Customer Relationship Management (CRM) Basics & Top Tools




Updated 3/13/2024

Understand what CRM is, its importance, and how to effectively implement it in your business. Learn about various types of CRM systems.

crm featured image - network of customer icons

CRM is a strategy and technology for managing your company’s relationships and interactions with current and potential customers. The goal is to improve business relationships to grow your business. A CRM system helps companies stay connected to customers, streamline processes, and improve profitability. This guide covers the basics.

What is CRM?

Customer Relationship Management (CRM) is a business strategy and technology for improving profitability, revenue, and customer satisfaction.

When people talk about CRM, they refer to the following:

  1. CRM as a Strategy: Involves the business’s approach to managing customer relationships, focusing on customer retention and driving sales growth.
  2. CRM as a Process: Involves the company’s operations in managing its interactions with customers, often leveraging data analysis about customers’ history to improve business relationships, specifically focusing on customer retention and driving sales growth.
  3. CRM as a Technology: Refers to a system that helps with contact management, sales management, productivity, and more. CRM tools can manage customer relationships across the entire customer lifecycle, spanning marketing, sales, digital commerce, and customer service interactions.

Importance of CRM

Here are some of the top benefits of CRM efforts:

  1. Better Customer Service: Having all customer information in one place helps businesses to understand their needs and address their issues promptly and efficiently.
  2. Increased Customer Engagement: CRM aids in the segmentation of customers, thereby allowing businesses to engage with them more effectively through targeted marketing campaigns.
  3. Sales Growth: It helps identify upselling or cross-selling opportunities that can increase sales. Businesses can drive more sales and increase customer loyalty by improving customer service and engagement.
  4. Improved Analytical Data and Reporting: CRM systems can offer better reporting tools to generate insightful customer-related analytics. This data can be utilized to forecast sales, measure business performance, and strategize marketing campaigns more effectively.
  5. Automation of Everyday Tasks: Completing a sale involves several mundane tasks, which can be time-consuming. A CRM platform can take over these tasks, leaving the sales team free to focus on closing leads and resolving customer pain points.

The market is filled with numerous tools. Here are a few popular ones:

  1. Salesforce: Perhaps the best-known name in the CRM space. It offers various software solutions for small, midsize, and enterprise organizations, focusing on sales and support.
  2. HubSpot: Provides a full stack of software for marketing, sales, and customer service, with a completely free CRM at its core. It’s known for its user-friendly interface and accessibility.
  3. Zendesk: A versatile platform primarily known for its customer service and support solutions. Zendesk’s suite includes ticketing, live chat, an AI-powered knowledge base, and call center software, designed to enhance customer interactions.
  4. Zoho CRM: Zoho offers an extensive business software suite, including a CRM system. Zoho offers many features, like lead and contact management, sales pipeline management, and purchase control.

Types of CRM Systems

These systems can generally be categorized into three types:

  1. Operational: These systems streamline business processes for sales, marketing, and service automation. They are primarily designed to support customer-facing staff by providing them with the right information at the right time.
  2. Analytical: These systems focus on data analysis. They provide insights into customer preferences and behaviors, helping businesses make data-driven decisions. These are useful for managers and leaders who must keep a bird’s-eye view of the business.
  3. Collaborative: These systems facilitate sharing customer information among different teams in a business, such as sales, support, and marketing. They aim to improve customer service by ensuring that all teams in the organization have the same up-to-date information.

Implementing a CRM System

While implementing a system can significantly change any organization, its advantages far outweigh the effort needed. Here’s how you can do it:

  1. Define Your Goals: What do you want to achieve with your CRM system? This could be anything from improving customer service to increasing sales. Having clear objectives will help you make the most of your CRM system.
  2. Choose the Right CRM: Many systems are available in the market, each with different features and capabilities. Do your research and choose the one that best fits your business needs.
  3. Train Your Team: Your CRM system is only as good as those using it. Ensure everyone using the software understands how to do so effectively. This will ensure that you’re getting the most out of your investment.
  4. Keep it Updated: A CRM system is only as good as the data it holds. Make sure to update the system with accurate customer information regularly.
  5. Integrate With Other Systems: Your system should not stand alone. Instead, it should be integrated with your other systems, such as your marketing automation platform, website, customer service software, etc.

Bottom Line

Understanding and managing customers is key to the success of any business. CRM systems can help businesses know their customers better and serve them more effectively.

The choice of CRM system can depend on a business’s needs, size, and budget. CRM systems can provide businesses with a way to store and manage customer data, and track customer interactions. With CRMs, a business can automate sales, customer service, marketing, and reactions to customer behavior.


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