What is CRM?

Find out what CRM is, how to use it efficiently, and what the benefits and ROI of CRM are. Read on for everything you need to know about customer relationship management.

What is Customer Relationship Management (CRM)?

CRM stands for Customer Relationship Management. In its core, CRM describes the way a company builds and fosters connections (relationships) with potential and existing customers. CRM helps businesses improve their customers' experience, thereby increasing likelihood of (re-)purchase, customer lifetime value, and reducing their own business costs. In terms of technology, CRM describes the platform or system (technology) that a business uses to manage their relationships with customers, contacts, prospects, and as well as assigning tasks related to them internally.

Why It Matters: Why Do I Need a CRM?

Any business, no matter the industry, size, or geographic region, relies on new and repeat customers for their business to grow. In order to close deals with customers and gain repeat business, you need to ensure that your customers are happy – both with your product and/or service you’re offering, as well as with the overall customer service you provide (the “behind the scenes” things).

How well you manage your customer relationships defines customer satisfaction – which in turn determines your customer acquisition, retention, and business revenue growth. By optimizing the key processes surrounding the customer lifecycle, and providing more data and insights to customer-facing professionals, organizations can increase productivity and profits and drive higher top line sales in addition to increasing lifetime customer value.

Features and Benefits of CRMs

A CRM system will be your business’s centralized location for all your customer and sales data. Among other things, a CRM system can capture, record, track, monitor, and enhance all customer-related activities and information. Multiple teams can respond and engage from directly within the CRM system. Additionally, teams can address any customer issues or questions that arise and follow-up accordingly. In addition to comprehensive data management, a CRM system will help you align your sales, marketing, and customer support departments by providing easy, joint access to information and company-wide sharing options.

Here are three key benefits you can gain from a CRM:

  1. Automated Business Processes
    A CRM will allow you to minimize your manual tasks. By creating automated workflow rules and processes, as well as taking advantage of automated reporting functionalities, your sales team can achieve huge time-savings and increased sales productivity. As an example, a CRM system can automatically run status reports for you and email them to your sales manager.
    By automating time-consuming and tedious work processes into simpler, streamlined workflows, your sales reps’ time is being freed up to focus on what really matters: building relationships with your clients. In the end, your customers care about the quality of goods or services they receive, not how accurately their data appears in your system.


  2. Sales and Marketing Alignment
    Because lead quality is a top barrier to success in sales, it is imperative that your sales and marketing departments and efforts are aligned. The quality of MQLs that your marketing team passes over to sales will determine your sales team’s time-efficiency and sales productivity. Aligning your sales and marketing efforts and achieving better sales acceleration is one of the key benefits you will achieve from a CRM.
    Another benefit of using a CRM system is that it improves internal team collaboration through greater visibility across the organization.
    Remember, you’re likely not the only one in your company who needs to access relevant information about a given customer at a specific time. Take for instance, a sales rep who just logged a call with a customer, while his or her sales director is responding to an email from the customer’s support department at the same time. With a CRM, both can have instant access to the same information and accordingly address each issue separately.
    Another benefit of a CRM system is that your marketing teams can receive accurate and detailed, real-time feedback from sales on which of their campaigns were the most successful. This will ensure that future marketing spend will be more efficiently allocated and optimized to ensure an improved bottom line.

    Aligning your organization’s departments with your CRM will improve your sales cycles, lead quality, data accuracy, customer retention and overall customer satisfaction.


  3. Centralized Location for Customer Information
    One of the biggest objections to CRM adoption is that salespeople already have too many processes and systems in place. However, any good CRM system will enable seamless integration with other business applications and thereby enhance any existing processes.
    In addition, a CRM system needs to be flexible and customizable enough to make implementation quick and easy, yet offer room to modify processes within the system. In addition to providing comprehensive, functional data storage, a good CRM will function as a comprehensive business platform.
    Some of the key customer information pieces any great CRM will provide include:


    • Contact information (business/personal)
    • Company information (size, industry, geographic region, etc.)
    • Contact activity (website visits, calls, emails sent/opened/clicked, etc.)
    • Contact support issues, requests and cases
    • Status and resolutions of such issues (as responded to by your team or by the customer)
    • Service level agreements (SLA) and terms of the customer relationship (start/end date, deal size, renewal interest, etc.)
    • Order history and interest in future purchases, such as items on a “wish list,” for example
    • Tracking of open orders/shipments
    • Contact-specific information as agreed to by your team (discounts, event invitations, special partner-relations, etc.)
    • Relationship intelligence data and contact-specific or personal information that can strengthen the relationship (incl. social media activity and accounts, social media connections (business/personal), work history, past school connections, company or contact news, past or upcoming in-person meetings with key stakeholders in the company, etc.)

