What is CRM?

Customer relationship management (CRM) is a software system that manages your relationships with customers. A CRM system isn’t just one solution. To effectively manage, analyze, and improve your customer relationships, you need a comprehensive set of cloud solutions that supports every step in your customer’s journey. Such an end-to-end solution should include a sales cloud, service cloud, commerce cloud, and marketing cloud, as well as an AI-enabled customer data platform (CDP) that can combine online, offline, and third-party data sources for a complete, dynamic customer view.

Who should use a CRM?

CRM systems are almost always associated with sales teams. Over time, these solutions have extended their reach and become integral to marketing, commerce, and service functions to name a few.

CRM evolves by constantly gathering customer data, analyzing that data, and using the knowledge gained to deepen relationships and improve business results. It allows any customer-facing employee (or those who support customer-facing employees) to convey, “We know you, and we value you.”

A CRM system supports you beyond the sales process, which is crucial to business performance. With the in-depth knowledge of the customer, companies can:

  • Offer and sell new, add-on products—at the right time in the right way at the right price
  • Help service teams resolve issues faster
  • Help development teams create better products and services

Why CRM is important?

You may be wondering why customer relationship management systems are so important. Actually, there’s very little difference—in terms of product features and capabilities—between competing products. So many customers are now making purchasing decisions based on their experience with your business.

To provide a great customer experience (CX), you need a complete view of your customer (and the right data to put that view together). Customer relationship management systems combine data from various sources, including email, websites, physical stores, call centers, mobile sales, and marketing and advertising efforts.

Knowing who your customers are, what they want, what interactions you’ve had with them, and what future interactions will look like is what CRM is all about.

A CRM strategy ensures that you are using the data and analytics processed by your system to achieve your objectives. Your customer strategy will influence your choice of which tools to use, where to host your system, and what to measure to make sure you’re getting the benefits you expect.

The ultimate goal of CRM is to improve customer acquisition and retention. This is the core around which the specifics of your customer strategy will be wrapped. Improving customer acquisition and retention is accomplished by providing experiences that keep your customers coming back. CRM as a strategy—and a tool—makes up the foundation of those experiences.

What is the goal of customer relationship management?

The goal of CRM is to support strong, productive, and loyal relationships with customers through informed and superior customer experiences at every stage of the customer journey. Why? To improve customer acquisition and retention. This central idea is wrapped around your customer relationship strategy. Improving customer acquisition and retention is accomplished in large part by providing experiences that keep your customers coming back. CRM as both a strategy and a tool informs those experiences.

What is a CRM system?

A CRM system gathers, links, and analyzes all the data about a specific customer’s journey including customer information, interactions with company representatives, purchases, service requests, assets, and proposals. The system then provides an interface that lets users access that data and understand each touchpoint. It is through this understanding that the basis for a solid customer relationship is built.

Customer data can also be aggregated to populate commission modeling, sales forecasting, territory segmentation, campaign design, and product innovation, as well as other sales, marketing, and service activities—all of which can help optimize customer acquisition, retention, and revenue generation efforts.

Customer management software and tools help you streamline the customer engagement process, establish strong relationships with your customers, build customer loyalty, and ultimately increase sales and profits.

Types of CRM

Let’s take a look at two scenarios from a customer’s perspective.

You need service on a product you’ve purchased from a business you’ve used before. You even registered the product. When you call the customer support line, the representative has no idea who you are, what you’ve purchased, or when the purchase took place. You now have to go through the tedious process of supplying information that should be readily available to the representative, such as a model or serial number that’s often difficult to find or access. Not only are you wasting valuable time providing this information to a company that should have it on hand, you feel that you’re not very important to them since they seem to know nothing about you. Even though you did receive the service needed, you look hard at the competition the next time you think about purchasing from that company.

Now consider another scenario. You make that support call. By merely taking down your name and verifying who you are, the representative has your entire purchase and service history available and treats you like the valued customer you are. Even with product issues, this type of personal treatment will keep you coming back.

CRM supports the second type of customer experience. Every interaction based on CRM creates an opportunity for your customer to have a more personal, compelling experience. It’s also a chance for you to build brand equity, improve satisfaction, and make more sales. And that’s how you create customer loyalty and increase revenue.


Not every customer relationship management system is made equal. Typically, a B2B sales environment is more complex, with multiple buyers involved. A sale can take up to 12 months to close and involve more steps in the process. B2B deals are larger which means that there are fewer purchases. There are fewer leads because B2B products are not universally needed. Many people like Coca-Cola, but not everyone needs the tire assembly for an off-road earth mover.

Given the level of complexity, you need a customer solution that fits your unique B2B needs. Consider a system that provides the following:

  • Automated workflows to help sales reps manage their workloads and keep track of everything
  • Forecasting capabilities to accurately predict customer behavior and project financial outcomes
  • Greater visibility into what stage of the sales funnel the prospect or lead is in
  • CPQ applications to sell complex, highly configurable equipment that in many cases are found in a self-service environment
  • Quote management to generate quotes and provide a level of detail to prevent order mistakes

Cloud CRM

As with any other business application, the decision to host your CRM system on-premises, in the cloud, or as a hybrid model depends on your business needs.

  • On-premises CRM

    On-premises CRM gives you complete control over your system. But there’s a cost. On-premises CRM systems must be purchased, installed and deployed, monitored, maintained, and upgraded. They can be costly, involve time-intensive installations and upgrades, and require in-house IT resources for ongoing maintenance.

  • Cloud-based CRM

    Software-as-a-service (SaaS) options offer simple interfaces that are easy to use and require less IT involvement and investment than on-premises CRM systems. Any business user can make updates. Because upgrades are pushed through automatically, you always have the most up-to-date functionality without significant IT effort. Cloud CRM also offers the convenience of anytime, anywhere access.

  • Hybrid CRM

    Hybrid CRM require tradeoffs in all the areas mentioned above, but they can also deliver the best of both worlds. However, it’s important to recognize that technology is increasingly moving to the cloud. Companies that remain heavily invested in on-premises CRM risk being left behind as competitors advance to the cloud. Mobility (anytime, anywhere) will be limited. Access to new functionality can be a long, drawn-out process. Also, the most sophisticated AI-based technology—technology that supports virtual assistants, chatbots, next-best recommendations, and predictive analytics—will not be available.

Given all these choices, it remains true that the right CRM model for your business is the one that best aligns with your needs and resources and allows you to interact with your customers in meaningful ways to drive exceptional customer experiences and improve your business results.

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