM and Market Segmentation to Boost Brand Value
Strides taken by information technology (IT) over the past couple of decades have led to a significant spike in data that is created, stored, and processed by organizations. Due to this, segmentation has emerged as a powerful marketing tool that can help organizations boost sales and gain monetary benefits.
Even today, mass marketing is an important part of marketing strategies deployed by several companies. However, the one-size-fits-all approach can drain your resources in the long run as not everyone may have an interest in what you are selling.
Brands and businesses are slowly and steadily coming to terms with the benefits of combining customer relationship management software and market segmentation.
The CRM software market is the fastest-growing software market in the world and for a good reason. A market study published by Grand View Research states that the global CRM software market is expected to grow at a CAGR of around 14% from 2020 to 2027. [1]
This indicates that a number of companies are showing interest in customer relationship management tools and are ready to invest in one.
Businesses are increasingly turning to CRM platforms to segment their audience and offer them a personalized experience.
Table of Contents
- What is customer segmentation?
- Customer segmentation and CRM
- Boost Brand Value by Combining Customer Segmentation and CRM
- Customer Relationship Management Systems for Market Segmentation
- How to Find the Right CRM for Market Segmentation?
SEE ALSO: Top 10 features every CRM software should have in 2020
What is customer segmentation?
Customer segmentation refers to the bifurcation of customers into smaller groups depending on their behavioral characteristics and other parameters. This strategy helps brands create personalized and dynamic content and improve their marketing communication.
Customer segmentation and customer relationship management software (CRM)
A customer relationship management (CRM) software is equipped with vital customer information and preferences. These include demographics, buying behavior, purchasing habits, and more.
This information can be used to create market segments by leveraging the campaign management and segmentation features of a CRM.
After you create different audience groups, you can create and deliver customer-centric marketing content that will pull in high investments. Studies show that with CRM, companies can increase conversion rates by 300% and attain a 27% higher retention rate [2].
A CRM software simplifies this process to help you connect with customers who are receptive to your services and products.
Combining Customer Segmentation and CRM to Boost Brand Value
Next, you will learn how combining a CRM software and customer segmentation will benefit your business.
1. Analyzing customer trends and patterns
A customer relationship management software gathers huge volumes of customer data and stores it for ease of reference. While the tool is incredibly useful for customer service teams, CRM is also important for the marketing department as it collects vital customer data which can include, location, hobbies, interests, age group, and purchasing habits.
A CRM leverages the leaps taken by technology in recent years to evaluate trends and patterns in the data collected to facilitate seamless customer segmentation.
Segregating your customer base using manual techniques is not feasible in the modern business environment as it is ridden with errors.
2. Boost sales
According to Mckinsey & Company, sales teams that use the key features of CRM such as automation have the potential to uplift their sales by 10% [3].
On the whole, a CRM software can improve productivity by 34%, forecast accuracy by 42%, and increase overall sales by around 29% [4].
Consolidating your customer segmentation strategy with a CRM platform can help you achieve great results. You may ask Why? That is because you are connecting with the right customer with the right information at the right time and this is impossible to achieve with a one-size-fits-all marketing strategy.
In the current scenario, leading brands operating across different domains have turned to market segmentation to create tailored advertising campaigns. These companies use CRM software to filter humongous volumes of data which is collected.
3. Determine profitable customers
A customer relationship management system can do so much for you! It will enable you to build predictive models that highlight who your profitable customers are based on the lifetime value (CLV).
The customer lifetime value is a critical parameter that helps you understand how much you should spend on customer acquisition. It also plays an important role in segmenting customers on the basis of their value.
CRM market segmentation provides important information pertaining to which market segment has the highest CLV. With this data, you can deliver marketing material that connects with customers that fall into this bracket.
Customer relationship management systems will also help you churn out customers with a low CLV and assist you to find various ways to increase the same.
4. Increase engagement
Business owners are aware that customers that are engaged with their brand, product or services are the most profitable. Providing a seamless customer experience has rapidly become a priority for businesses in the current landscape.
Gone are the days when customers placed their loyalty on low-price tags and products. Today, customers rest their loyalty with companies and brands that deliver spotless experiences.
A recent survey indicated that as high as 86% of customers are willing to pay more in return for a seamless customer experience [5].
It is safe to say that current trends suggest that customer experience will soon overtake product and price as a key metric to differentiate brands.
Customer segmentation using CRM software will help your brand connect to customers at a deeper level.
Businesses can create and deliver marketing campaigns that will generate a higher rate of engagement.
Customer Relationship Management Systems for Market Segmentation
Now that you have a fair understanding of how CRM market segmentation works, let’s take a look at some of the CRM systems that are excellent at market segmentation.
- Keap
- Really Simple Systems CRM
- ActiveCampaign
- Sage CRM
- Zoho CRM
- HubSpot CRM
How to Find the Right CRM for Market Segmentation?
Almost all customer relationship management systems come with features that allow users to collect and save customer data. Furthermore, some of them also have email marketing and campaign management tools integrated within the platform.
If you are tied between choosing the right CRM for market segmentation, you can go through our detailed reviews to get some clarity.
You should consider investing in a CRM platform that offers more than the conventional features such as lead scoring, segmentation, email marketing, and sales.
It is hard to miss that audience or customer segmentation is integral to create a personalized experience. A CRM you pick should be able to help you build detailed profiles, deliver targeted messages to customers based on their preferences.
This will not only increase your engagement and sales, but also help you establish your business as a trustworthy brand.
SEE ALSO: Top 12 CRM Software of 2019
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Image 2 Source: Alpha Stock Images – http://alphastockimages.com/ License: Creative Commons 3
Sources:
[1] (2020) “Customer Relationship Management Market Size, Share & Trends Analysis Report By Solution, By Deployment, By Enterprise Size, By End Use, By Region, And Segment Forecasts, 2020 – 2027” Grand View Research [online] Available from: https://www.grandviewresearch.com/industry-analysis/customer-relationship-management-crm-market[accessed April 2021]
[2] (2019) “Customer Segmentation in CRM” Sage ERP [online] Available from: https://www.sagesoftware.co.in/blogs/customer-segmentation-in-crm/[accessed April 2021]
[3][4] (2021) Chang. J “57 Key CRM Software Statistics: 2021/2022 Market Share Analysis & Data” Finances Online [online] Available from: https://financesonline.com/crm-statistics-analysis-of-trends-data-and-market-share/#link25 [accessed 2021]
[5] (2021) Kulbyte. T “37 CUSTOMER EXPERIENCE STATISTICS YOU NEED TO KNOW FOR 2021” Super Office [online] Availabe from: https://www.superoffice.com/blog/customer-experience-statistics/