Challenges to CRM Success

Let’s be honest: People do not like change. Change is not in their nature and they don’t warm up easily to things they do not know, or know how to use. Additionally, many sales teams that have existing processes in place, don’t want to uproot their processes to start all over with a new or additional system.

However, a good CRM system will not add extra work, steps, processes, or labor to sales reps; on the contrary, any great CRM system will align and replace existing, non-efficient processes with quicker, more streamlined, revenue-accelerating applications. Implemented correctly, a CRM system will enhance and improve not only your sales team’s work, but the entire organization’s workflows and processes.


Yet, in order to achieve CRM adoption and success, here are the most common CRM objections and hurdles and how to overcome them:



Challenge Response/Solution
Financial Implications Start small: Per-user subscriptions are an easy way to navigate significant financial risks or burdens. After several department’s successes, scalability looks more promising and achievable.
Key here is also to look for cost transparency and maintenance cost with your CRM vendor. Doing an analysis of your current state and sales productivity time spent next to potential gains and productivity increases (which you can translate into opportunity and revenue growth) can give financial departments an easy overview of CRM gain versus cost.
CRM User Adoption Select a CRM system that lets you build role-specific interfaces that are easy to navigate and use from any device (look at your organization’s preference for cloud vs. on-premise deployment). This will give early users an intuitive and gratifying tool for cross-departmental customer information and result in easy, early wins. Use the early user adoption successes to scale the CRM system more broadly after that.
CRM Complexity Certain web services and standardized APIs make it easy to create custom integrations that are uniquely suited to your business needs. Decide on what kind and how much customization you prefer as you go along.
Choose a CRM that is flexible, open, and aligns to your specific business needs versus choosing a vendor that includes every single feature which you might not need and might overwhelm your users, as well as burden you financially.
Fear of Change / Current, Mediocre CRM System Perform an analysis of your current CRM system, its sales efficiency, scalability, customization possibilities, mobile enhancements, and advanced workflow capabilities. Compare that to your business goals and KPIs for your next sales cycle. If your current revenue state could be improved, consider the benefits of a quick-implementation, modern CRM versus sticking with your old CRM and status quo.

Your CRM Strategy and Building a Strategic CRM

In order to get the most out of your CRM, it’s wise to put together a specific plan for your CRM strategy. Your CRM strategy needs to include your business alignment, team building, change management, your customer engagement strategy, and user involvement.

Here’s an 8-step CRM blueprint that can help you put together your CRM strategy:

  1. Align your business goals:
    Ensure that you have mapped out your business’s high-priority objectives. Identify essential business processes that your CRM system will manage and problems that you are trying to solve. Ask yourself: “what do we want to do?”, “what are our priorities – short term vs. long-term?” and “what is our plan in executing on that agenda?”. Include any financial projections and accepted timeframe for implementation in this analysis.
  2. Engage and involve your teams:
    Start with your team engagement at the top, as leadership buy-in is critical for a successful CRM strategy. Selling the investment to leadership involves defining what success means in their terms, such as management and process efficiencies, improved customer lifetime value, deepened customer relations and better retention rates, and with that – increased revenue. It’s ideal to focus in on two or three clearly articulated business benefits and explain how a CRM can help with those.
    After that, it’s important to get everyone involved and informed, but it’s recommended to recruit a few CRM champions and have those lobby for you with key stakeholders and ‘naysayers’ within the company. CRM champions can also help you get broader visibility across different departments and assist with early adoption successes. The stronger you can build your early team buy-in, the more successful your CRM strategy will be.
  3. Plan your architecture & map out your business processes:
    In order to be effective, your CRM system must map closely to mission-critical business processes. Clearly define your business processes and compare those against the CRM solutions you’re evaluating. Identify and plan your design architecture, workflows, integrated business applications, preferred data sources and user interface. Also, consider existing code bases, extension frameworks, and customization needs for a new CRM. A good litmus test before selecting any CRM vendor is to see how many check marks are ticked off in a solution right out of the box vs. needing customization vs. not possible at all. These aspects will affect deployment options and costs, and will help you when you reach the point of your CRM implementation.
  4. Focus on customer engagement:
    CRM is, in the end, all about your customer engagement strategy. Proactive customer engagement includes both high-level strategic elements and technical, specific details regarding its execution.
    Successful CRM practitioners view their business through the customer’s eyes. Planning should include an agreed-upon definition of the optimal customer experience. A comprehensive customer journey map – developed from the customer’s perspective – will help you to identify gaps and opportunities to re-work existing processes and add new workflows.
    By mapping the customer journey in detail, the project team gains a rich understanding of customer needs, preferences, and behaviors at every stage. Next, align those preferences and activities with your customer-facing processes, which will help you to identify areas in need of improvement and ensure consistent handoffs of the customer record along the journey.
  5. Prioritize your opportunities:
    Work with department heads to discuss revenue and productivity opportunities at every stage. Once opportunities are flagged, study their ROI (return on investment) potential and compare them against each other. This will help you prioritize your CRM strategy in regards to opportunities. As an example, if accounting can receive payments faster by gaining access to sales data, you can designate deployment there as a high priority.
    Look for potential efficiencies beyond the core sales/service/marketing functions. Plan to leverage your CRM automation to ensure timely revenue flow and replace inefficient processes throughout the customer lifecycle.
  6. Align your business goals:
    Ensure that you have mapped out your business’s high-priority objectives. Identify essential business processes that your CRM system will manage and problems that you are trying to solve. Ask yourself: “what do we want to do?”, “what are our priorities – short term vs. long-term?” and “what is our plan in executing on that agenda?”. Include any financial projections and accepted timeframe for implementation in this analysis.
  7. Consider your users’ experience:
    If your employees won’t use your new CRM, all strategic efforts are pointless, so keeping your end-user experience in mind every step of the way will ensure better success. Discuss different departments’ users’ needs and align their feedback, insights, prompts and “wish lists” to your company goals. Users should get an intuitive interface, easy accessibility across all devices (mobile/home/office), that delivers the right data that is most relevant to their specific department, roles, and current customer interaction.
  8. Determine application integrations:
    Ask yourself which applications and data sources you need, or would like, to integrate. Consider which will empower users and maximize workflow efficiency the most. In addition to that, keep in mind data governance as part of your data integration strategy. Prepare a requirements list so that you can uncover any potential issues around how you manage customer information related to security, privacy, or compliance.
  9. Monitor, track, analyze, optimize, rinse and repeat:
    After a successful CRM implementation, it’s important to not simply step away and let it run on its own, without looking at its performance again. Consistent monitoring and tracking of your sales velocity, pipeline performance and opportunity management improvement will yield valuable insights into aspects of your CRM that have had positive business impacts, as well as those that should be modified further. Establish quarterly reviews with different departments and gather comprehensive feedback on usage and customer analytics. Checking in with your CRM vendor regularly on performance issues and relevant updates or add-ons is also essential in keeping your modern CRM performing effortlessly.
    Looking at what you have done in the past, analyzing it properly, and deciding how you can optimize it for the future will prove to be critical for your CRM strategy to be successful.

