CRM (customer relationship management)

Contributor(s): Wesley Chai; Tim Ehrens and Karolina Kiwak

Customer relationship management (CRM) is the combination of practices, strategies and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle. The goal is to improve customer service relationships and assist in customer retention and drive sales growth. CRM systems compile customer data across different channels, or points of contact, between the customer and the company, which could include the company's website, telephone, live chat, direct mail, marketing materials and social networks. CRM systems can also give customer-facing staff members detailed information on customers' personal information, purchase history, buying preferences and concerns.

Why CRM benefits businesses

The use of CRM systems can benefit organizations ranging from small businesses to large corporations, through:

  • Having customer information such as past purchases and interaction history easily accessible can help customer support representatives provide better and faster customer service.
  • Collection of and access to customer data can help businesses identify trends and insights about their customers through reporting and visualization features.
  • Automation of menial, but necessary, sales funnel and customer support tasks.

Components of CRM

At the most basic level, CRM software consolidates customer information and documents it into a single CRM database so business users can more easily access and manage it.

Over time, many additional functions have been added to CRM systems to make them more useful. Some of these functions include recording various customer interactions over email, phone, social media or other channels; depending on system capabilities, automating various workflow automation processes, such as tasks, calendars and alerts; and giving managers the ability to track performance and productivity based on information logged within the system.

  • Marketing automation. CRM tools with marketing automation capabilities can automate repetitive tasks to enhance marketing efforts at different points in the lifecycle for lead generation. For example, as sales prospects come into the system, it might automatically send email marketing content, with the goal of turning a sales lead into a full-fledged customer.
  • Sales force automation. Sales force automation tools track customer interactions and automate certain business functions of the sales cycle that are necessary to follow leads, obtain new customers and build customer loyalty.
  • Contact center automation. Designed to reduce tedious aspects of a contact center agent's job, contact center automation might include prerecorded audio that assists in customer problem-solving and information dissemination. Various software tools that integrate with the agent's desktop tools can handle customer requests in order to cut down on the length of calls and to simplify customer service processes. Automated contact center tools, such as chatbots, can improve customer user experiences.
  • Geolocation technology, or location-based services. Some CRM systems include technology that can create geographic marketing campaigns based on customers' physical locations, sometimes integrating with popular location-based GPS (global positioning system) apps. Geolocation technology can also be used as a networking or contact management tool in order to find sales prospects based on a location.
The benefits of CRM for social media
CRM tools specifically for social media platforms help companies foster customer relationships and monitor customer sentiments around their brands.
  • Workflow automation. CRM systems help businesses optimize processes by streamlining mundane workloads, enabling employees to focus on creative and more high-level tasks.
  • Lead management. Sales leads can be tracked through CRM, enabling sales teams to input, track and analyze data for leads in one place.
  • Human resource management (HRM). CRM systems help track employee information, such as contact information, performance reviews and benefits within a company. This enables the HR department to more effectively manage the internal workforce.
  • Analytics. Analytics in CRM help create better customer satisfaction rates by analyzing user data and helping create targeted marketing campaigns.
  • Artificial intelligence. AI technologies, such as Salesforce Einstein, have been built into CRM platforms to automate repetitive tasks, identify customer-buying patterns to predict future customer behaviors and more.
  • Project management. Some CRM systems include features to help users keep track of client project details such as objectives, strategic alignment, processes, risk management and progress.
  • Integration with other software. Many CRM systems can integrate with other software, such as call center and enterprise resource planning (ERP) systems.

Types of CRM technology

The four main vendors of CRM systems are Salesforce, Microsoft, SAP and Oracle. Other providers are popular among small to midsize businesses, but these four tend to be the choice for large corporations. The types of CRM technology offered are as follows:

Cloud-based CRM

With CRM that uses cloud computing, also known as SaaS (software as a service) or on-demand CRM, data is stored on an external, remote network that employees can access anytime, anywhere there is an internet connection, sometimes with a third-party service provider overseeing installation and maintenance. The cloud's quick, relatively easy deployment capabilities appeal to companies with limited technological expertise or resources.

