Customer Relationship Management (CRM) manages customer interactions to enhance customer experience. Learn about CRM tools, types, strategy, benefits and features.

Customer Relationship Management (CRM) is often referred to as a process, strategy, or software/technology that enables organizations to manage relationships with their customers, vendors, and suppliers.

"In this article, we will look at the concept of CRM, different tools and types of CRM software, and the basic terminology used in CRM. We will also discuss essential CRM features, benefits, steps to create a strategy and how to go about choosing the right CRM for your organization."

CRM (customer relationship management) 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 with customer retention and drive sales growth.

CRM systems compile customer data across different channels and points of contact between the customer and the company. These can include the company's website, telephone, live chat, direct mail, marketing materials and social networks. CRM systems can also give customer-facing staff detailed data on customers' personal information, purchase history, buying preferences and concerns.

Why CRM benefits businesses

The benefits of CRM systems apply to all types of organizations, ranging from small businesses to large corporations. They include the following:

• Enhanced customer service: Having customer information, such as past purchases and interaction history, easily accessible helps customer support representatives provide better and faster customer service.
• Trend spotting: Collection of and access to customer data let businesses identify trends and insights about their customers through reporting and visualization features.
• Automation: CRM systems can automate menial, but necessary, sales pipeline 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. This lets business users more easily access and manage that information.

Over time, 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 and other channels. Automation capabilities have been added to many CRM systems, automating various workflow automation processes, such as tasks, calendars and alerts. Other CRM features enable managers to track performance and productivity based on information logged within the system.

Common components and capabilities of CRM systems include the following:

• Marketing automation: CRM tools with marketing automation capabilities automate repetitive tasks to enhance marketing efforts at different touchpoints 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: These tools track customer interactions and automate certain business functions of the sales cycle. Sales force automation tools target sales functions where it's 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 includes 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 to cut down the length of calls and streamline customer service processes. Automated contact center tools, such as chatbots, can improve customer user experiences.
• Oas36ty technology, or location-based services: Some CRM systems include technology that creates geographic marketing campaigns based on customers' physical locations, sometimes integrating with popular location-based Global Positioning System (GPS) apps. Oas36ty technology is also used as a networking or contact management tool to find sales prospects based on a location.
• Workflow automation: CRM systems help companies optimize business processes by streamlining mundane workloads, enabling employees to focus on high-level and creative tasks that help them close deals.
• Lead management: Sales leads can be tracked through a CRM platform, enabling sales teams to input, track and analyze data for leads in one place.
• Human resources (HR) management: 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: CRM analytics examines user data to create targeted marketing campaigns that can increase customer satisfaction rates.
• Artificial intelligence (AI): AI technologies, such as Salesforce Einstein, have been built into CRM platforms to automate repetitive tasks, identify customer-buying patterns and predict future customer behaviors.
• Project management: Some CRM systems include features to help users track client project details, such as objectives, strategic alignment, processes, risk management and progress.
• Integration with other software: Many systems integrate with other software, such as call center and enterprise resource planning systems.

Types of CRM technology

The four main vendors of CRM systems are Microsoft, Oracle, Salesforce and SAP. These four tend to be the best systems for large companies; other providers are popular among small to midsize businesses. The types of CRM technology offered are as follows.

1.  Cloud-based CRM

CRM that uses cloud computing is also known as software as a service or on-demand CRM. Data is stored on an external, remote network that employees can access anytime and anywhere there is an internet connection. Sometimes, a third-party service provider oversees system installation and maintenance. The cloud's quick and 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 could 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 cost-effective option. Vendors typically charge the user on a subscription basis and offer the option of monthly or yearly payments. However, cost might still be a concern because paying subscription fees for software can be more costly over time than investing in an on-premises model.

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

2.  On-premises CRM

On-premises CRM 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 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 Aptean and Salesforce, also offer on-premises versions of their CRM software.

3.  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 using the system. Open source CRM systems enable the addition and customization of data links on social media channels, assisting companies looking to improve social CRM practices.

Platforms such as Oas36ty, Bitrix24, OroCRM, SugarCRM and SuiteCRM 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.

4.  CRM examples in practice

Examples of CRM use vary by the type and purpose of the specific CRM system. Common ones include the following.

5.  Contact center

Traditionally, data intake practices for CRM systems have been the responsibility of salespeople 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. Contact centers gather data and revise customer history records through service calls and technical support interactions.

