What is Customer Relationship Management (CRM)

CRM or Customer Relationship Management is the process of applying strategies, technologies, and practices to manage customer relationships throughout the customer cycle. The goal is to improve customer relationships by analyzing customer interactions, enhancing customer experiences, and achieving customer satisfaction.

Building and managing customer relationships is key to any business. Happy customers are likely to generate long-term business, resulting in increased revenue. Their feedback is crucial for creating solutions free of ambiguity. Additionally, customer insights help in understanding customer behaviors and preferences, creating customer personas, and building tailored solutions. So, how can you preserve customer relationships?

Many factors impact customer relationships – understanding your customers, ensuring effective communication, delivering the right content, providing support, collecting feedback, etc. And to do all this, you need a streamlined process, which is where CRM software comes into the picture.

What is CRM software?

CRM software is a technology-based solution that helps businesses like yours to build and manage customer relationships. It acts as a centralized platform or an all-in-one solution that helps store and manage customer-related information, improve customer interaction, and build overall better customer relationships.

A CRM system includes several features for different departments in a business, such as Marketing, Sales, and Support. Lead and contact management, sales process management, marketing automation, project management, and many others that enable it to serve as a single solution to multiple business facets. Thus, all the processes within a company are optimized through a single system.

History of CRM

The history of CRM dates back to the times when businesses used pen and paper and Rolodexes to record customer information. The advent of technology soon transformed these manual record-keeping solutions into sophisticated software systems.

1960s-1980s: Businesses used pen and paper, and some evolved ones utilized rolodexes to maintain client information. However, this was not a scalable solution for businesses with an increasing customer base.

1980s: In the early 1980s, most businesses switched to databases on standalone computer systems while most continued to use Rolodexes.

1990s: Sales Force Automation (SFA) was first introduced as a software solution, a significant advancement to automate and streamline sales processes.

Mid-late 1990s: The term CRM came into existence, and businesses started installing CRM software on computers. Software as a Service (SaaS) was introduced, and CRM solutions started moving to the Cloud. Also, Siebel introduced the first mobile CRM.

Early 2000s: Businesses started adopting CRMs and transitioned to web-based platforms. Slowly, customer relationship management expanded to accommodate marketing and customer service solutions.

Mid 2000s: Social CRMs became a thing, where social media was incorporated into CRM systems to analyze and engage customers through social platforms.

Late 2000s-2010s: Cloud-based CRMs became more common than ever. The rise in smartphone usage gave rise to the popularity of mobile CRMs that enabled customer relationship management on the go.

2010s-present: Advanced insights and analytics powered by Artificial Intelligence (AI) are creating more refined CRM systems that enable predictive analysis and enhanced personalization.

The traditional scope of CRM: Sales, Marketing, and Support

From the 1990s to the 2000s, CRM systems were used primarily by the marketing, sales, and support teams. Each of these areas of business plays a significant role in building and managing customer relationships. Let’s look at the scope of CRM in each of them.

Marketing

Below are some ways CRMs helped marketing teams when they were introduced:

Campaign management
- - Planning, execution, and tracking of marketing campaigns, both physical (trade shows, events, etc.) and digital (email marketing)
  - Customer segmentation based on interests, behavior, preferences, demographics, etc., to ensure that campaigns are well-targeted
Customer segmentation
- - Separating customers into segments based on the factors above to curate more personalized marketing strategies.
  - Increasing the effectiveness of campaigns, resulting in better responses from leads and better business outcomes
Lead nurturing
- - Creating marketing lists, creating and delivering targeted email campaigns, tracking email responses, and tracking engagement metrics

Analytics

- Utilizing essential marketing metrics to gauge marketing efforts and make data-driven decisions

Sales

Top sales features included the following:

Lead management
- - Storing and managing lead information in a centralized system, tracking lead interactions, nurturing leads
Opportunity tracking
- - Creating customer and lead profiles and maintaining communication history
  - Visualizing and managing sales pipelines
  - Setting milestones and tracking the progress of sales opportunities
Sales automation
- - Automating repetitive sales tasks such as assigning leads, scheduling emails and meetings, assigning and managing tasks
  - Reducing manual workload to promote focus on more important sales-related responsibilities
Analytics and forecasting
- Analyzing sales data to forecast future trends in sales
- Using historical data to set future goals and expectations