Data security is a primary concern for companies using cloud-based systems, as the company doesn't physically control the storage and maintenance of its data. If the cloud provider goes out of business or is acquired by another company, an enterprise's data can be compromised or lost. Compatibility issues can also arise when data is initially migrated from a company's internal system to the cloud.

Companies might consider cloud CRM as a more cost-effective option. Vendors typically charge the user on a subscription basis and offer the option of monthly or yearly payments. However, cost may still be a concern, because paying subscription fees for software can be more costly over time than with on-premises models.

Popular cloud-based CRM providers include Salesforce, HubSpot and Zendesk.

On-premises CRM

This system puts the onus of administration, control, security and maintenance of the database and information on the company using the CRM software. With this approach, the company purchases licenses upfront, instead of buying yearly subscriptions from a cloud CRM provider. The software resides on the company's own servers and the user assumes the cost of any upgrades. It also usually requires a prolonged installation process to fully integrate a company's data. Companies with complex CRM needs might benefit from an on-premises deployment.

Many cloud-based providers, such as Salesforce and WorkWise, also offer on-premises versions of their CRM software.

CRM software evolution
CRM systems have moved far beyond traditional customer profiling functions.

Open source CRM

An open source CRM system makes source code available to the public, enabling companies to make alterations at no cost to the company employing the system. Open source CRM systems also enable the addition and customization of data links on social media channels, assisting companies looking to improve social CRM practices.

Open Source CRM platforms such as OroCRM, Bitrix24, SuiteCRM and SugarCRM offer alternatives to the proprietary platforms from Salesforce, Microsoft and other vendors.

Adoption of any of these CRM deployment methods depends on a company's business needs, resources and goals, as each has different costs associated with it.

CRM examples in practice

Examples of CRM usage vary by the type and purpose of the specific CRM system.

Contact center

Traditionally, data intake practices for CRM systems have been the responsibility of sales and marketing departments, as well as contact center agents. Sales and marketing teams procure leads and update the system with information throughout the customer lifecycle, and contact centers gather data and revise customer history records through service calls and technical support interactions.

Social CRM

Social media in CRM involves businesses engaging with customers directly through social media platforms, such as Facebook, Twitter and LinkedIn. Social media presents an open forum for customers to share experiences with a brand, whether they are airing grievances or promoting products.

To add value to customer interactions on social media, businesses use various social CRM tools that monitor social media conversations -- from specific mentions of a brand to the frequency of keywords used -- to determine their target audience and which platforms they use. Other tools are designed to analyze social media feedback and address customer queries and issues.

Companies are interested in capturing customer sentiments, such as the likelihood they will recommend products and their overall customer satisfaction, to develop marketing and service strategies. Companies try to integrate social CRM data with other customer data obtained from sales or marketing departments to get a single view of the customer.

Another way in which social CRM adds value for companies and customers is through customer communities, where customers post reviews of products and can engage with other customers to troubleshoot issues or research products in real time. Customer communities can provide low-level customer service for certain kinds of problems and reduce the number of contact center calls. Customer communities can also provide new product ideas or feedback that companies can use in lieu of feedback groups.

Mobile CRM

CRM applications built for smartphones and tablets have become a must-have for sales representatives and marketing professionals who want to access customer information and perform tasks when they are not physically in their offices. Mobile CRM apps take advantage of features that are unique to mobile devices, such as GPS and voice recognition capabilities, to give sales and marketing employees access to customer information from anywhere.

Business-to-business (B2B) practices

A CRM system in a B2B environment helps monitor sales as they move through the sales funnel, enabling a business to address any issues that might come up during the process. CRM systems in the B2B market help create more visibility into leads and, therefore, increase efficiency throughout the sales process.

CRM challenges

For all of the advancements in CRM technology, without the proper management, a CRM system can become little more than a glorified database in which customer information is stored. Data sets need to be connected, distributed and organized so that users can easily access the information they need.