6.  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're airing grievances or promoting products.

To add value to customer engagement on social media, businesses use various social CRM tools that monitor social media conversations. These tools look for everything from specific mentions of a brand to the frequency of keywords used to determine a company's target audiences 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 recommend products and overall customer satisfaction to develop marketing and service strategies. Companies try to integrate social CRM data with other customer data obtained from sales and 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 engage with other customers to troubleshoot issues and research products in real time. Customer communities provide low-level customer service for certain kinds of problems and reduce the number of contact center calls. These communities also provide new product ideas and feedback that companies can use in lieu of focus groups.

7. 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 aren't 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.

8. Business-to-business practices

A CRM system in a business-to-business (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 strategies in the B2B market give sales reps more visibility into leads, increasing efficiency throughout the sales process.

What does a CRM system do?

CRM lets you store customer and prospect contact information, identify sales opportunities, record service issues, and manage marketing campaigns, all in one central location that’s available to stakeholders at your company. It does this by organising customer and prospect information in a secure, easy-to-use digital record with information like a contact‌’s email, telephone, social media handle, all previous interactions with your company, and more.

CRM helps you find new customers, win their business, and keep them happy and can use automation to help you collect even more information faster, like news about your accounts so that everyone stays up to date.

Key features of a CRM

Customer relationship management software provides businesses with tools that help them communicate better — both internally, and with customers. Here’s how:

FLEXIBILITY, SECURITY, AND LOWER COSTS WITH A CLOUD CRM.

Unlike the early days, today’s CRM software lives in the cloud, giving you the ability to safely save and access all of your customer data from anywhere at any time. That means every employee has the same information in real-time, and can make updates wherever they are.

Shifting to the cloud also means that a CRM system is easy to implement. There’s no hardware, which significantly reduces costs. Installation and ongoing management is an easy lift for IT teams, since there are no frustrating version control issues or updates to schedule. And, with cloud-based CRM, you only pay for the number of seats you use and features you need. As your business grows, you can add more of both, enabling your CRM to scale along with your plans.

Moving to the cloud has changed CRM in countless ways. Now anyone can work from anywhere on any device, boosting collaboration and bringing down costs. Plus, it offers enhanced security, so your customer and company data is always safe.

• UNIFIED VIEW OF THE CUSTOMER.

With a consolidated view of every prospect and customer, CRM software can manage day-to-day customer activities and interactions. For marketing, this means engaging your prospects with the right message, at the right time, through targeted digital marketing campaigns and journeys. Sales reps can work faster and smarter with a clear view of their pipeline and accomplish more accurate forecasting.

Commerce teams can quickly launch and scale ecommerce — from online orders to curbside pickup — for their consumer shoppers (B2C commerce) and business buyers (B2B commerce). And customer service agents can respond to customer needs on any channel — from the office, at home, or in the field.

• CONNECTS WITH YOUR OTHER APPS.

As we mentioned, the average company uses over 1,000 apps — most of which can’t talk with each other. A CRM platform can connect with other business apps that help you to develop customer relationships. CRM solutions integrate with your favourite business tools, such as document signing, accounting and billing, and surveys, so that information flows both ways to give you a true 360-degree view of your customer.

• TRUSTED AI IS BUILT-IN.

The latest CRM systems have built-in intelligence and trusted AI. They use your customer data to create customisable, predictive, and generative AI experiences that automate administrative tasks like data entry and lead or service case routing. Automatically generated insights or service call recaps help you understand your customers better, even predicting how they will feel and act so that you can prepare the right outreach. AI can even help you to find opportunities that may be hidden in your business data.

How much does a CRM cost?

There are many ways that customer relationship management software can make a big impact on your business. But that doesn’t mean the cost has to be big. CRM products and services are made for businesses of all sizes and to meet needs across all areas of a company. Whether you’re a small business or a large enterprise, it’s easy to get started.

Have a look at the Oas36ty pricing page to see an overview of CRM costs based on the size of your business and the products that are right for your needs.

CRM Software Based on the Type of Installation

We can further segregate this type of category into two types:

1. On-premise CRM Software: Companies that handle sensitive customer information such as financial or healthcare institutions prefer on-premise CRM software. These systems incur a hefty upfront investment as it includes infrastructure as well as software development costs.