Customer Support

Customer service management

- - Handling customer queries, complaints, and requests
  - Tracking the progress of tickets to expedite resolution

Knowledge base

- - Creating and managing a knowledge base consisting of essential information
  - Enabling customer teams to utilize and instantly share information to resolve queries quickly

Customer feedback

- - Collecting customer feedback through surveys
  - Using customer feedback to improve products and services

Data centralization
- Centralizing customer information such as contact information, purchase history, and interactions (phone calls, emails, messages, etc.)
- Storing communication details to enable seamless transitions within the team

These three functions were the pillars of traditional CRM systems, enabling businesses to store, manage, and process customer information from a single, centralized point, eliminating ambiguities. However, people and technology had other plans… plan to evolve and better.

The expanding scope of CRM

As customer expectations evolved and business needs increased, the scope of customer relationship management expanded significantly beyond just marketing, sales, and support. Customer relationships today need more than just the traditional modules, and CRMs have evolved to encompass a broader range of tools that assist in the overall business process and uphold the vision for an all-in-one CRM. Let’s look at how CRMs have accommodated changing business needs.

Mobile CRM

The foremost need for businesses that serve a technologically advanced audience is a mobile CRM – one you can take anywhere and use anytime. As mobile devices started booming, the need for a mobile CRM increased in the late 1990s to 2000s. Therefore, mobile CRM came into being, enabling businesses to manage customer relationships through a more agile and responsive system, beyond marketing, sales, and support.

Project management

CRMs of today include project planning, task assignment, progress tracking, task timers, deadlines, dependencies, milestones, scheduling, and several other features. All these not only offer a comprehensive project view but also enable timely completion and delivery. Moreover, CRMs enable better collaboration within project teams through features that allow them to view project history – team members can see the discussions that happened, decisions that were made, and documents that were shared, all under one umbrella.

Document management

A sales order that needs review, a marketing budget that needs approval, an invoice that needs clearing, and so many more documents are involved in converting prospects into customers or, in broader terms, running a business. Document management is a core part of customer relationship management because it serves as a centralized space for storing, accessing, and managing all necessary documents. Also, by setting up appropriate permissions and control mechanisms, teams can ensure that information is secure.

Improved analytics

Advanced reporting tools within a CRM have been providing in-depth insights into various sectors of a business. Whether it is sales and marketing or project management and customer service, CRM analytics has enabled data-driven decision-making. What’s even better is the ability of predictive analysis that helps teams anticipate events, making it easier to prepare for the future.

Integrations

Technological advancements obviously led to the invention of new tools and platforms that simplified various tasks. Whether it was a social media app or accounting software, businesses started leveraging them for enhanced performance. Therefore, third-party integrations became an inevitable part of CRM. Today’s CRM systems allow integration with tools for email, phone calls, calendars, marketing, finance, etc., eliminating the need to switch between platforms frequently.

Social media

Further to the previous point about integrations, social media integration is now a must-have for businesses. The incomparable popularity of social media has demanded that CRM systems allow social media platforms to be accessed and managed from within a CRM. This allows businesses to view the engagement on their social platforms and interact with their audience right from the CRM interface.

Customer satisfaction

By offering a 360-degree customer view, CRM systems enable enhanced customer satisfaction and promote personalization. Multi-channel customer service allows teams to interact with customers through phone calls, emails, chat, etc. Besides, automation has simplified many mundane tasks, and predictive analysis has enabled customer service reps to anticipate issues and prepare a resolution in advance. These advancements combined are making the customer service industry uphold its image, comply with policies, meet SLAs, and deliver an overall positive customer rating. As a result, customer retention is boosted, and businesses are able to gain loyal customers that stay in the long run.