Companies may struggle to achieve a single view of the customer if their data sets are not connected and organized in a single dashboard or interface. Challenges also arise when systems contain duplicate customer data or outdated information. These problems can lead to a decline in customer experience due to long wait times during phone calls, improper handling of technical support cases and other issues.

CRM systems work best when companies spend time cleaning up their existing customer data to eliminate duplicate and incomplete records before they supplement CRM data with external sources of information.

This was last updated in September 2020

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Give a clear concept and accelerated me know more about CRM and its benefits to the enterprises as learning is continuous process !!!
Can you give me , how the customer interaction management,helpful for customer acquisition.?
Thanks for the detailed definition
What are the three most important things to consider when choosing a CRM system for your company?
Cost, ease-of-use (training needed), and functionality across departments. Not necessarily in that order. 
2.Ease to Use 
Above are the major factors which should be consider while selecting right CRM service.
Borrowing from the notorious triple constraint of project management, pick two according to the company: cost to implement, quality of features, and time to train. As a third item: The ability of the vendor to respond to changes in the industry and offer new functionality in the future.
my 3 items:
1. a CRM solution that delivers on my top 3 needs
2. a CRM solution provider that focuses on user adoption rate
3. a CRM solution provider with a clear roadmap
- Features. Too many people invest in a CRM before they know what features they want and will need. This is critical. 
- Cost vs. Value - does the CRM cost a bit more but have everything you need including email marketing, lead scoring, marketing automation? If you save on a cheap crm, but then have to invest in a marketing automation platform, well now you are paying for TWO systems AND you have to figure out how to integrate them so no data is lost. 
- Level of support and on boarding. Make sure there is free support and that they have an on boarding process. Regardless of how 'easy' a CRM seems to be, you will need help getting setup. That is just the nature of CRM as a technology and a foundation for your business. 
Ability to perform a variety of integration and cloud.
That's why still waiting of some new CRM.
Company budget, Software scalability & technical support and vendor’s future plan.
Visibility, budget and specifics.
I feel like much of this misses the main point.
What do you want your sales org to do?
Sell the most the possibly can, right? 
All of the rest of the criteria I have seen is a factor that will help increase revenue. But bottom line, you want a system that will help increase revenue.

So the answer should be, the almost exclusively important thing to consider when buying a CRM is THE ONE THAT WILL ENABLE MY REPS TO SELL THE MOST.
Everything else is tablestakes.
- Cost
- Efficiency
- Ease of use
I have a company to run by name of STARiHOTELS.COM
Which CRM i need to use pls suggest.
Try using Salesforce.
  1. Price 
  2. Objective
  3. Delivery 

1.If customization can be done or not. i.e. it fits to your demand or not. 2. The price, if its affordable for you or not. 3. The features and its USP, How it is better from the other.
- Intelligence in the system that helps REPs to pitch more to the customer
- User friendly GUI
- Insightful analytics
The best cloud-based CRM software should be designed to compile information on customers across different channels - or points of contact between the customer and the company which could include the company's website, telephone, live chat, direct mail, marketing materials and social media
1. Know the objective of your business (objective)
2. Know how to benchmark what you need the CRM- (Value)
3. Cost and efficiency 
Good article, informative !
Hi, I just want to ask, is ebay an example of a CRM? thank you.