These CRM systems are rigid in terms of functionality as adding a new feature is often expensive. Further, the organization itself must take care of data maintenance, security, and disaster recovery plans. Organizations can outsource these services to a third-party vendor, but they incur additional costs depending on your requirements.

2. Cloud-based CRM Software: A business can use web-based/cloud CRM at a monthly recurring cost.

Compared to on-premise CRMs, cloud CRMs are more flexible and budget-friendly as these CRMs are device-agnostic, and the service provider offers maintenance and data security.

These CRMs take a one-size-fits-all approach. Therefore, customizations may not always be possible. And since your data is stored at the vendor’s servers, you are at the mercy of the vendor in case of a server outage.

CRM Software Based on Functionality

There are three types of CRM tools based on their functionality:

• Operational CRM: These CRMs help businesses run their routine sales, marketing, and customer service operations. An operational CRM system enables you to track the customer journey through activities such as contact management, lead generation, lead scoring, and marketing automation Opens a new window.

• Analytical CRM: Analytical CRMs collect and analyze heaps of customer data and help businesses make data-driven decisions. These CRMs offer data management, customer acquisition, and retention activities through data mining, sales forecasting, conversion attribution, etc.

• Collaborative CRM: Collaborative/strategic CRM software enables organizations to share customer data across internal departments and external stakeholders (vendors, partners, etc.) to enhance Customer Experience (CX). While operational and analytical CRMs are also capable of information sharing, collaborative CRMs emphasize, particularly on the CX aspect.

What Are the Types of CRM Software?

Holistically, we can segregate CRM tools in two categories, viz.

• Based on installation/implementation
• Based on functionality

Let’s look at each of them in brief:

1. CRM Software Based on the Type of Installation

We can further segregate this type of category into two types:

1. On-premise CRM Software: Companies that handle sensitive customer information such as financial or healthcare institutions prefer on-premise CRM software. These systems incur a hefty upfront investment as it includes infrastructure as well as software development costs.

These CRM systems are rigid in terms of functionality as adding a new feature is often expensive. Further, the organization itself must take care of data maintenance, security, and disaster recovery plans. Organizations can outsource these services to a third-party vendor, but they incur additional costs depending on your requirements.

2. Cloud-based CRM Software: A business can use web-based/cloud CRM at a monthly recurring cost.

Compared to on-premise CRMs, cloud CRMs are more flexible and budget-friendly as these CRMs are device-agnostic, and the service provider offers maintenance and data security.

These CRMs take a one-size-fits-all approach. Therefore, customizations may not always be possible. And since your data is stored at the vendor’s servers, you are at the mercy of the vendor in case of a server outage.

2. CRM Software Based on Functionality

There are three types of CRM tools based on their functionality:

1. Operational CRM: These CRMs help businesses run their routine sales, marketing, and customer service operations. An operational CRM system enables you to track the customer journey through activities such as contact management, lead generation, lead scoring, and marketing automation Opens a new windows.

2. Analytical CRM: Analytical CRMs collect and analyze heaps of customer data and help businesses make data-driven decisions. These CRMs offer data management, customer acquisition, and retention activities through data mining, sales forecasting, conversion attribution, etc.

3. Collaborative CRM: Collaborative/strategic CRM software enables organizations to share customer data across internal departments and external stakeholders (vendors, partners, etc.) to enhance Customer Experience (CX). While operational and analytical CRMs are also capable of information sharing, collaborative CRMs emphasize, particularly on the CX aspect.

Benefits of CRM Software for Growing Businesses

Before we delve further into CRM, let’s understand the meaning of commonly used terms in the CRM realm. You may not come across all the terms mentioned here in this article, but it’s worth to know these terms as you continue to learn about CRM:

