What is customer relationship management?

Customer relationship management is a strategic, technology-driven solution to manage and enhance customer relationships. It typically involves systematically collecting, organizing, and analyzing customer information to optimize interactions across various touch points. CRM systems consolidate customer data, enabling businesses to understand preferences, anticipate needs, and deliver personalized experiences. CRM empowers organizations to cultivate long-lasting customer loyalty and drive sustainable growth by fostering improved communication, streamlined processes, and targeted marketing efforts.

The impact of CRM on your business

CRM generally involves the entire customer experience life cycle, from reach, acquisition, and conversion to retention and loyalty. Some advantages of using CRM can include:

• enhanced customer relationships
• improved retention
• streamlined sales processes
• optimized marketing strategies
• increased productivity
• data-driven decision making
• efficient customer service
• cross- and upselling
• cost savings
• competitive edge
• improved customer experience (CX)
• more engagement
• higher satisfaction rates

Types of customer relationship management systems

You can interact with and study your customers in multiple ways, depending on the type of customer relationship management system you use:

• Operational: Businesses often use operational CRMs because this style streamlines operations, sales, marketing processes, and customer interactions all in one place. This allows you to nurture and understand your users at every touch point in the customer life cycle.
• Collaborative: This system can be optimal for larger companies or businesses with multiple locations. It can facilitate collaboration between sales teams, marketing, and customer support by making it easy to share customer data with different departments. It also aligns business activities and helps create a holistic approach to customer relationships.
• Analytical: Large to mid-size companies often leverage an analytical system to analyze significant data volumes. This CRM system focuses on improving user experience through customer data. It can take raw user behaviour data to show preferred channels, trends, touch points, sales forecasting, and other customer preferences.
• Strategic: This type aligns CRM initiatives with the overall business strategy, concentrating on long-term customer relationships, customer retention, and maximizing customer value over time.
• Campaign management: This system typically involves planning, executing, and tracking marketing campaigns to help businesses create targeted and effective marketing strategies to reach potential clients.
• Social: You can integrate social media data and interactions into a CRM system, allowing your business to engage with customers on social platforms, monitor feedback, and enhance overall customer experiences.
• Cloud-based: Hosted on cloud platforms, this CRM can provide businesses with accessibility, scalability, and flexibility while reducing the need for maintenance and extensive hardware.
• Mobile CRM: This application can give your sales and marketing teams real-time access to customer data on the go. This benefit can allow field representatives to update customer information instantly, ensuring that businesses consider the latest insights during decision making.

Customer relationship management examples

Below are some customer relationship management examples of how CRM systems can help you define your target audience and use technology:

Customer analytics

Tracking your customers’ behaviour, preferences, and trends can help you better understand and interact with them. Analyze data on-site, in-app, or through specific user groups like marketing or management to make more informed decisions. You can learn valuable data on friction causes, purchase intent, and upsell opportunities while enhancing your customer experience.

Lead management

CRM systems can help businesses track and manage leads throughout the sales process. They capture lead information, prioritize prospects, and automate follow-up activities to convert leads into customers.

Automated feedback collection

Customer feedback regarding their feelings and thoughts about your product can be invaluable. Eliminating guesswork and letting the data show how you can make improvements can enhance the customer experience. You can implement surveys like net promoter score (NPS) or customer satisfaction (CSAT) and collect quantitative and qualitative feedback to extract actionable insights.

Contact management

CRM solutions centralize customer data, providing a snapshot of your contacts. They store information such as communication history, preferences, and transactions, making personalized interactions and relationship building easier.

Data-driven decisions

You can drive business growth and build strong customer relationships with data-driven decisions. The CRM’s significant amount of data makes it easier to spot trends, predict user behaviour, and analyze performance.

Personalized customer experiences

Incorporate personalized customer experiences in your CRM processes—from targeted marketing and researching prospective customers to leverage personalized data, to nurturing them through the sales funnel and delivering tailored interactions to close the sale. Your customers will likely feel more seen, heard, and understood with personalized experiences, leading to a stronger bond between them and your company. Provide data access to all departments dealing directly with customers to avoid overly generalizing customer experiences. 

Pipeline management

CRM systems can help visualize the sales pipeline, enabling businesses to track deals at various stages. This feature aids in forecasting, identifying bottlenecks, and optimizing the sales cycle for improved efficiency.

Automated customer support

You can enhance your customer support with automation. Customers generally want fast, anytime service, and this technology can be there for them 24 hours a day, seven days a week. With fewer human agents, you can also reduce support costs. Many companies use chatbots as a popular customer service automation tool. Self-service resource centres also offer automated support via a collection of helpful resources that customers can access so they never feel stranded.

Sales automation

CRM automates sales tasks like data entry, e-mail tracking, and follow-up reminders. This tool can streamline the sales process, reduce manual effort, and help ensure sales teams focus on high-value activities.

Omnichannel service

Consider providing support on more than one channel. Using multiple channels for communication can show flexibility while improving your reach. Many businesses integrate web, e-mail, in-app, and social media as their main communication channels. What works for your company may depend on your target audience. You can run tests on various channels and analyze responses before deciding. Offering multichannel support doesn’t make it an omnichannel experience. You may need to integrate your platforms so your customers can seamlessly switch from one to another.

Customer service and support

CRM platforms with customer service capabilities can help manage support tickets, track customer inquiries, and streamline issue resolution. They can also enable teams to provide timely and personalized support.

Strong social media presence

Discussing customer relationship management examples isn’t complete without mentioning one of the most popular relationship building mediums—social media. More people than ever before are using social media throughout their daily routines. Businesses can use this medium to listen to what users say about your brand, connect with customers, deliver customer support and product updates, and help them find suitable products. Social media can generate free word-of-mouth marketing, create customer loyalty, and improve brand perception.

AI-powered recommendations

An e-commerce platform using AI algorithms within CRM can suggest products based on customer preferences, increasing the likelihood of successful upsells or cross-sells. When consumers add an item to their cart or complete a purchase, the system can intelligently recommend complementary products or upgraded versions, increasing the chances of additional sales and maximizing the customer’s overall value. These systems can also adjust recommendations in real time based on customer interactions. For example, if a customer searches a particular category or spends time viewing specific products, AI can quickly adapt and suggest related items, providing a more engaging and relevant shopping experience.

Marketing automation

CRM solutions can integrate with marketing automation tools to execute targeted campaigns, nurture leads, automate surveys for specific user segments, and track campaign performance. This can help ensure coordinated efforts between marketing and sales teams.

Workflow automation

CRM systems automate repetitive tasks and processes, reducing manual effort and minimizing errors. Workflow automation can help your teams follow standardized procedures and focus on strategic activities.

Communication tracking

A customer relationship management system can log and track all customer interactions, including e-mails, calls, and meetings. This feature can give your approved departments a complete communication history, enhancing collaboration and understanding customer needs.

Integration with third-party apps

You can avoid data silos by integrating your CRM platform with other business applications, such as e-mail, calendars, and project management tools. This seamless integration can enhance productivity and efficiency by centralizing information.