Customer relationships make or break most businesses. Earning the trust and loyalty of customers increases long-term revenues and helps businesses scale.
Conversely, firms that fail to establish strong customer relationships will likely lose sales and – ultimately – shut down.
With such high stakes, brands must carefully consider customer relationship management (CRM).
Most think of CRM as the technology businesses leverage to secure stronger relationships. However, there’s much more to it, as outlined below.
What Is Customer Relationship Management (CRM)?
Customer Relationship Management (CRM) refers to the strategies, processes, and technologies organizations use to manage, analyze, and improve customer interactions.
The goal is to enhance relationships with buyers, foster retention, and increase lifetime value while giving companies a holistic view of their target customers (and their needs).
Yet, when most people ask: “What is CRM?” they’re usually talking about CRM systems: the software businesses use to align and track customer interactions and actions.
Today’s CRM systems ensure businesses can store critical customer data – which includes everything from social media interactions to purchase histories and service outcomes – in the same place.
From this centralized hub, sales, marketing, customer service, and other departments get the insights they need to deliver better customer experiences, reduce turnover, and improve business outcomes.
How Does CRM Work?
Customer relationship management has come a long way since the early days of on-premise systems that acted like a digital Rolodex of contact details and information.
Today, effective CRM processes combine automation, cloud-based integrations, AI, and machine learning to support every customer-facing team.
On the simplest level, though, customer relationship management focuses on:
- Data Collection: Modern CRM systems capture information from all customer touchpoints – emails, phone calls, social media interactions, e-commerce browsing behavior, and more. For instance, the CRM logs each visit if a prospective buyer repeatedly searches for a particular product on your website. This data informs sales and marketing teams of the prospect’s interests.
- Data Centralization: Once collected, customer data is stored in a unified database, accessible to various departments, such as sales, marketing, customer service, finance, and even product development teams. This ensures everyone has access to the same information for creating customer profiles and service strategies.
- Automation: One of the most transformative elements of a CRM system is the capacity for automation. Simple but time-consuming tasks – like scheduling follow-up emails or categorizing leads by interest- can be put on auto-pilot. This reduces human error and frees up staff to focus on value-added interactions.
- Analytics and Reporting: CRMs equip businesses with dashboards and data visualizations that make sense of extensive customer information. They help spot a surge in demand for a particular product or evaluate the success of a new marketing campaign. These insights boost decision-making. Some CRMs also incorporate predictive analytics, forecasting trends that guide product launches or promotional offers.
Many modern CRM platforms also include various advanced features, such as project management tools, workforce optimization (WFO) integrations, and integrations with other software, such as Enterprise Resource Planning (ERP) and contact center systems.
Who Is Involved In Customer Relationship Management?
In the past, companies often assumed that CRMs were just for sales teams that needed help tracking leads and automating follow-up or qualification tasks.
However, customer relationship management is a multi-departmental process. For instance:
- Sales Teams: Use CRM solutions to track customer interactions, automate parts of the sales cycle, access data to create personalized pitches, and identify opportunities.
- Marketing Teams: Leverage CRM technologies to automate marketing tasks (like email or social media campaigns), create profiles for campaigns, and monitor marketing results.
- Customer Service Teams: Rely on CRM systems to automate contact center tasks (like answering FAQs with bots or creating knowledge base articles). They use CRMs to provide seamless, personalized support across channels.
- Commerce Teams: Enhance online shopping experiences with CRM-powered applications and bots that deliver personalized recommendations to customers.
- Product Teams: Use CRM data to identify opportunities to create new products, increase sales, or optimize the features of existing solutions based on customer feedback.
- HR Teams: Track CRM data to optimize resource allocation strategies, identify training opportunities for team members, and conduct performance reviews.
Who Needs Customer Relationship Management?
For today’s organizations, the question isn’t just “What is CRM?” But: “Do I actually need CRM solutions?”
The simple answer is that virtually every company, no matter its size or industry, can benefit from customer relationship management.
Here are some core signs that a company really needs a CRM strategy:
- Growing Complexity: If an SME (small or medium-sized enterprise) is transitioning from spreadsheet-based customer logs to handling hundreds of leads each month, a CRM might be the difference between chaos and clarity.
- Scalability: Enterprises that expand geographically often need a centralized system so remote teams stay aligned. CRM solutions can help bring your team together, eliminate data silos, and empower hybrid and remote teams with unified data.
- Increasing CX Demands: In an era where 79 percent of customers expect personalized interactions (according to a recent McKinsey report), businesses increasingly rely on CRMs to deliver fast-paced, efficient, and tailored support.
- Evolving Employee Experiences: CRM systems don’t just foster collaboration among teams. They improve the employee experience in various ways. With a unified ecosystem, teams waste less time searching for information. Plus, they have access to advanced AI and automation tools, cutting down on repetitive tasks.
- Growing Reporting Requirements: CRMs provide comprehensive reporting capabilities, offering insights into sales performance, customer behaviors, and overall business health – crucial for presentations to investors, board members, and other stakeholders.
