What is CRM (Customer Relationship Management)?

Let's define CRM

Customer relationship management (CRM) is a technology for managing all of your company’s interactions with current and potential customers. The goal is simple: improve relationships to grow your business. CRM technology helps companies stay connected to customers, streamline processes, and improve profitability.

When people talk about CRM, they’re usually referring to a CRM system: software that helps track each interaction you have with a prospect or customer. That can include sales calls, customer service interactions, marketing emails, and more.

CRM tools can unify customer and company data from many sources and even use AI (artificial intelligence) to help better manage relationships across the entire customer lifecycle, spanning departments like marketing, sales, digital commerce, and customer service interactions.

That’s the CRM definition. So why is CRM important, and who can benefit? Let’s take a look at:

Who is CRM for?
Why is a CRM system important for your business?
What are the benefits of CRM?
What does a CRM system do?
How much does a CRM cost?

Who is CRM for?

CRM software is for companies and industries of all sizes. It benefits large enterprises that need to easily track customer activity in one place and share it across departments, small businesses that often need to do more with less, and startups looking to be nimble and efficient. No matter your industry, or even if you’re a non-profit, if you communicate with customers — and your employees rely on information about those customers — CRM tools can help.

Customer relationship management software can benefit virtually any department at your company, from sales to service, to IT, to marketing, and more. Whether you want to start big or start small, it's easier to get started than you might think.

Why is a CRM system important for your business?

The Salesforce Customer 360 for Sales, Service and Marketing

Doing business has become complicated. The average organization uses over 1,000 different applications — but less than 30% of these apps are integrated.

To stay ahead, your company needs to be centered around your customers and enabled by the right technology. But getting up-to-date, reliable, and actionable information can be tricky. How do you translate the many streams of data coming in from sales, customer service, marketing, and social media into useful business information?

With a CRM solution, of course. Here are just a few reasons a CRM is important for your business.

A single source of truth

Customer relationship management software can give you a clear, unified customer profile — a single, simple, secure, and customizable dashboard with a customer’s purchase history, order status, outstanding customer service issues, and more. This information can be invaluable, especially since 70% of customers expect every representative they contact to know their purchase and issue history.

Whether they’ve previously reached out via phone, chat, email, or social media, a single source of truth ensures everyone at your company can provide the expected level of service.

Cost savings

Having a single source of truth doesn’t just benefit customers. It keeps companies organized and focused on revenue-driving activities. Sales teams generate a flood of data while talking to prospects, meeting customers, and collecting valuable information.

If all that information gets stored in handwritten notes, laptops, or inside the heads of your salespeople, there can be serious cost implications. Details can get lost, action items aren’t followed up on promptly, and customers get prioritized based on guesswork rather than data. And if someone leaves the company, unless their contacts and notes are saved in a CRM, that information — and business — may disappear along with them.

A CRM means less administrative work… and more time to focus on driving sales.

Connecting all your teams

A CRM brings your teams together, sharing information that makes everyone’s job easier.

For example, marketers can use CRM tools to manage campaigns and lead customer journeys with a data-driven approach. CRM software provides visibility into every opportunity or lead, showing you a clear path from inquiries to sales. Then, commerce teams can serve up personalized offers on your website, while customer service already knows a customer's history if they reach out with questions.

Increasing productivity with AI

Some of the biggest gains can come from combining CRM with the power of AI. Doing so enables you to quickly pull together everything you know about a customer, which can be used to personalize every interaction. Having this level of knowledge makes every employee even smarter and more productive. It equips them with insights to make more accurate predictions around forecasts like quarterly sales targets, ecommerce sales, or the best time to send a marketing email.

Generative AI can help speed up tasks for teams across your business, too. Labor-intensive tasks like drafting sales emails, crafting marketing messages, and writing or localizing product descriptions can now be done in a matter of seconds.

What are the benefits of CRM?

Here’s how a CRM system can help your business today

There are many benefits of using CRM software — especially when your business combines CRM with AI and data you can trust. Here are just a few of them:

1. Connect Your Business Silos.

The ability to easily share data across your teams is a huge benefit to both your customers and your business. A CRM provides everyone at your company with a simple, customizable user interface with real-time updates they can use to serve customers. So when a customer calls in with a question, the service agent can see their entire history, past marketing offers, and previous purchases. The CRM can even offer up suggestions for new products the customer may like, based on trends and insights uncovered by AI. A CRM with messaging capabilities that incorporates your customer data makes it even easier to communicate across your teams, with the data you need to collaborate right at your fingertips.

2. Make Improvements To Your Bottom Line.

Introducing a CRM platform has been shown to produce real results across a business. It helps your employees save time, work more efficiently, unlock opportunities, and serve customers better. Using Salesforce CRM, global customers across all business sizes have a proven track record of success, including:

Sales

Sales revenue

+30%

Win rate

+30%

Faster deal closure

+30%

Marketing

Increase in ROI

+32%

Customer lifetime value

+31%

B2B lead volume

+34%

Customer Service

Customer retention

+32%

Customer satisfaction

+32%

Faster case resolution

+21%

Digital Commerce

Online Revenue

+28%

Faster time to execute new strategies

+29%

Digital conversion rates

+19%

IT and Technology

Decrease in IT costs

+22%

Faster deployment

+30%

Faster automation of business processes

+30%

Source: FY2024 Salesforce Customer Success Metrics Global Highlights. Data is aggregated from 2,165 customers across 10 countries.