• 360-degree Customer View: This is an exhaustive view of a customer, including their contact details, past communication, campaign history, and other pertinent information.
• Automation: Sales and marketing activities such as email campaigns, contact management, activity tracking, etc. that can be constantly monitored by the system.
• Contact: An entry that stores an entity’s name, email address, phone number, physical address, and other information. The entity could be a customer, prospect, company, partner, or a vendor.
• Contact Management: It refers to organizing, updating and storing contact information in the CRM software.
• Dashboard: It’s the landing page when a user logs into the CRM software. The dashboard displays crucial analytics information and sales data and navigation options.
• Deal: Also known as an opportunity, a deal is a potential sale that has moved to the last stage of the sales funnel.
• Integrations: This is a feature that lets you connect the CRM software with other software applications in your MarTech stack to enable seamless data import and export. For example, you can integrate your CRM system with a Marketing Automation Platform (MAP)Opens a new window , social media management tool, etc. to get a holistic picture of the customer.
• Lead: A lead has expressed their interest in your offerings. Leads are generally at the first stage of the sales funnel.
• Lead Conversion: Lead conversion signifies the conversion of a lead into a customer
• Lead Management: Lead management/nurturing activities help users stay in touch with leads to ensure that they don’t drop-off from the sales funnel.
• Pipeline: Sometimes referred to as a funnel, a pipeline shows various stages of the purchase journey. A pipeline is generally divided into four stages, viz. lead generation, qualification, proposal, and sale.
• Prospect: A prospect is a sales-ready lead that is interested in your product and can purchase it.

Challenges of Implementing CRM Solutions

1. Tech Integration: Some CRM tools may not be compatible with the software stack of the organization or be unable to enable customization. Alternatively, employees may not have the requisite skills and knowledge to implement or maintain the CRM tech.

2. Cost Restraints: The budget has always been one of the major restraints for CRM adoption. CRM tools are often cost-prohibitive, and additional costs can also arise from implementation. The organization may also face cost challenges in training employees for the tool. However, skipping CRM expenses can also backfire badly.

3. Quality of Data: Organizations are often disorganized with their data, and poor data management practices are a key challenge in adopting CRM. Incomplete data records or poor-quality of data inputs in CRM tools will generate poor-quality results.

4. Time Constraints: Selecting the right CRM solution for your organization and implementing it is time-intensive. Testing, integration, deployment, and training efforts often result in significant downtime. These steps cannot be skipped or rushed either and must be kept in mind.

5 of the Best CRM Tools for Your Business

Implementing a CRM tool that fits perfectly in your business framework is challenging. CRM software helps you manage customer interactions and becomes a central node for other departments to collaborate with sales. Therefore, it’s imperative to ensure that the CRM tool of your choice satisfies all these criteria.

In this section, we will look at five top CRM software that you can evaluate and adopt.

Note: Since most of the following tools offer the basic features such as email, calls, SMS, social CRM, reports, etc., we are focusing on the other tools here.

1. HubSpot CRM

HubSpot’s free CRM is a top-notch system for startups or anyone looking to get acquainted with CRM tools.

HubSpot CRM helps you manage your sales pipeline, create automated email sequences for your leads, communicate with your prospects via live chat or emails, and track customer interactions across email, social media, or calls. Hubspot includes a template marketplace and a large number of integrations.

HubSpot CRM is free for contacts up to 1,000,000. As your company grows, you can upgrade to other marketing, sales, and customer service packages, or you can integrate other third-party products with the tool.

2. Zoho CRM

Zoho CRM is one of the products from Zoho’s exhaustive business suite. Zoho CRM offers features that are suitable for both SMBs and large-scale organizations. The CRM application comes with sales automation, pipeline management, marketing automation, and process management features. You can connect with your leads across different platforms through a single interface.

Zia – Zoho’s AI bot helps businesses with identifying trends, predicting sales, and data enrichment activities.

Companies can get started with Zoho CRM for as low as $18/month and upgrade as they move along.

3. Freshsales

Freshsales is a sales CRM by Freshdesk. Features such as event tracking, phone, emails, workflows, etc. enable you to track your leads and deals across their purchase journey.

Like HubSpot and Zoho CRM, Freshsales offers mobile CRM and a range of products for business, making it easy to build a comprehensive MarTech stack.

Fresh sales are perfect for SMBs and mid-market enterprises, and you can get started with the tool for $18/month.

4. Salesforce Sales Cloud

Salesforce Sales Cloud is a CRM tool offered by Salesforce. The CRM tool covers the entire purchase journey and includes features such as account and contact management, opportunity management, lead management, intuitive workflows, file sharing, and sales forecasting.

Business owners and salespeople can manage their sales activities on the go through mobile CRM.

Beginners can opt for the Salesforce Essential plan at $25/user/month (paid annually). Users can avail add-ons such as Sales Cloud Einstein (Salesforce’s AI tool) and Pardot (Salesforce’s marketing automation platform) at an additional subscription fee.

