What is CRM? Definition, Types and Benefits

A customer holds the key to improving how your business works. They provide the economic support your company needs to keep going. Those profits you see on the balance sheet at the end of the year are all thanks to some great customers your company has. Maintaining great customer relationships can help retain your customers and keep them coming back for more purchases. If you need to get this done, you need a CRM. What is the meaning of CRM and what are the types of CRM. We shall look at this in more detail in this article.

What is CRM?

CRM (Customer Relationship Management) is a combination of strategies, processes, and software used by businesses to manage and analyze customer interactions throughout the customer lifecycle. It helps organizations streamline sales, improve customer service, and drive business growth.

A CRM system centralizes customer data, tracks interactions, and provides insights that enable personalized engagement, better decision-making, and stronger customer relationships.

What is the Importance of CRM?

A CRM is all about building great customer experience. If CX was something companies could overlook, then a CRM probably wouldn’t be important. But in the customer-centric post-pandemic world we live in today a CRM is a vital tool in the management of customer experience and depending on the type of CRM, will help manage that aspect of customer experience which is most crucial to your organization.

What are the Objectives of a CRM?

The objectives of a CRM can range from increasing lead generation and reducing marketing and sales expenditure to improving customer retention or just delivering a great customer experience. Want to derive meaningful data from a history of customer interactions. That is possible too! There are different types of CRM, which help you achieve different objectives. They are described in the next section.

What are the Different Types of CRM?

Though CRM collectively refers to the processes, strategies and tools needed to manage an ongoing relationship with your customers, when one comes up with a question like this, it is usually about the three different types of CRM software. With that in mind, it can be of three types:

Collaborative

This type of CRM breaks down the silos in a company and brings together the data from various departments, both customer-facing and otherwise, to create a 360-degree view of the customer and to understand the customer better. Collaboration helps to build a better view of the customer journey across channels and departments and put things in perspective when one is drafting an acknowledgement or birthday email, for instance.

Operational

This type of CRM will streamline and automate various customer-facing processes so that the interaction with the customer is easier to handle and you can generate more leads and retain more customers. Operational CRMs are best suited for smaller teams who want to automate their sales and marketing efforts to focus more on creative and strategic aspects of the campaign.

Analytical

In this type of CRM, the customer data is collected across all touchpoints and meaningful insights can be drawn from them. This kind of CRM can give you, for instance, insights into how your sales teams are doing, which deals are stalling and how many prospects are close to a purchase etc.

CRM Software: 3 Examples

Salesforce CRM

Salesforce is an operational CRM. It has built-in apps for customer service, marketing, e-commerce and sales. It performs contact, quote and opportunity management, quote to cash, lead management and so on.

Employees can use slack to collaborate and communicate between each other and with customers. It even has a dedicated solution for small businesses and analytics capabilities built-in too and supports business intelligence with Tableau. It supports integration with a large number of third-party applications.

Zoho CRM

Zoho is an analytical CRM, which also has quite a bit of sales force and marketing automation such as lead management and deal management, customer segmentation, lead nurturing etc.

It has an in-built sales process builder and supports collaboration across teams and integration with third-party applications such as Google Drive, DocuSign, MailChimp etc. And of course, it integrates well with Zoho’s own office solution elegantly. 

SugarCRM

Sugar is not just a CRM, but more like a marketing, sales, and services platform that establishes a strong relationship with customers. It has marketing, sales and service automation functions and supports document management.

It even has a case management, account and bug tracking solution, and provides a self-service portal for customers and tight email and calendar integration that will benefit your teams greatly. Its sales forecasting and reporting prowess is second to none. It can identify at-risk customer accounts and the knowledge base it provides will also help customers further.

The Role of Alp Consulting

Not sure which CRM solution you need of these three or is the jargon already getting to you?

Alp Consulting can guide you to the right CRM for your business and even support the implementation and deployment of the CRM, handholding you through how to automate and use the analytics features as well. Our teams of consultants and CRM engineers come with the gift of several years of experience managing CRMs and training large teams on how to use them to achieve their goals of better customer engagement and retention.