Success Metrics to Measure Your CRM

In order to maximize your return on investment (ROI) for your CRM implementation, it’s critical to measure the result of your CRM performance and impact on your teams, business operations and overall bottom line.
As you define the right success metrics for your CRM platform, you will want to look at its performance keeping in mind your desired optimal outcomes.

Here are several key success metrics to measure as you start to evaluate your CRM’s success:

CRM Success Metrics for Ideal Business Outcomes:

  • Pipeline visibility: Track whether the CRM system is giving sales teams a comprehensive view of customer or prospect activity to identify new opportunities.
  • Conversion rates: Track current conversion rates across all defined sales stages to establish baselines on which to benchmark success. Include sales, upsells, and cross-sells in tracking.
  • New business growth: Track new customer accounts or net new sales by customer.
  • Retention and profit per customer: The duration and value of customer relationships.
  • Sales performance: Get as granular as possible with your team’s performance, such as average sales cycle, conversion rate by sales rep, or activities across each stage of engagement.
  • SLA compliance: Manage performance and compliance with service level agreements with your customers.
  • Customer satisfaction: Set targets for customer satisfaction and measure against those.
  • Customer advocacy/influence: Track customer sentiment via direct feedback, social media, or metrics such as Net Promoter Score (NPS).
  • Attrition: Set targets relating to different causes of attrition to determine whether the CRM is delivering expected improvements.


CRM Success Metrics for Ideal Operational Performance:

  • Usage rate: A CRM system is only as good as its users. Set adoption and usage goals for each department.
  • Employee satisfaction: Target and track areas where employees are expected to experience improvements in their work, such as collaboration and depth of insight.
  • Lead quality: Set standards for lead qualification and opt-outs, and measure the quality of leads that pass to sales via automation.
  • Automated outreach: When you use CRM to prompt customers based on data signals, measure the performance of those campaigns.
  • Interaction intervals: Is the CRM helping you keep customer relationships fresh?
  • Speed of response: Are customer service representatives responding faster with better information?
  • Fulfillment: Measure whether the CRM is helping you complete post-sales operations faster.
  • Payments: Use the CRM to follow the customer journey to the end, and apply time-to-payment metrics.
  • TCO (Total Cost of Ownership): Set a budget for CRM implementation, maintenance, and growth, and measure against it. Target cost savings related to the CRM deployment and measure for improvements.


If you are including these key metrics for CRM success already when you are still in the evaluation phase of your CRM purchase – just before the actual buying process starts – they will help you determine the functionalities you will need in a CRM system in order to deliver positive top- and/or bottom-line results.