What Is CRM?

What is CRM: A definition

CRM stands for customer relationship management. It is a system that helps companies organize and track every interaction with existing and potential customers.

The goal is simple: improve relationships and mutual understanding, so the business gets better results on one side and keeps a satisfied client on the other.

CRM technology helps companies stay connected to customers, streamline processes and increase profitability.

In the broader sense, CRM systems help companies stay connected to their clients through three components that every system contains:

• processes,
• technology (the tool), and
• people (the company's employees).

Processes are the path every CRM system follows. Technology is the engine and the tool used to carry out, record, analyze and plan interactions. People (employees), the critical and central element, are the ones who drive the whole CRM system and manage it.

When people talk about CRM, they usually mean the CRM system (the technology or tool), and less often the other two components. But the truth is that none of them can deliver the expected results without the others.

A CRM tool usually means a technology solution, application, platform or software that records every activity and interaction with a client, supports the sales or support process by tracking the status of each current opportunity, increases employee productivity and makes everyday tasks easier.

CRM tools can bring together customer and company data from different channels and use artificial intelligence (AI) to manage relationships better across the entire customer lifecycle, from marketing and sales, through e-commerce, all the way to customer service.

That, in short, is the definition of CRM. So why does it matter, and who can benefit from it? Let's take a look.

Who is CRM for?

Companies and organizations of all sizes use CRM software.

It is useful for large companies that want to track customer activity in one place and easily share that information across teams, for small businesses that often have to do more with less, and for startups that aim to be fast and efficient. Whatever your industry, and even if you are a nonprofit, a CRM system can help you communicate with your customers.

A CRM system gives every department — from sales, customer service and business development to HR, marketing or any other line of business — a systematic way to manage interactions and relationships with external parties (clients, potential employees), all with the aim of improving the business.

A CRM tool lets you store data on clients and prospects, identify sales opportunities, log service issues and manage marketing campaigns, all in one central location.

This makes information about client relationships available to everyone in the company who needs it.

Why does CRM matter for your business?

Doing business is getting more complex. The average organization uses almost 1,000 different applications, and only 28% of them are connected to each other.

To stay a step ahead, your business has to be customer-focused and backed by the right technology. But getting accurate, up-to-date and useful information is often not easy.

How do you turn all the data streams coming in from sales, customer service, marketing and social media into concrete, usable insights?

With a CRM solution, of course. Here are a few key reasons why using a CRM database matters for your business.

A single source of truth

Customer relationship management software such as Salesforce CRM gives you a clear, unified view of every customer. It is a simple, secure and customizable dashboard showing past purchases, order statuses, open support requests and much more. This information is valuable, especially since 70% of customers expect every representative they contact to know their purchase history and previous issues.

Whether customers reach you by phone, chat, email or social media, a single source of truth lets everyone on your team deliver the level of support they expect.

Savings and lower costs

A single source of truth does not only benefit customers; it also helps companies be more organized and focused on revenue-generating activities. Sales teams generate huge amounts of data every day through conversations with prospects, meetings and notes on key information.

If that data is recorded only on paper, in personal notes or stays “in people's heads”, the consequences can be serious: information gets lost easily, important commitments are left unfinished, and customers are ranked by gut feeling instead of data. If an employee leaves the company and their contacts and notes were not saved in the CRM system, part of the business can walk out the door with them.

Using CRM software means less admin and more time for selling.

Connecting every team

CRM connects all the teams in a company and makes it easy to share the information that makes everyone's job easier.

For example, marketing teams can use CRM tools to manage campaigns and build data-driven customer journeys. CRM gives visibility into every potential inquiry or contact and clearly shows the path from interest to closed sale. The e-commerce team can then offer personalized offers on the website, while the customer service team already sees the communication history if the customer gets in touch with a question.

Higher productivity with artificial intelligence

The biggest gains come when CRM is combined with the power of artificial intelligence. That way you can quickly gather everything you know about a customer (and even what you didn't know) and use it to personalize every interaction. This level of insight makes every employee smarter and more productive, especially when you use AI agents that can take action on their own based on your instructions.

AI agents also speed up work for teams across the whole organization. Tasks that until recently took hours, such as writing sales emails, coming up with marketing messages or translating product descriptions, can now be done in seconds.

CRM systems with built-in AI let employees forecast results more accurately — from quarterly sales targets to e-commerce sales or the best time to send a marketing email.

What are the benefits of CRM?

There are many reasons why using CRM software pays off, especially when CRM is combined with artificial intelligence and trusted data. Here are just some of them:

1. Connecting teams and breaking down silos

One of the key benefits of CRM is easy data sharing between teams, which benefits both customers and the company.

CRM gives every team member a simple, customizable interface with real-time updates, ideal for better customer support. For example, when a customer calls with a question, the agent immediately sees their full history: previous quotes, purchases and communication.

Thanks to artificial intelligence, CRM can even suggest new products the customer might like. If the CRM also includes messaging capabilities, the whole organization can collaborate more easily, because all the relevant data is available instantly.