Thank you for this detailed article! I believe everyone should consider the price factor before investing, because there are similar systems online but with different price range. This will force you to think about the strategy and goal that you want to pursue with the tool. Efficiency is the key to buying a crm because you are investing not in a tool itself but into a better version of your business. This has to be done well.
Hello, this is my first time hearing about this software, so may I have your help: as we are an agent, we need a software for saving our customers data, and being informed if our customer want to cheat us buying directly from the main company. I want to know if CRM softwares can help us regarding this issue?
thank in advance
Well said, Cloud based CRM's are on demand as they are fast, reliable and easy deployment. The main vendors like Salesforce, Microsoft are designed focusing on adoptability to support multiplatform business, meanwhile there are other Cloud CRM products with similar robustic features but focusing on targeted business platforms, like Customer Value maximization(CVM) product specialized in Financial business which makes them to stand ahead of major vendors in their arena.
Now with the help of Salesforce Einstein, once can get even better results. CRM is touching AI to bring more intelligence in business.
I have to say a former Senior System Analyst for the old "Original NCR" till just after it was taken by AT&T. I was like a sponge, being a self taught programmer (COBOL) and then designer and implementation of an inventory control system I developed to save myself work as a shipping clerk. I have stayed pretty much out of "the new era" technology. Mainly because I had no idea what the hell anyone was talking about. Seems the further we educate and forge ahead in knowledge, we seem to loose the basic concept of "Information Technology" and wrap it up with synonyms, catch phrases etc. That unless someone really wants you to know - your stuffed! I was married to a "Senior Project Manager" who had a son that found his feet at 29 and started working with CRM and start-ups. They would talk and chuckle about this feature and that poor fool trying to keep up. So having moved from one "service industry" to another as her over achieving son put it. (Did not have gainful employment till 29) He had no reason to respect or be able to learn something from me.
Now, probably in the same time it takes someone to read this, Margaret Rouse you have taught and changed my perception incredibly. I see immediately the exponential growth that can be obtained from a business switched on enough to go with the flow of information. When I left NCR Australia and further my career as a professional superbike racer and a Kawasaki dealer I tried to acquire this sort of gathering and collation of data, I am sure that given the opportunity once again with this CRM and related products ALL motor dealerships could leap ahead not just the poor second cousins in the motorcycle franchises. 
You have another avid follower and fan to add to kudos. I'm impressed.
Stu Hablethwaite
Team Manager AT1 Racing
(Formerly Australian Superbike #63)
Now presenter of character & career highlights - (grey hairs)
If you were advising an organization on Customer Relationships, what advise would you give them regarding CRM? What would you like to see in a CRM? How has CRM progressed over the years?
Thanks for the question! Check out this piece on how CRM is progressing and the direction we think CRM is going to go in 2018:

How do I choose a CRM system for a click and collect option?
Nice article on CRM software. It’s really a great way to optimize company work, performs tasks automatically and best helps you connect better with their customers.

Why is CRM vital to your business?

A CRM application brings all this information into one cohesive unit. The customer’s complete history together with your business exists adjacent to a list of your deals; your emails, notes, and appointments board within one interface. In fact the on-time notifications the minute your customer performs a task of appropriate value to the business – like when they click on your email with the hyper link highlighting the price tags. Here we are talking about the goldmine of data points of your end customer available under one roof and one system.

CRM as a powerful tool is the one-stop answer for your sales group. It will be the distinction between winning a deal and losing it. It may also be your entrance to spike in the sales productivity, hot prospects and better coordination between different groups. However at its core, a CRM application helps you build long lasting relationships together with your customers.

great article, in our small company we use CRM from FirmaO, you can try it out for free
CRM is a very effective tool for business owners to be able to track and manage their entire business successfully. It's a solution to help businesses focus on their customer relationship while being able to offer a better experience for their customers. CRM tools let you do tasks like:
  • store customer and prospect contact information
  • identify sales opportunities
  • record service issues
  • manage marketing campaigns

CRM helps organizations be more effective and efficient in their day-to-day tasks and assists them in reaching long-term business objectives and goals
Nowadays Increasing sales for every organization and sales agent is a very typical task. Because lots of competitors are there but now the Sales CRM Software is the essential tool to manage all tasks and reminders to follow and generate sales and leads by them easily. Here is such a nice explanation about why CRM is important please read this article it's very helpful to understand. Thanks to author for sharing such nice info. keep posting....! 
how can the CRM add value for customer service team 
It’s no secret that a positive customer experience nets a satisfied customer whilea negative customer experience breeds dissatisfaction and often affects retention rates. The struggle to perfect the customer experience is draining—not only to the consumer but also to a company’s bottom line.To measure and manage this all PRC recommends Customer Satisfaction Survey.
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