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What is CRM? Definition and FAQs

Thomas Wailgum | July 17, 2017
Customer relationship management (CRM) is a strategic process that will help you better understand your customers’ needs and how you can meet those needs and enhance your bottom line at the same time. CRM systems link up all the ways information about customers comes into a business, including email, web sites, brick-and-mortar stores, call centers, mobile sales staff, and marketing and advertising efforts. The data collected flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for patterns.

For more on the cloud vs. on-premises CRM decision, read why one company left their legacy CRM behind and made the move to cloud.


Which division should run the CRM project?

The biggest returns come from aligning business, CRM and IT strategies across all departments and not just leaving it for one group to run. The reason for this, as Moira Alexander writes, is that "in most companies, individual departments or teams believe they hold the key to understanding customer needs more than other areas of the business. But the reality is that different departments simply have a different view into customer expectations and none has an all-encompassing view."

In fact, it’s best for the business departments who actually use the software to take ownership of the project, with IT and the CIO playing an important advisory role.


What causes CRM projects to fail? 

Many things. From the beginning, lack of a communication between everyone in the customer relationship chain can lead to an incomplete picture of the customer. Poor communication can lead to technology being implemented without proper support or buy-in from users. For example, if the sales force isn't completely sold on the system's benefits, they may not input the kind of demographic data that is essential to the program's success. One Fortune 500 company is on its fourth try at a CRM implementation, because it did not do a good job at getting buy-in from its sale force beforehand and then training sales staff once the software was available.


More on customer relationship management:

  • 13 tips for managing the data in is increasingly used as the system of record for many aspects of the customer relationship, but too often the data in the system has not been managed as a strategic asset. These metrics will help you evaluate an SFDC database for its completeness, quality and fidelity.
  • The 11-point audit for your system
    Use these rules of thumb when evaluating an SFDC system configuration for its sustainability and manageability and to root out technical debt and the eventual budgetary and data corruption surprises.
  • 5 Dreamforce takeaways to guide your CRM strategy
    With 170,000 attendees, 2,100 sessions and 500 vendors, the signal-to-noise ratio at Dreamforce 2016 was pretty low. Now that the dust has settled, here’s what’s worth knowing.
  • How to fix a broken CRM pipeline
    There are several metrics you can use to validate health of your sales pipeline. But simple numbers need to be supplemented by policies, automation, and business processes that provide incentives for good behavior. Here some examples of policies that should be in place.
  • How to tell if you have a 21st century sales team
    In many industries, the revenue generation function — sales and marketing — is the single biggest cost of running the business. Yet it’s also the most unreliable. That’s why tightening up the business processes with CRM systems is so important to profitability. Here’s how to tell if your company’s revenue generation process is up to modern standards.
  • 11 CRM best practices
    In today’s multichannel retail world, having a database of customer names, contact information and purchase history is not enough. If you truly value your customers, you need to not just focus on customer management but on building long-term relationships. These best practices can help organizations – specifically their marketing, sales and customer service departments – do just that.


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