Artificial Intelligence

In a world where almost everything is AI-powered, CRM systems cannot be left behind. AI has established a foothold in every aspect of customer relationship management. GenAI, Predictive analysis, forecasting, and data-based recommendations have all together made customer satisfaction possible. From improving sales strategies to refining customer interactions, CRM systems have enabled the impossible for businesses when combined with AI. More about it later.

Comparison: Business with and without a CRM strategy

Let’s do a comparison to understand the impacts of using a CRM strategy. Assume that Business A uses a CRM platform and Business B doesn’t.

Business A: With a CRM strategy

Let’s assume A is an e-commerce business with a CRM integration on its website. They can use the visitor data collected by the CRM in the following ways:

Organized data – CRM centralizes data, enabling business A to view, access, manage, and analyze it from a single place.
Customer acquisition – Business A performs customer segmentation based on behavior, preferences, and other factors. They then create targeted campaigns for each customer segment, resulting in better conversions. They also track the entire customer journey and use the data collected to enhance their marketing strategy.
Personalization – By collecting customer data and analyzing the customer profiles, Business A is able to have personalized interactions and make personalized offers, again resulting in increased conversions.
Customer retention – Business A becomes aware of customer preferences, does detailed data analysis, and improves personalization efforts, thus creating tailored retention strategies.
Sales optimization – The overall benefit of implementing a CRM strategy is that sales are positively affected. Through a centralized system that eliminates data duplication, performs detailed analysis, promotes transparency, and enables data organization, Business A’s sales team can create a more informed conversion strategy.
Customer service – With access to centralized data that shows previous issues, conversations, resolutions, etc., they can come up with solutions beforehand.
Cross-selling and upselling – With the help of complete customer history, predictive analysis, and historical data, Business A can easily identify cross-selling and upselling opportunities.
Data security – CRM systems ensure data security through their unique permission-based and control-oriented features, saving businesses from potential legal issues.

Business B: Without a CRM strategy

Apart from risking valuable sales opportunities, efficient marketing, high-quality customer service, and security, Business B could also miss out on the following benefits by not implementing a CRM strategy:

Incomplete customer insights – CRM systems are capable of collecting raw customer data and transforming them into valuable insights, such as customer preferences, behavior, interests, and purchasing patterns. Business B can miss out on effective customer relationship management without these details.
Hindered scaling – Running a business is a tedious process, and as Business B grows, it becomes more challenging to maintain customer relationships. Scaling becomes complex without a streamlined process such as one that CRMs enable.
No automation – Automation features in CRM systems can help streamline a lot of everyday tasks. Without automation, Business B might have to carry out mundane tasks manually, which can be time-consuming and sometimes futile.

This comparison shows that Business B runs a relatively inefficient process than Business A when it comes to customer relationship management.

The right time to invest in a CRM system: 5 signs

From day 1. Yes, investing in CRM helps you streamline your business process right from the start so you can avoid potential hassles in customer relationship management. You may start using a CRM with the conventional modules such as marketing, sales, and support and outstretch its usage as needed.

However, if you still want signs to invest in a CRM, here is what you need to look out for:

Record keeping – If your teams find it difficult to maintain customer records, essential documents, etc., it’s time to centralize data through a CRM platform.
Communication gaps – Team members often find it difficult to transfer information about a sales opportunity or a customer ticket among themselves. Avoid this communication gap by using a CRM system.
Cluttered sales process – If your sales team is failing to keep track of sales opportunities, it is a sign that you need to streamline your sales process, and CRM investment is a must.
Scaling – If your customer base is continuously growing, you may likely fail to give each customer your 100%. Therefore, use a CRM system to store and analyze customer data, provide personalized solutions, and improve retention.
Budget – If your business has a budget to onboard a high-end CRM, then so be it. However, if you’re tight on budget, it is okay to start with a freemium service or look for budget options.

Benefits of CRM software: Single source of truth

Centralized database of leads and customers

CRMs act as a single source of lead and customer information and let you maintain a unique record, reducing inconsistencies and duplication. This enables cross-team members to access and share data from centralized records instead of digging for information from different sources. Furthermore, it helps you organize data in a way that is easily understood. You can even ensure that it is secure by preventing unauthorized access.

