What Does Customer Relationship Management Mean?
Customer relationship management (CRM) is a data-driven business strategy for managing a company’s interactions and relationships with its current and potential customers.
The focus of CRM is to maintain and drive sales growth by ensuring that customer interactions – and the data produced by those interactions – are effectively managed across all touchpoints throughout the customer lifecycle.
This often involves the use of technology and software suites that integrate marketing and sales with customer experience management, customer service processes, and customer data management concerns.
Techopedia Explains Customer Relationship Management
In today’s fast-moving business landscape, the ability to leverage data-driven insights through CRM is a key factor in staying competitive and adapting to changing market conditions.
The success of a CRM initiative is often measured by sales conversion rates, lead generation, customer retention, issues resolved, and other data-driven metrics relevant to a specific business context.
Types of CRM Software Systems
CRM software is designed to help employees create, manage, and improve internal business processes that directly or indirectly involve customers. The ultimate goal is to enhance business relationships, streamline workflows, and increase profitability by understanding and serving customer needs better.
CRM systems come in several types, each of which is designed to serve specific business needs and objectives based on a business’ operational scale, customer base, and industry. Many of the most popular enterprise-level CRM platforms offer multi-functional capabilities.
The primary types of CRM software are:
This type of CRM software is designed for streamlining and automating business processes in sales, marketing, and customer service. It typically features lead and contact management, sales automation, marketing automation, and service automation components.
This type of CRM software is designed for analyzing customer data to derive insights that can then be used to drive business decisions. It typically features data mining, pattern recognition, predictive modeling, and analytical engine components.
This type of CRM software is designed to facilitate communication and collaboration among various departments and external stakeholders. It typically features interactive document sharing and external partner/channel management components.
Campaign Management CRM
This type of CRM software is designed for managing and tracking marketing campaigns. It typically features mail marketing, product suggestions, campaign tracking, and customer segmentation components.
Sales Force Automation CRM
This type of CRM software is designed to automate sales tasks and manage the sales process. It typically features lead tracking, sales forecasting, contact management, and inventory control components.
Customer Service and Support CRM
This type of CRM software is designed to manage customer service interactions and streamline customer support processes. It typically features ticketing systems, knowledge bases, live chats, self-service portals, and call center support components.
Geographic CRM (or Location-based CRM)
This type of CRM software integrates geographical data into CRM processes to facilitate route planning for sales calls and analyzing sales by region. It typically features geographic data visualization, location-based marketing, and sales territory management components.
Small Business CRM
This type of CRM software is designed for businesses that may not have a dedicated IT team. It typically features sales, marketing, and customer service components that are user-friendly and have a low learning curve.
Top CRM Software
To manage sales and customer interactions in one place, consider using one of the market’s top-rated CRM tools below:
CRM vs. CXM/CEM
Customer relationship management (CRM) and customer experience management (CXM or CEM) are sometimes used as synonyms because they both focus on creating and maintaining strong customer relationships.
Historically, however, CRM and CXM have been two distinct concepts whose success is measured quite differently.
|Scope||Primarily concerned with customer data management and data analytics for touchpoints that directly or indirectly involve the customer.||Addresses the broader perception of the customer journey, covering every interaction across various customer channels and internal departments.|
|Purpose||Enhance business relationships, streamline workflows, and increase profitability by understanding and serving customer needs better.||Improve customer loyalty and advocacy by delivering exceptional experiences at all customer touchpoints.|
|Tools & Processes||CRM software suites help businesses track and manage customer information, sales leads, and interactions with call centers and customer service chatbots.||Uses a combination of analytics, feedback systems, and other tools to gauge and improve the overall customer experience.|
|Measurement||Usually measured in terms of quantitative metrics like sales conversions, leads generated, or issues resolved.||More qualitative and can be measured through metrics like Net Promoter Score (NPS), Customer Satisfaction (CSAT) scores, and Customer Effort Score (CES).|
In today’s business environments, however, the distinction between CRM and CEM/CXM is becoming more blurred, especially in companies that use and integrate both strategies to build deeper and more meaningful relationships with their customers.
In the future, it’s highly possible that CRM initiatives will focus on the “management” aspect of customer data, while CEM/CXM initiatives will focus on the “experience” aspect of customer interactions.
When businesses merge the principles of customer relationship management and customer experience management, they’re better positioned to approach customer relations in a holistic manner.