What is a CRM and what types are there? Ultimate Guide to Customer Relationship Management

If you do not know what a CRM is, we indicate that it is a customer relationship management software that collects data from customers and potential customers and then makes it visible to internal teams.

The resulting holistic view of customers and prospects enables sales teams to create personalized buying journeys. The result is a greater chance of closing sales and creating high-value customers for life. This guide explains what a CRM is, how it works, its advantages and disadvantages, and how to choose the best one for your company.

What is a CRM?

Customer relationship management (CRM) software offers tools and capabilities to efficiently manage a company’s lead pipeline and customer journey.

It collects personal data to form a holistic view of customers and prospects, then makes this data visible to company teams like sales, marketing, and customer service. Company representatives can use this 360-degree view of customers or prospects to deliver personalized experiences that close sales and build loyalty.

For starters, a CRM collects customer or lead data from website forms, emails, text messages, and meetings with your sales and customer service representatives, among other sources. It then offers visibility into that data to its reps.

For example, if your website form indicates that a potential customer is interested in a particular product, your marketing department can use that data to create targeted campaigns, and your sales reps can reach out to encourage sales of that product.

4 things a CRM can’t do

A CRM offers tools to help collect digital customer data, create efficiencies in outward-facing functions, and manage the customer journey or pipeline of leads. However, to build and maintain a website, create internal efficiencies, manage projects in depth, or manage data offline, alternative software is necessary.

To minimize the limitations of a CRM, make sure your workers are well trained and used to using their CRM on a consistent basis.

Creation and management of websites

CRM software offers the ability to manage the journey your website and other digital channels take to leads and customers. For example, they may help you collect information about website visitors’ product or content preferences, demographics, and contact information.

However, you cannot build or publish a website. Therefore, if you need a tool to help you create and maintain a website, it is best to consider a content management system (CMS) with a website builder.

Internal business operations efficiencies

A CRM helps create efficiencies in external functions like sales, customer service, and marketing. For example, you can automate reminders for sales or customer service representatives to communicate with prospects or clients.

However, if you need software that drives internal business efficiencies, consider enterprise resource planning (ERP) software, which can help manage internal processes like payroll, supply chain management, and financial services.

In-depth project management

CRM enables contact management and holistic visibility into lead channels and customer journeys. It even helps manage the progression of the customer journey. However, it does not offer key capabilities for handling other types of projects, such as product development.

Offline data management

A CRM collects data from all digital channels. Depending on the CRM software, this may mean collecting data from social media, ads, email, chatbots, and websites. However, there are CRM limitations when it comes to collecting data from non-digital channels.

These limitations, if not handled correctly, could mean lost revenue.

For example, if your field sales reps aren’t entering notes about their face-to-face conversations with prospects or customers, that data won’t be visible within their CRM for other business functions to access.

This could mean lost sales or an upsell, as missing data limits your company’s reps’ ability to create personalized experiences based on that data.

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Gerard Heperd

Gerard Heperd