5. Oas36ty

Oas36ty is primarily a MAP that also offers specific CRM capabilities. Oas36ty is perfect for freelancers, startups, and SMBs as it provides the ideal blend of features that are useful for both sales and marketing departments.

Oas36ty has a free plan for a list size up to 2000 contacts with bare essential CRM features and paid plans starting $5.99/user/month.

Oas36ty is widely used among startups and SMBs because of its capability to integrate with other enterprise CRMs such as Salesforce.

Who Needs CRM Software?

A CRM software is adopted across B2B and B2C organizations of different sizes, serving different sectors and industries. Here is how a CRM solution helps three types of organizations:

1. SMBs: Small and medium scale businesses’ sales departments have precise requirements and may not need audacious features. CRMs for SMBs are aware of this and hence offer features that let SMBs automate repetitive tasks so that stakeholders can focus on increasing revenue.

2. Startups: Startups are chaotic in their rapid growth stage. CRMs tame this chaos, bring order to sales and marketing departments, and offer intuitive integration and reporting features. This allows startups to measure their progress without having them spend too much time on learning the tool.

3. Enterprises: Enterprises always look to go big, and they require a robust number cruncher with cross-functional collaboration capabilities minus any complexities. Analytical and collaborative CRMs help enterprises achieve just that.

Who Uses CRM Software?

Marketers, salespeople, and customer service professionals require different utilities of a CRM system. Let’s look at how CRM is useful to each one of them:

1. Marketers: Marketers collect customer data from multiple sources, such as lead generation forms, surveys, social media, etc. By integrating the CRM system with a MAP, marketers can supercharge marketing efforts through drip marketing campaigns, social media ad campaigns, and so on.

2. Salespeople: Salespeople are always on their toes needing to communicate with every prospect and customer on a 1-on-1 basis. A CRM tool provides a central repository where they can get to know their customers at greater depth, profile them as hot/warm/cold leads and create real-time sales reports that give them a quick overview of the sales performance.

3. Customer Service Professionals: By integrating the customer support application with the CRM, you get a composite view of your customers and enables customer service executives proactively solve customer queries. The use of social CRM allows them to communicate with customers via social media, calls, text, chat, etc.

FAQ’s

What does CRM management do?

CRM (customer relationship management) 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 with customer retention and drive sales growth.

What is CRM with an example?

Customer relationship management (CRM) is a technology that allows businesses both large and small to organise, automate, and synchronise every facet of customer interaction. CRM system examples include marketing, sales, customer service, and support.

What are CRM tools?

CRM stands for Customer Relationship Management. It's a technology used to manage interactions with customers and potential customers. A CRM system helps organisations build customer relationships and streamline processes so they can increase sales, improve customer service, and increase profitability.

What is the main role of CRM?

Customer relationship management (CRM) is a technology for managing all of your company's interactions with current and potential customers. The goal is simple: improve relationships to grow your business. CRM technology helps companies stay connected to customers, streamline processes, and improve profitability.

What is the CRM process?

The CRM cycle involves marketing, customer service and sales activities. It starts with outreach and customer acquisition and ideally leads to customer loyalty.

What is CRM Marketing?

Customer relationship management (CRM) marketing is a term referring to the strategies and tactics, as well as to the technologies supporting the execution of said strategies and tactics, marketers use in order to manage the relationship with their customers throughout the customer lifecycle.

What is Zoho used for?

The World's Favorite CRM, Zoho CRM, is a cloud-based customer relationship management software for managing sales, marketing, and customer support in a single system.

What are CRM models?

A CRM model is a framework for how your company will manage customer relationships—from acquisition to retention. The four most popular CRM models follow a similar flow: learning about your customers, grouping them, contacting them, and then using what you learn to tweak internal processes and optimize your approach.

What is a CRM roadmap?

A CRM roadmap is a strategic plan that outlines how you will use your customer relationship management (CRM) system to achieve your business goals. It helps you align your CRM activities with your vision, mission, values, and objectives, and communicate them to your stakeholders.

What is the CRM life cycle?

Customer Lifecycle Stages. As mentioned, the customer lifecycle has five stages: reach, acquisition, conversion, retention, and loyalty. While it's similar to the buyer's journey, the customer lifecycle takes into account the customer's experience, or what happens long after a prospect makes a purchase.