2. Better business results

Introducing a CRM platform delivers concrete results. Employees save time, work more efficiently, uncover new opportunities and serve customers better. Companies around the world using Salesforce CRM report the following results:

Sales results

• +30% revenue growth
• +30% higher win rate
• +30% faster deal closure

Marketing results

• +32% higher ROI
• +30% higher customer lifetime value
• +34% more B2B leads

Customer service

• +32% higher customer retention
• +32% higher customer satisfaction
• +21% faster case resolution

Digital commerce

• +28% higher online revenue
• +29% faster rollout of new strategies
• +19% higher digital conversion rate

IT and technology

• 22% lower IT costs
• +30% faster implementations
• +30% faster process automation

Source: FY2024 Salesforce Customer Success Metrics Global Highlights (data from 10 countries, 2,165 customers)

3. Using AI to spot trends and improve efficiency

AI-powered CRM helps the business grow.

AI makes employees more productive and customers more satisfied, and helps the company recognize opportunities that would otherwise go unnoticed.

AI agents can automatically provide 24/7 customer support, engage with prospects, give personalized recommendations and much more.

4. Working faster with automation

CRM software lets employees get more done, faster.

By automating CRM processes you can simplify complex workflows. By integrating tools such as Slack, employees can collaborate and automate tasks right inside the flow of work. The most advanced CRM software even suggests and builds automated processes on its own with the help of AI.

5. Increasing customer lifetime value

When you understand your customers better, opportunities for additional sales (cross-sell and upsell) become obvious. This lets you generate more revenue from existing customer accounts and build long-term relationships. With better insight and faster response, customers are more satisfied, and satisfied customers come back and spend more.

6. Better customer service

Today's customers expect fast, personalized support at any hour of the day or night. A CRM system lets agents quickly access a customer's interaction history and immediately provide relevant, accurate information.

7. Improving products and services

A good CRM system collects information from many sources, inside and outside your company. Besides giving insight into individual customers, CRM can also work as a “market listening engine”. With AI, you can see more precisely how people think and what they say about your brand. That helps you improve your offering, spot problems early and identify potential gaps.

What does a CRM system do?

CRM lets you keep contact information for existing and potential customers in one place, track sales opportunities, log customer requests and manage marketing campaigns.

All of this is organized in a secure, simple digital record that holds data such as email address, phone number, social media accounts and the full history of previous interactions with your company.

CRM helps you find new customers, win their trust and keep them. Thanks to automation, CRM can gather even more information faster, including news and changes related to your accounts, so the whole team is always up to date.

Key features of a CRM system

Customer relationship management (CRM) software gives companies tools that help them communicate better — both internally and with customers. Here's how:

Flexibility, security and lower costs with cloud CRM

Unlike earlier versions, today's CRM software lives in the cloud, which means you can securely store and access all your customer data anytime, from anywhere. Every employee has access to the same information in real time and can update it wherever they are.

Moving to cloud CRM also means the system is easy to implement. No hardware is needed, which cuts costs significantly.

IT teams have less work because there are no complications with software versions or scheduling updates. In addition, cloud CRM lets you pay only for as many user licenses and features as you actually need. As your business grows, you can easily add new options and users, because the CRM grows with you.

Working in the "cloud" changed CRM from the ground up. Anyone can now work from anywhere and on any device, which improves collaboration and lowers costs. On top of that, customer and company data is better protected.

A single view of the customer

By bringing together all data on customers and prospects, CRM software can manage day-to-day activities and interactions.

For marketing teams, that means sending the right messages at the right time through targeted digital campaigns and customer journeys. Sales teams get a clear view of the sales funnel and can forecast results more accurately. E-commerce teams can quickly launch and scale online sales, whether through website orders or in-store pickup, for consumers (B2C) or business buyers (B2B). And customer service can answer inquiries on any channel — from the office, from home or in the field.

Connecting with other applications

We already mentioned that the average company uses about 1,000 applications, most of which don't talk to each other.

A CRM platform can connect with other business applications that help you build customer relationships. CRM integrates with common tools such as e-signature, accounting, invoicing and surveys, enabling a two-way flow of information and a complete view of every customer.

Built-in artificial intelligence you can trust

The latest CRM systems come with built-in intelligence and proven AI technology.

They use customer data to create adaptive, predictive and generative AI experiences that automate administrative tasks such as data entry and assigning leads or customer cases.

Automatically generated insights or summaries of customer service calls help you understand your customers better and even predict how they will behave, so you can offer them the right content at the right time. AI can even uncover opportunities that have so far been hidden in your business data.

How much does CRM cost?

There are many ways CRM software can have a positive impact on your business. But that doesn't mean it has to be expensive.

There are pricing options for every type of company. CRM can be tailored to the products and services you need, the size of your company, the industry you operate in and the specific needs of your teams. Whether you are a small business or a large corporation, it is easy to take the first step.

If you'd like to find out how Salesforce CRM can help your business specifically, write to us through our Contact page. We're here to find the best solution together.

Source: Salesforce.com