Accurate reporting through dashboards

Businesses collect data from various sources such as social media, websites, Google Analytics, and other business software. CRMs not only store this data but also organize it in the form of simplified reports that you can use to back your decisions. Whether it is marketing, sales, or project management, a CRM system can give you customized reports to support decision-making. Additionally, you can schedule these reports to have regular access to essential data.

Data visualization for more clarity

Let’s do a little comparison here. Imagine you are using a spreadsheet to store lead data. You may need to look at the spreadsheet vertically and horizontally to interpret it and make a conclusion. Now imagine a colorful image that tells you how many deals have been won, lost, and are currently in the pipeline. Each item is represented with a different color, making it easy to differentiate and understand. This is the power of CRM software. They go beyond just storing data and simplify its interpretation through visual reports.

Sales forecasting

A CRM system helps you to plan and forecast sales by using historical reports. With the sales forecasting feature, you can strategically allocate resources and set realistic targets based on sales reps’ deal closure history and other relevant factors. You can gauge the overall performance of the sales team against targets. Moreover, sales forecasting helps you with budgeting and financing so that other expenses can be managed easily.

Personalized outreach for better conversions

Marketing teams are continuously involved in analyzing data and scraping out lead information to increase engagement and conversions. Through a CRM, you can know your leads and customers better, build segmented marketing lists based on behavior, interest, etc., and deliver more targeted campaigns. For example, if someone viewed multiple Malaysia holiday packages on your website, you can send them email campaigns with custom Malaysia packages. This personalization increases the chances of conversion and boosts the retention rate.

Single source of communication

Customer queries may come from more than one channel. A CRM platform can help you manage all communication channels from a single place. Phone calls, chats, and email – CRM software facilitates all these through third-party integrations or built-in systems to manage tickets. Additionally, it records and links a customer’s communication history to its contact or lead record so that future retrieval becomes easy.

Improved efficiency with automation

Almost everything can be automated on customer relationship management software. Automate lead assignment, follow-up emails, and other mundane tasks. Schedule reports and emails for specific dates and times. This automation simplifies your job and saves time for other crucial tasks.

Security compliance

CRM systems help with data security and compliance in several ways. They support data encryption methods and consent management. They help in controlling access based on organizational roles and hierarchies. Additionally, activities on a record, such as a deal, contact, or task, are recorded to provide a history of actions taken on it. Tracking user activity on the CRM is another mechanism supported by most CRM platforms to ensure that users are working within their accessible areas and responsibilities.

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Cloud-based vs. Open-source CRM solutions

Factor	Cloud-Based CRM	Open-Source CRM
Availability	Accessible via the internet from anywhere.	Requires installation and maintenance on-premises or on a private server.
Implementation time	Generally quicker due to hosted infrastructure.	Can take longer, especially for complex setups and customizations.
Customization	Limited compared to some open-source alternatives.	Highly customizable, allowing businesses to tailor the CRM to specific needs.
Maintenance and updates	Handled by the service provider.	Requires internal IT resources for updates and maintenance.
Cost structure	Typically subscription-based, monthly, or annually.	Upfront costs for hardware, implementation, and ongoing maintenance.
Scalability	Easily scalable by upgrading subscription plans.	Scalability depends on the IT infrastructure and resources available.
Integration with other systems	Generally supports integration with popular third-party applications.	Custom integration options, but may require more effort and resources.
Security	Rely on the security measures provided by the service provider.	Full control over security protocols, but requires vigilant management and updates.
Ease of use	Generally user-friendly with intuitive interfaces.	Can vary depending on the specific open-source CRM and its customization.
Community support	Limited community involvement compared to open-source projects.	Active community support and development, providing a wealth of resources and plugins.

10 steps to implement CRM platforms

Below are the simple steps you need to do to implement customer relationship management software successfully.

