Customer Relationship Management (CRM)

What is Customer Relationship Management (CRM)?

Customer relationship management (CRM) is a process for collecting, maintaining and updating information about customers and prospective customers. A CRM system is the software companies use to implement this process. 

What is a CRM system used for?

A CRM system is used to store, update and maintain information about customers. Some CRM data is entered automatically, such as when a customer submits a website form, while other data is entered manually, often by salespeople or customer support staff after a conversation with a customer. 

A CRM system is used to track and record all touchpoints along the customer journey, from pre-purchase, to purchase, to retention and advocacy. The system enables organizations to record customer interactions (e.g., phone calls, including dates, times and call transcripts), as well as customer purchase history (e.g., product numbers, purchase dates, purchase amounts). CRM systems help organizations provide better customer service and customer experience. When used effectively, CRM systems can help retain customers and grow revenue.

Who are the users of CRM systems?

A CRM system is a centralized database that everyone in the organization can access, but it is typically used primarily by customer service and sales. While the primary users of CRM systems are sales and marketing teams, many departments and groups now access and update the system. Salespeople use a CRM system to record information about the customers and accounts they manage, updating purchase details, customer contact information (e.g., phone number, email address), renewal dates and more. Sales managers use Salesforce to manage sales teams.

Marketers use CRM systems to manage and execute campaigns. The sales leads generated by a digital marketing campaign are stored in a CRM system, along with details associated with that campaign. As these sales leads develop into customers, details are tracked and updated in the CRM system. Marketers also use the CRM system to generate reports and analyze campaign effectiveness in order to inform future campaigns.

Customer support and customer success teams use CRM systems to record and update customer information, including details of support cases and trouble tickets. When a call comes in to customer support, the staffer receiving the call can access the CRM system to review the customer’s full history: products purchased, past trouble tickets and more.

Several other departments access CRM systems today, including executives and business development, finance, legal, IT and human resources teams.

What are the types of CRM systems?

CRM systems are provided in one of two ways: cloud-based or on-premises. With cloud-based, also referred to as Software as a Service (SaaS), the system is hosted and provided by a vendor (such as Salesforce, Microsoft, or Oracle). Customers of cloud-based CRM systems simply access the service from their browsers, with no software to install. On-premises CRM systems require an IT team to install and configure the software on servers that they provision and manage.

In addition to the delivery model, CRM systems come in two other flavors: proprietary and open source. Most cloud-based CRM systems are proprietary, as the vendor providing the CRM does not make the underlying source code available. Open source CRM systems come with the associated software code, which organizations can review and modify.

What’s the difference between a CRM and a CDP?

A customer data platform (CDP) is a central location for all customer data – from the digital and physical worlds – that helps organizations profile and segment customers based on their attributes and behaviors. While a CRM is used primarily as an operational tool, a CDP is used to drive analysis and insights from customer data, to make advertising more efficient and effective, and to help personalize customer experiences for each individual. 

While a CRM helps sales, marketing and customer support carry out their day-to-day business, a CDP incorporates data from additional customer-facing systems (such as website analytics, in-store POS systems, loyalty programs, social media, and billing systems) to help analyze customer profiles and use predictive analytics to create actionable next steps with customers. 

While CRM data is transactional, a CDP’s data is multi-dimensional and available minute by minute. While CRM systems define the sources of data and the structure in which to store it, the best CDP systems provide no limitations on structure and can ingest and store unstructured data. Staff Staff
The staff has collaborated to deliver the latest information and insights on the customer data platform industry.

More To Explore

Is 2024 the Year of the CDP?

Discover why 2024 will be a critical year for the CDP market. Learn more about the latest trends, challenges and opportunities shaping customer data platforms.