The Key Benefits of CRM Solutions
Far too many businesses rely on an ever-growing stack of disconnected apps. The average large enterprise might use hundreds of digital tools, yet if they’re not integrated, vital information remains siloed, leading to miscommunication and missed opportunities.
A CRM strategy, system, and toolkit acts as the unifying force that brings everything together in an organization, delivering benefits like:
- Improved Organization: When all customer data is aligned in one place, companies get a clearer view of the business, their customers, and the existing opportunities. They can personalize interactions, improve efficiency, and make better data-driven decisions.
- Enhanced Personalization: Every department, from marketing to finance, can use CRM tools to view a customer’s preferences, purchasing histories, and feedback. They can then use this information to enhance interactions with personalized support and guidance.
- Smarter Decisions: CRM solutions help companies track their progress toward high-level goals and make more intelligent decisions. Some CRM tools even have AI solutions that can identify patterns and introduce teams to new opportunities.
- Boosted Customer Loyalty: Loyalty is about reliability, relevance, and delight. A CRM ensures that each touchpoint reflects the customer’s history and preferences, making them feel valued. By automating follow-ups or loyalty offers, brands keep customers engaged and less likely to wander to competitors.
- Simple Scalability: Ramping up operations without a central system can cause significant headaches. A CRM readies a business for growth by automating admin tasks, centralizing customer data, and aligning team efforts.
- Stronger Collaboration: A CRM erodes departmental walls. When sales, marketing, support, and product teams use the same hub, they can share insights instantly. For example, if the support team flags repeated feedback on a feature, marketing can highlight that improvement in the next campaign while product teams work on a permanent fix.
Beyond all the benefits above, CRM solutions may help businesses improve profitability and cut costs with intelligent automation.
After all, on a broader scale, the right CRM strategy ensures companies can take a sustainable approach to ongoing growth by prioritizing customer experiences and satisfaction rates.
The Top CRM Providers
There are countless global CRM system providers, from well-known market leaders like Salesforce and HubSpot to up-and-coming niche players. Some of the most prominent CRM providers include:
Salesforce
Salesforce is often credited with bringing cloud-based CRM solutions to the masses and still leads the space in terms of market share.
Today, its Customer 360 CRM apps cover sales, marketing, service, and commerce, with industry-specific offerings, too.
Salesforce is also leaning further into the AI space, embedding Einstein AI across its apps and releasing Agentforce for agentic AI development.
Finally, Salesforce offers a robust AppExchange marketplace, where companies can find thousands of apps, extensions, and integrations to optimize their CRM strategy.
Microsoft Dynamics 365
Microsoft Dynamics 365 stands out by seamlessly integrating with various Microsoft applications, such as Outlook, Teams, and Power BI.
Businesses already investing in Microsoft’s ecosystem can slot Dynamics 365 into their existing workflows without extensive disruption or complex set-up processes.
Microsoft’s CRM tools benefit from access to Copilot AI and autonomous agents that can handle a range of tasks for customer-facing teams.
Plus, Dynamics has modular apps for sales, marketing, and customer service. All these apps come together within a single ecosystem.
HubSpot CRM
HubSpot CRM gained rapid popularity as a marketing CRM. However, it’s now a fully-fledged CRM platform with a multi-hub strategy to rival the likes of Salesforce and Microsoft.
A critical differentiator is in its freemium model, which is highly scalable and attractive to smaller, agile businesses.
Indeed, the pricing model makes HubSpot particularly attractive to start-ups, small businesses, and those wanting to dip their toes into CRM without substantial upfront costs.
HubSpot is also one of the more user-friendly CRM solutions, with plenty of great resources for beginners built into the HubSpot ecosystem.
Zoho CRM
Zoho CRM is part of Zoho’s expansive suite of applications, which covers tools for everything from bookkeeping to human resources.
By integrating these various modules under one umbrella, Zoho appeals to businesses seeking a cohesive “one-stop shop.”
Zoho CRM combines intuitive contact management with automation and AI-driven insights, making it suitable for both niche ventures and large-scale enterprises.
Additionally, teams can manage projects, support tickets, sales pipelines, and email campaigns without leaving the Zoho environment.
Zoho Analytics (previously Zoho Reports) plugs directly into Zoho CRM too. This offers companies real-time dashboards that track everything from monthly deal closures to top-performing territories.
Oracle NetSuite
Oracle NetSuite distinguishes itself by fusing CRM functionality with enterprise resource planning (ERP).
In taking this more integrated approach, Oracle allows businesses to manage finances, inventory, and customer relationships within a single platform. That’s ideal for companies needing real-time visibility across front- and back-end operations.
NetSuite captures much of the entire customer journey, from first touch through payment, order fulfillment, and ongoing support. All these processes run on the same database, eliminating data silos.
For international enterprises, NetSuite’s support for various currencies and tax regulations provides a practical way to maintain compliance.
Final Thoughts on ‘What Is CRM?’
Customer relationship management is often the key to running a successful business in any industry.
It’s a framework for capturing and analyzing customer insights, building loyalty, and ultimately driving revenue.
CRM transforms fragmented interactions into meaningful, one-to-one relationships by centralizing data, automating menial tasks, and unifying teams around a shared view of each customer.