Assessing your needs: Identify specific requirements of different departments in your organization. Understand the features they are looking for and the functionalities they need. This includes identifying the integrations required and the scope of usage.
Understand your goals: Outline the objective and overall goals that each team is trying to achieve. Define a clear vision of buying and implementing CRM.
Establish a budget: There are subscription plans and freemium plans. After you are clear about your organization’s needs and the goals you want to fulfill, define the budget you would like to accommodate for buying and implementing CRM.
Create an implementation team: The implementation team must include a system administrator, sales manager, project manager, sales reps, marketing manager, and other essential roles. These members will help you implement CRM effectively.
Evaluate your options: Identify potential CRM options and evaluate them against your requirements and goals together with your team. During this step, it is important to consider scalability, customization, mobile accessibility, customization options, and security. Support from the CRM’s customer service during implementation is another essential requirement.
Create a change management plan: Doing this will help you combat any resistance from team members. Your change management plan must include a vision, essential training, documentation, and troubleshooting ideas to ensure a smooth transition.
Prepare data for migration: Assess the quality of existing data and plan for data migration. Cleanse and standardize data to ensure accuracy. Consider mapping data fields between your existing systems and the CRM.
Test CRM usage: Before introducing it to your team, test your new CRM software for its ease of use, reliability, data integrity, and security.
Go live: Deploy your CRM after successful testing. Introduce it to all your team members, provide support, and collect feedback.
Monitor and evaluate: Continuously monitor the performance of the CRM system and address any issues promptly. Check whether the CRM is meeting the defined objectives and make adjustments as needed.

Common challenges in CRM implementation and their solutions

Challenge	Solution
Employees may resist adopting a new system.	Creating a change management plan. Providing necessary training, support, and guidance to help them adapt to change quickly
Inaccurate and incomplete data during migration.	Conduct a data audit. Clean up and standardize data before migration. Consider migrating in phases for convenience.
Ensuring compliance with data protection and maintaining data security.	Implement robust security measures, such as encryption, access controls, and regular audits. Stay informed about data protection regulations and ensure the CRM adheres to these standards.
Difficulty integrating the CRM with other systems and applications.	Ensure that your new CRM supports integration with the current tools or software in use.
Lack of support from the higher management.	Clearly communicate the strategic benefits of using a CRM. Involve leadership in decision-making and implementation plans.
Time required to get accustomed.	Your team may need time to get used to the new system. The time between using it and efficiently utilizing it is critical and needs patience.
Not having the right skills for error-free implementation.	If your IT or implementation team impacts the ease of process. Ensure that the team possesses the right skills.
Choosing the wrong solution.	Ensure that you have evaluated your needs and goals precisely to choose the right CRM software that is customizable and also meets integration requirements.

Role of Artificial Intelligence(AI) in CRM

AI is the most prominent advancement in the CRM industry, and its impact on businesses predominantly spans marketing and sales. Apart from the automation of repetitive tasks, below are some trending use cases of AI in CRM.

Use cases

Need analysis & Lead Qualification: AI has optimized the lead qualification process through chatbots and email bots that help in lead qualification. Customers use these bots to input their requirements, and in turn, the bots help sales teams understand the precise needs and build a better sales pitch.
Sentiment analysis: By implementing AI’s sentiment analysis capabilities in the CRM, customer sentiments can be realized accurately. For instance, AI can help analyze emails and calls to assess the customer’s emotions or sentiments.
Sales forecasting: AI-powered CRMs can identify patterns in customer behavior and related sales details to provide accurate predictions about future sales. This ensures an optimized sales process.
Churn rate: For AI, historical patterns of customer behavior serve as inputs to predict and reduce churn rate.
Voice assistants: AI-powered CRMs have already started building voice assistants into the system that listen to voice commands to perform tasks. Other applications include generating chat transcripts, creating email responses, recording voice meetings, etc.

To conclude, Customer Relationship Management (CRM) software has evolved significantly from its historical roots to encompass a broader scope that goes beyond traditional sales, marketing, and support functions. As we look to the future, emerging trends in CRM point toward even more advanced functionalities and integrations, promising further innovation in customer engagement and business operations. Embracing these trends will be essential for staying competitive and meeting the evolving expectations of a dynamic market.