Skip to main content

A novice’s guide to CRM

Perhaps in no other industry are acronyms bandied about as they are in the world of technology, especially business technology. CRM is one such widely-used acronym that stands for Customer Relationship Management. Mention CRM and many listeners' eyes will glaze over with boredom – but that's probably because they don't really understand what it is.

Actually, CRM is a strategic business tool that helps companies streamline their business processes especially with sales and marketing, and it can increase revenue by attracting and retaining customers and shortening the time it takes to close a sales deal. If you're not interested in all of that, you're probably not that serious about your business.

But what the heck is it?

There are a lot of vague definitions of CRM. In a nutshell, CRM platforms focus on managing and tracking customers or potential customers (known as prospects). It's a business technology that is mainly used by sales teams and those who interact with or manage those teams. This means CRM can be implemented in a variety of different businesses across different verticals. Don't think CRM is just for companies that have sales teams, though – CRM is used by marketing teams and even tech support. In short, it's beneficial for any business where customer attraction, retention and management are vital.

You may think that CRM sounds a lot like contact management or personal information management (PIM) software like Microsoft Outlook. While many contact management solutions are marketed as CRM, contact management is mainly about organising, sorting, and being able to quickly select contacts from a database or email. Contact management software is also quite limited when compared with full-blown CRM systems.

Although contact management can be considered a component of a comprehensive CRM solution, there are specific features that CRM software and services share that make them more robust than the average contact management offering. If you take a look at a few of the major CRM players around:, SugarCRM, or Microsoft Dynamics CRM, there are common features shared by all of these platforms…

Opportunity Tracking: Opportunities are details about the deals a sales team may be working on. These details often include how much the deal is worth, competing companies that may be vying for the same customer, and what stage the deal is in.

Prospects/Lead Generation: Customers, in general, start out as prospects. A CRM system can keep separate listings of customers and prospects. For instance, in, users can enter prospects. As deals close, those prospects become customers via the workflow within Salesforce.

Email Integration: Communication is key to creating and closing deals. Most CRM software and services will integrate with email systems, such as Microsoft Exchange or Lotus Notes, or even cloud-based email services like Gmail.

Automated Workflow: Automated workflow is another critical component of CRM and can greatly increase a company's efficiency.

Collaboration: CRM is not just about managing customers; it's about communicating with them as well. And collaboration doesn't stop with customer interaction. The major CRM systems allow for extensive collaboration within an organisation. There are often different teams working on the same deal, and the ability for all those team members to have a centralised view of the same information is invaluable. Salesforce has its famous Chatter system – a social networking service that integrates with Salesforce CRM.

Reporting: Reporting is another common CRM feature. Being able to extract data at will and generate a report gives a virtual snapshot of what's going on in the business at any moment. Reports are great also for conveying information to those who may not have access to or who don't regularly use the CRM system.

CRM isn’t exciting, but it is necessary

It's interesting to note that CRM as a process has been around for quite some time. Although debate exists over who actually coined the term, it is generally held that technology research firm Gartner first used the term back in the mid to late 1990s. Back then, many users were tracking customers in Excel spreadsheets – but of course, there were limits to how much data could be supported, how those files could be shared, and how to keep a handle on different versions of the same spreadsheet from cropping up on the network.

That's why dedicated CRM solutions were a welcome technology. Businesses finally had a dedicated way to centrally manage customer information. Since then, CRM technology has flourished and is easier than ever to deploy and manage, and more feature-packed than ever, too.

CRM everywhere

Over the years, CRM has shifted from an on-premise-only solution to one that is increasingly cloud-based. CRM is well suited to move to the cloud because business people want ubiquitous access to customer and sales data.

Another facet of ubiquitous access is, of course, mobile access. You rarely find a major CRM system that doesn't have accompanying apps for smartphones these days, though the extent with which you can interact with your data will vary greatly from service to service.

Strategic, not sexy

CRM doesn't garner the same fervour that social networking platforms, but for many businesses, the kind of networking provided by CRM may ultimately be more important. CRM, whether it's a simple contact management system or a vast integrated platform for an entire far-flung enterprise, can be a key ingredient for business success. And CRM keeps getting better, too, as vendors keep innovating and making CRM easier and more fun to use without reducing any of the technology's power.

If you've got a business, you should have a CRM solution of some kind. If you don't, it's time to get rid of those old Excel spreadsheets and really start managing your customer relationships.

If you decide to take the plunge, then you should read our closer look at how to choose your CRM software.