Customer management solutions can speed up and improve how you locate, win, and keep your customers happy.

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3. Increase customer lifetime value.

By understanding your customers better, cross-selling and upselling opportunities become clear — giving you the chance to win new business from your existing accounts and to build lasting, more profitable relationships. With more visibility, you can keep your customers happy with better service. Happy customers become repeat customers, and repeat customers spend more.

4. Offer Better Customer Support.

Today's customers expect fast, personalized support at any time of day or night. A CRM system can help you provide the high-quality service that customers are looking for. Your agents can quickly access a customer’s record of all past interactions so they can provide quick, informed answers and service.

5. Improve Products And Services.

A good CRM system will gather information from a large variety of sources across your business and beyond. So in addition to providing information about individual customers, it can serve as a listening engine. Using AI can give you unprecedented insights into how people feel and what they are saying about your organization. This helps you improve your offerings, spot problems early, and identify gaps.

6. Accelerate work with automation.

CRM software helps employees get more done, faster. With capabilities like Salesforce Flow Orchestration, you can automate complex, multi-user processes into simple and streamlined workflows. Plus, fully integrated productivity platforms such as Slack provide a single place where employees can collaborate right in the flow of work and automate processes. And now with AI, the best CRM software can automatically generate workflows using conversational intelligence to create even better experiences.

7. Use AI to identify trends and efficiencies.

As seen from these previous examples, having AI built in to your CRM can help your business grow. It can make your employees more efficient, serve your customers better, and find new opportunities you may not see on your own. Generative AI can even write personalized follow-up emails for your sales team or knowledge articles to share with support teams based on customer interactions.

Finding, winning, and keeping customers to grow your business starts with a good Customer Relationship Management (CRM) application. Find out everything you need to know to get started with CRM by downloading Your Complete CRM Handbook.

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What does a CRM system do?

CRM lets you store customer and prospect contact information, identify sales opportunities, record service issues, and manage marketing campaigns, all in one central location that’s available to stakeholders at your company. It does this by organizing customer and prospect information in a secure, easy-to-use digital record with information like a contact‌’s email, telephone, social media handle, all previous interactions with your company, and more.

CRM helps you find new customers, win their business, and keep them happy and can use automation to help you collect even more information faster, like news about your accounts so that everyone stays up to date.

Key features of a CRM

Customer relationship management software provides businesses with tools that help them communicate better — both internally, and with customers. Here’s how:

Flexibility, security, and lower costs with a cloud CRM.

Unlike the early days, today’s CRM software lives in the cloud, giving you the ability to safely save and access all of your customer data from anywhere at any time. That means every employee has the same information in real-time, and can make updates wherever they are.

Shifting to the cloud also means that a CRM system is easy to implement. There’s no hardware, which significantly reduces costs. Installation and ongoing management is an easy lift for IT teams, since there are no frustrating version control issues or updates to schedule. And, with cloud-based CRM, you only pay for the number of seats you use and features you need. As your business grows, you can add more of both, enabling your CRM to scale along with your plans.

Moving to the cloud has changed CRM in countless ways. Now anyone can work from anywhere on any device, boosting collaboration and bringing down costs. Plus, it offers enhanced security, so your customer and company data is always safe.

Unified view of the customer.

With a consolidated view of every prospect and customer, CRM software can manage day-to-day customer activities and interactions. For marketing, this means engaging your prospects with the right message, at the right time, through targeted digital marketing campaigns and journeys. Sales reps can work faster and smarter with a clear view of their pipeline and accomplish more accurate forecasting.

Commerce teams can quickly launch and scale ecommerce — from online orders to curbside pickup — for their consumer shoppers (B2C commerce) and business buyers (B2B commerce). And customer service agents can respond to customer needs on any channel — from the office, at home, or in the field.

Connects with your other apps.

As we mentioned, the average company uses over 1,000 apps — most of which can’t talk with each other. A CRM platform can connect with other business apps that help you to develop customer relationships. CRM solutions integrate with your favorite business tools, such as document signing, accounting and billing, and surveys, so that information flows both ways to give you a true 360-degree view of your customer.

Trusted AI is built-in.

The latest CRM systems have built-in intelligence and trusted AI. They use your customer data to create customizable, predictive, and generative AI experiences that automate administrative tasks like data entry and lead or service case routing. Automatically generated insights or service call recaps help you understand your customers better, even predicting how they will feel and act so that you can prepare the right outreach. AI can even help you to find opportunities that may be hidden in your business data.

How much does a CRM cost?

There are many ways that customer relationship management software can make a big impact on your business. But that doesn’t mean the cost has to be big. CRM products and services are made for businesses of all sizes and to meet needs across all areas of a company. Whether you’re a small business or a large enterprise, it’s easy to get started.

Have a look at the Salesforce pricing page to see an overview of CRM costs based on the size of your business and the products that are right for your needs.