What are the Roles and Responsibilities of a CRM Manager?

1. Direction: A CRM manager decides on the onboarding of customers in the CRM, and builds strategies that will help convert leads, retain more customers and improve customer experience

2. Listening: By listening to the customer’s conversations across channels, a CRM Manager can gauge what the customer wants, and then can lead the creation of hyper personalized content to target each customer through the right channel.

3. Conflict resolution: A CRM manager also bears the responsibility of resolving conflicts that are CRM-related by bringing together representatives of various teams and identifying the source of the issue and discussing with the appropriate stakeholders to solve the problem.

4. Refresh image: Through the CRM, you can get to know what customers really want. With this in mind, you can refresh the brand image to better fit in with their needs. You can also build a more positive brand image by spreading positive feedback from your customers.

5. Follow through: Acknowledging a customer’s problem and following through to a solution is what a good CRM or client relationship manager does. He also accomplishes what he promises to the customer and ensures that the customer’s request is fulfilled.

6. Administrative duties: As a CRM Manager, you also need to organize and monitor the CRM for duplicate or incorrect entries and maintain only relevant contacts and their details.

7. Coaching sessions: As a CRM Manager, you are also held accountable for how well acquainted the member of every team is with the CRM. Any gaps in understanding how to use the CRM must be addressed at the earliest, with adequate training.

8. Communication: You take the lead in communicating any updates to the CRM to teams across your company. You also inform both sales and marketing teams how it simplifies their work routine.

9. Reporting to senior management: As a CRM manager, you report to the senior management on the success of campaigns that have been administered based on the CRM and what remedial measures, if any can be taken to generate more leads or retain more customers and improve customer sentiment, whatever the initial objective of the campaign was.

What is the Process of CRM Implementation?

1. First, Understand and analyze your requirements. In which stage of maturity is your organization in? Is it a startup that is trying to acquire more customers and has fewer hands-on boards or is it a larger organization with customer retention and building online reputation as the goals?

2. Pick the right type of CRM, based on your needs and goals. Think of the processes in your company and how it will help in its management, how easy it is to use, and what integrations are available outside of the box.

3. Pick the right team to manage the CRM. Define the people who will be using the CRM, consisting of system administrators, account manager, data analysts, marketing and sales executives etc. Define a proper role that each will play in managing the CRM.

4. Create a change management plan and communicate budget to stakeholders. Create a plan on how ready you and the teams within the organization are for the CRM, how you will train and then manage your teams as the data is migrated and then as the CRM goes live. Give an account of how much it would cost to avail any consulting support if necessary during the setup phase, for the data migration and to train everyone on the CRM to the decision makers and get their support.

5. Setup the CRM and then migrate the customer data to it. In this phase, you must ensure that the data you are migrating first is of the highest priority only and that you migrate only limited data, to begin with. For this you must have a data brief and ensure that the data is accurate and formatted correctly. Even with current and accurate data, it could take weeks for the migration.

6. Setup the CRM for use and then train your employees on it. This is the last phase of CRM implementation. Once you train your employees on how to use the CRM, they can start sharing their thoughts on how to take it further and if there are any gaps in understanding, then you could address them with a training service provider too, if need be.

Importance of the Right CRM Implementation

The right CRM implementation is absolutely crucial for the success of your sales and marketing efforts and for your organization to grow. If the initial communication of the cost required for training are not communicated to decision-makers, it can lead to unnecessary worry.  Also, if the data migration does not happen smoothly, or if the integration is not well set up with a customer data platform, for instance, then it can affect the overall customer experience too with your brand.

What are the Features of CRM?

Though not an exhaustive list, here are some of the main features of a CRM.

Contact management

The customer entries are stored accurately and ordered with custom fields in an easy to access, use and update database. The user views are customizable, and the contact management can be further simplified by updating certain fields automatically based on other fields. For instance, if a number starts with +1, then it automatically updates the country to the USA.

