Customer relationship management, more commonly shortened down to CRM, is the process of tracking, analysing and developing your company's relationships with its customers and prospects.
Usually, when you hear the term CRM, it refers to a CRM system, like HubSpot or Salesforce. These systems make the job of customer relationship management easier, by acting as a database for all your customer-related information - whether it's records of previous meetings, information on ongoing deals, or records of products that they have already purchased.
Even smaller companies produce huge amounts of useful data - every meeting, email, invoice and phone call between a customer and the company produces information that can hugely benefit the relationship. However, it's usually the case that this information is spread out all over the place - in email inboxes, Excel files, or simply in the memories of sales reps.
A lot of the time, this works fine - but when a customer needs to interact with another department in the company, or a new sales rep joins, the lack of past customer relationship management becomes clear.
For example, consider a customer who suddenly has a problem with a product and needs to call the service department. The sales rep they have a relationship with probably has a good idea of their needs and challenges, their past deals with the company, and what products they use in their business. However, if all this information isn't logged and stored in a central CRM system, the service department has no idea about it. This results in a situation that we've all experienced - having to explain all of your problems to a service rep from the beginning when you've been a customer to the company for many years. Why do I have to tell them all this? Didn't they know this already?
In a company that practices CRM and uses a well-maintained CRM system, that would happen. Instead, when service received the call, they would immediately check the CRM to see:
Your personal details - your name, your company, your contact details and where you're located.
Your history with the company - how long you've been a customer, what products you currently use, and possibly what products you're interested in.
The background to your problem - based on notes from meetings, calls or emails logged by salespeople.
They'd be able to solve your problem much more quickly and possibly recommend a new solution based on your needs - and you'd finish the service call feeling pleased with the company. You'd have more confidence in its capabilities and expertise, and you'd probably be more like to buy from them again in the future.
This is what CRM is really all about. It's not just a giant database that takes up your sales reps' time and creates endless integration problems. It's a tool that, when used properly, can support a process that ensures future business success and improves your bottom line.
Unfortunately, the CRM system and process is a major pain point for companies, especially larger, more traditional B2B firms. But focusing on finding a solution that works for you is probably the most impactful measure you can take to increase customer satisfaction and make more sales.
We have a lot more information that will come in helpful if you're considering making a change like this at your company. Make sure to take a look at our in-depth guide to customer relationship management to find out more about the benefits, cost and prerequisites. You can also download a free guide to CRM systems below - it gives you a comparison of the top CRM systems on the market today with the advantages and drawbacks of each one, as well as some pricing information.