Decoded: What is CRM

Customer Relationship Management (CRM) refers to the technology and strategies that businesses use to manage interactions with current and potential customers or even B2B-related engagements. A CRM system allows you to collect and consolidate important customer data for use in relevant business processes, programs, and strategies. Due to their flexible nature and powerful capabilities, CRM systems tend to get misunderstood and underutilized in many organizations. This cascades down to missed opportunities for leveraging CRM strategies more broadly and unlocking the real superpowers of this time-tested and increasingly relevant business asset. With the era of AI standing at our doorstep, CRM is the capability your future self might regret not enabling sooner.

CRM systems are a foundational tool in many industries, from e-commerce and real estate to healthcare and finance — but this capability can add value to any type of business if combined with an effective CRM strategy. Whether utilized by sales teams for tracking leads, marketing teams managing campaigns, or customer service teams responding to inquiries, CRM systems are a versatile tool that can help with a wide range of business needs that lean on customer insights and customer-centric growth.

A well-implemented CRM system consolidates relevant customer data from various systems and touchpoints, enabling organizations to streamline processes, improve customer satisfaction, and boost sales performance. These days, most CRMs come as a SAAS (Software As A Service) solution — allowing your business to manage customer data through a simple web interface and a unified view of all the available data. A good CRM will enable you to define the relevant data fields, business funnels, process flows, access policies, and other parameters. Once configured, your business is ready to integrate the CRM into your business processes, ranging from customer management, business development, sales tracking, marketing, and more. Besides that, some CRM systems include automation features and engagement tools like email campaigns, which can usually also be propagated to other systems through existing or custom integrations.

Implementing a CRM is just one part of the solution — specifically the part that enables you to store, structure, and manage data while enforcing coherent data policies. What’s often underserved are the strategies and processes that define who and for what the CRM will be used — and to what end. This is a critical step in enabling the organization to get behind the tool, assign responsibilities, gather constructive feedback, and drive adoption.

Because of their flexible nature and adaptability to different business needs, the implementation and usage cases of CRMs can vary widely between organizations — sometimes even as part of a broader solution or ERP (Enterprise Resource Planning) system. And here is where the confusion often plays in. For many businesses, the procurement of a CRM system is department-driven — either spearheaded by an administrative, sales, or marketing-related department. The real complexity and opportunities come in where the business operations and commercial departments (eg. Marketing) overlap, with one side requiring well-structured and verified data, while the latter requires fast and broad data even if it’s less reliable (meta-data). When done well, the fusion between both can substantially elevate a business’s capabilities, foresight, and impact — driving more impactful marketing campaigns and elevated business solutions.

The benefits of integrating a CRM into their operations are substantial for most businesses and can enable a wide range of new capabilities.

With a unified view of customer data, companies can personalize their communications, leading to better engagement and loyalty. Depending on the data you collect, this enables impactful new campaigns, services, and insights based on data-driven decisions that reflect your true audience. Moreover, you will have a single source of truth that can be leveraged by any relevant system or department in your organization.

CRM systems offer tools to monitor pipelines, automate routines, and forecast trends. This makes it possible to implement robust processes that enforce policies and automate workflows. You can automate low-value tasks, optimize the pipeline and records for each engagement, and enable your teams to focus on the most impactful opportunities.

CRMs optimize data collection, unlocking powerful insights into individual and broader audience trends. These insights help you better understand the preferences, needs, behaviors, and obstacles of your audience. They enable informed decision-making and data-driven validation.

Teams can collaborate seamlessly with shared access to up-to-date customer information, enhancing productivity and communication.

Using built-in features and external integrations, it becomes possible to deploy a wide range of automations based on data changes, timeframes, or other triggers. These automations can perform other data changes, run campaigns, or flag manual actions. The possibilities here are endless.

If you are planning to implement CRM in your organization, you want to start with a well-defined plan. CRM systems and processes can be complicated to adjust once implemented — so you want to cover as much ground as possible from the outset rather than adjusting it later. Here’s how you can approach the process:

Identify the specific challenges you aim to address with your CRM program, whether it’s improving customer support or tracking sales more effectively. Don’t only look at your current needs but take a healthy “what if?” approach and consider additional requirements for the future.

Look for features that cater to your needs, industry, and scale. Popular CRM platforms include Zoho CRM and HubSpot for small to mid-sized businesses or Salesforce for more extensive enterprise solutions. The criticality for a proper foundational setup and the hidden complexities are often overlooked and should be well-defined in your plan.

While there are industry-focused CRMs, you might find this more of an obstacle than an asset as your business and requirements grow.

Once you picked the solution, you can configure and test the implementation. Next integrate the CRM with other essential tools such as email platforms, e-commerce systems, and social media channels. This is the time when you will find the most learnings, challenges, and new opportunities. Make sure to allocate extra time to account for this.

To maximize ROI, training staff on how to use the CRM efficiently is crucial. This often also helps to expand the scope of use cases and relevance within the organization. Define clear processes for relevant operations and user feedback. Optionally select a small group of members from each team to act as ambassadors and team support.

Despite the many advantages, CRM implementations come with their own set of challenges.

Adoption can be hindered by merit of reasons, including practical obstacles or less obvious hindrances like resistance to change. Overcome this by involving key stakeholders early in the decision process and emphasizing training.

Merging data from various systems can be complex. Collaborate with IT teams to establish a clear integration strategy. Again you want to involve these key stakeholders early and openly discuss needs and limitations.

CRMs are strategic assets that often have complex requirements and have a tendency to lock you in as the dependency on your data grows. When implementing a CRM it’s best to leverage an expert to advise you on the implementation and establish the requirements together. This will save you a lot of money and head headaches later as your in-house teams are likely to focus on concrete current needs — and have less experience In dealaing with technical and future needs.

Businesses often see a tool as a solution — but a CRM is just a part of a solution, specifically the part that enables you to structure and manage data. What’s often forgotten is the process that defines who and for what the tools will be used and to what end. This is a critical part of enabling the organization to get behind the tool, assign responsibilities, and gather constructive feedback. Members of your team might also be biased toward certain situations they know and worked with before. While this might be an asset, it does not mean the system is the right choice for your organization.

CRMs are only as powerful as the data they hold — and even then, it only counts if the data is reliable and meaningful. It’s also likely that some of the information is sensitive or should only be accessible to specific teams. This is where clear governance comes in. Assign someone who is responsible for maintaining, enhancing, and governing CRM processes, access policies, and integrations.

CRMs are a time-tested capability across businesses and industries that unlock a wide range of opportunities. CRM systems have continued to evolve along with technological advancements and have become ever more powerful assets in the toolbox of modern business. Today CRMs mostly live in the cloud, allowing them to be interconnected, consolidating and exchanging data from many touchpoints of an organization. This allows us to craft ever more integrated and personalized customer journeys while harnessing the power of machine learning and AI even to predict the future needs and behavior of our customers.

With AI becoming increasingly prevalent, access to structured data will arguably be a deciding factor for the success of the modern business. This makes CRM one of the most important starting points in future-proofing your competitiveness for the future.

Another general trend that touches CRM is a shifting landscape around the collection and handling of customer data. While data solutions will always be legitimate tools and necessary, a clear focus on compliance and data governance is becoming ever more prevalent.

Beyond CRM systems, there is a growing adoption of customer data platforms (CDP). Emerging as complementary tools, CDPs emphasize the collection and unification of data across all customer touchpoints. Some systems also incorporate CRM functionality as part of a broader solution. While the most effective approach will be different based on the needs of each organization, it’s clear that data and CRMs continue to play a big role in the toolbox of the modern businesses.