Workflow automation

Workflow automation helps to automate certain marketing, sales and customer care activities to allow agents to focus on other aspects of their work that are more strategic and creative. It can automate mailers on form submissions, sending out acknowledgement mails on customer feedback and even directing the customer to the knowledgebase in case of queries that need further assistance.

Lead management

How many leads have been generated and in which stage of the buying cycle are they? How close are any of them to making a purchase. Is there an email that needs to be sent out to just a few of them? This too can be done by the CRM.

Interaction tracking

Track the conversations you have with specific prospects and make notes on the level of collaboration needed during the sales cycle. If there are a number of stakeholders involved, you might need a collaborative CRM.

Email integration

Integrate with different mail service providers to quickly set up organized lists of the contacts and also to act as a hub for cross-collaboration. This can allow the employees to even link up their personal email IDs to the CRM and use them for communication if the customer insists or if the management decides to.

Third-party software integration

A CRM could integrate with third-party software to provide additional features not available within it. An example of this is CRM that integrates with CDP, a customer data platform, that gives a more high-level view of customer data, enabling decision making.

Document management

Documents of different formats can be managed using the CRM and you can view them within the system as well, in CRMs such as Zoho, which have an inbuilt document management system. There is also a central location where all the documents will be stored and everyone on the team knows where to find it on the CRM and all sales content can be tracked. The files can also be uploaded through a content delivery network to the customer. Hubspot is able to do this.

Sales Pipeline management

Manage the entire sales pipeline in your CRM. If you have a lengthy sales process, then you might want to monitor the entire sales funnel for any cracks that is allowing the customer to leave the funnel and go with another product or service probably. It is possible to view the entire customer journey in the CRM and then decide how to orchestrate it as per your need.

Analytical reporting and Sales forecasting

You can generate reports based on the geography you are in, the performance of each sales rep etc. Based on historical data, you can also predict future patterns in sales. For example, if you are moving to another country or region, then you can predict what profits you would generate there based on past trends, the performance of newly acquired sales reps, and the success of your product or service this far.

What are the Benefits of CRM?

There are several benefits of a CRM. The four main among them are listed below:

1. Connect with customers and retain them: A CRM helps you establish and maintain a meaningful relationship with customers. You can endear your frequent customers by automatically sending them wishes on anniversaries and important dates, acknowledging their support in trying times for your company.
2. Automates your most important processes, saving time and cost: if there are any sales or marketing processes that are time consuming and probably even costly when handled manually, a CRM can help automate them.
3. Do business in any geography: You can work in any geography as all the data is stored in the cloud and your workforce may be scattered too, but they will have common goals.
4. Safeguards your business: A CRM safeguards your business contacts in a reliable database, for which privileged access can be enabled.

FAQs – Frequently Asked Questions

Q. What is the full form of CRM?

A. CRM is the abbreviated form of Customer relationship management. This could mean processes, strategies or tools for customer relationship management.

Q. What is CRM software?

A. CRM software is used for managing relationships with customers. It can give insights into customer behavior and preferences that can crucially affect sales.

Q. What is the difference between CRM and SCM?

A. CRM is about customer relationship management whereas SCM or supply chain management is about procuring materials, manufacturing and then handling logistics and finally marketing the finished goods to the customers. There is no customer relationship management in SCM.

Q. What is the difference between CRM and eCRM?

A. A CRM focuses on both online and offline aspects of a relationship with the customer, whereas the E focuses on only using the internet to interact with the customer and to improve customer experience.

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Harish K A

Zoho Product Specialist

Harish K A is a Zoho Product Specialist at Datacore Technologies, bringing over 6 years of hands-on experience in Zoho implementation, consulting, and project leadership across diverse business domains. As the Founder and Partner of Zsolution, he has helped organizations streamline workflows through customized Zoho solutions. His expertise spans CRM configuration, automation, integration, and enterprise operations management. Harish’s strong technical acumen and client-focused approach enable businesses to achieve digital transformation through scalable Zoho ecosystems.