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What Is CRM Meaning? Full Guide of CRM Application Definition & Benefits

What is CRM? Customer Relationship Software builds better customer relationships. Here’s why every business needs a CRM platform.

Scot Trumeter
Written by
Scot Trumeter
Scot Trumeter
Scot Trumeter

Scot Trumeter - VP of Sales

More from Scot Trumeter

Published: Apr 05, 2024

| 23 mins read

What is CRM software?

Customer Relationship Management is a type of software that helps businesses collect, organize, and analyze customer data to build better relationships. You can track customers across every touchpoint to ensure they have a pleasant and satisfying interaction with your brand. 

Housing data in one place also gives you a better understanding of how to market, sell to, and serve customers and prospects. 

In the past, only large enterprises could afford a CRM system, and the software was difficult to learn and use. Today, there are easy-to-use, affordable CRM systems that cater to businesses of every size. 

Pay attention to our top 5 CRM in 2023:

Who is CRM for?

Of course, I would like to say that everyone needs it. But small and medium-sized businesses need CRM more urgently. Large corporations, as a rule, keep various records and automate processes.

Small and medium-sized businesses are especially acutely dependent on the client:

  • if this is not a national business, you do not have the opportunity to lose customers just like that this will immediately affect the performance and finances;
  • high control in terms of costs is needed in order for the company to be marginal and, moreover, to grow;
  • the entry threshold is low, which means that competition is always growing, new brands appear, and without noticeable differences, it is difficult to remain in the lead.

In which areas is CRM most often used:

  • IT;
  • HoReCa (hotels, recreation centers, restaurants);
  • Fashion Retail (cosmetics, clothes, shoes, accessories, etc.);
  • Infobusiness and training (courses, master classes, schools, etc.);
  • Services (from beauty salon to cleaning);
  • Internet shops;
  • Real estate;
  • Events (organization, co-working spaces, and spaces for rent).

But you can use CRM for almost any business. The only exception is the minimum customer base. If, for example, a private specialist, or a freelancer maintains a stable 3-5 projects, it makes no sense to keep records in a CRM system, you can get by with handy applications, tables, etc.

What does a CRM system do?

Contact & Accounts Management

A contact in CRM is customer data or a "personified lead". The system allows viewing the list of existing contacts and adding new contacts to the database.

Lead & Opportunity Management

Lead (interest) - potential deal, expressed interest, "hook". A responsible person and a status can be attached to a lead, which determines how this lead will be further promoted in CRM. A lead should eventually convert into a Contact, a Company, an Agreement.

Orders, Invoices & Contracts

Agreements are the ultimate goal and the desired result of the entire customer interaction management system. Agreements can be viewed, edited, and exported in CRM.


Events are different actions that your marketing and sales departments perform on CRM entities. All these actions can be displayed in CRM by adding events. You can add an event to a contact, a company, and an agreement.

Dashboards & Analytics

Reports are one of the most important links of the CRM system, since it is the reports that allow you to analyze the effectiveness of all work with clients and adjust it at certain stages. In CRM, there is a wizard for creating reports on all entities with groupings and intersections. Schedules are being built for all reports.

Why Your Business Needs CRM: Build Better Customer Relationships


Nowadays, it takes more than a great product or service to keep customers satisfied. True customer satisfaction depends on the quality of your relationships. By treating the customer as a valued partner vs. a transaction, you establish a mutually-beneficial relationship. 

This creates customer loyalty, which is important for long-term business success. Repeat customers generate 33 percent more revenue. You can also leverage your superior service into new customers. Happy customers share their experiences with others and refer 11 people on average.

However, to create the relationships you want, you’ll need to find out as much as possible about them. This is where CRM enters the picture. It can collect and make sense of huge amounts of customer data. 

[Related Article: 10 Best Free CRM Software]

How a CRM Platform Works

The CRM system works on the principle of omnichannel - integration of various communication channels into a single platform that ensures maximum efficiency and continuous contact with the client.

Organic search, Internet advertising, e-mail mailings, media activities, online events. The system clearly identifies the source channel and helps analyze the effectiveness of each. CRM will calculate not only the number of leads by channels, but also their conversion into sales. The collected analytics will show which channels should be strengthened and which ones should be disabled.

Main functions of CRM:

  • collection and systematization of the customer base;
  • tasks and reminders to managers about communication with clients;
  • automation of the sales department (digital funnel);
  • analytics (regarding operations, sales funnel, managers).

What are the types of CRM systems?

Collaborative CRM systems

In this case, customer relationship management is about aligning sales processes, marketing and customer service, which helps different teams share information about your customers.

Examples of collaborative CRMs: Zendesk, Copper, Insightly, Neon.

Operational CRM systems

The key purpose of such systems is the optimization of work processes, and the list of their tasks includes: lead generation, warming up of leads and improving the quality of customer service. That is, operational SRM can be considered universal, because they can be used as trade, marketing or service systems.

Examples of operating systems: (CRM for sales), HubSpot (marketing CRM), Agile (service CRM).

CMS Hub Starter

Analytical CRM systems

Thanks to them, you will be able to provide customers with quality services based on data collection and analysis. The principle of their operation is quite simple: the tools perform the collection of information, and then you use it to establish sales, conduct marketing campaigns and improve the level of customer service.

Examples of analytical CRMs: Zoho, Pipedrive, Creatio.

How to choose the right CRM

Choosing a CRM system for the first time, it is easy to get lost in the variety of programs with different functionality. Which CRM system is better? Should you immediately buy an expensive and popular one, or is it better to start with something simpler? What features should be there and what will not be needed?

Switching to a CRM system is a serious step. Therefore, it is important to carefully analyze the needs and peculiarities of the business, as well as to pay attention to a number of nuances, which are discussed below.

  • Convenience and ease of use.
  • The flexibility of settings.
  • Availability of a mobile version.
  • Price.

BTW, you may run a quick wizard to compare prices:



The main goals that are achieved thanks to the implementation of CRM in the work of the company:

  • increasing sales by automating interaction with the customer;
  • optimization of marketing campaigns;
  • improving the level of service due to the collection and use of information about customers;
  • improvement of business processes;
  • increasing the efficiency of the staff.
    How to Choose a CRM System

Why Your Business Needs CRM (Part II): Better Management, Marketing, Sales, and Service

While it was designed for relationships, CRM has a dizzying number of features to drive success across your entire organization.

Find your CRM for Free

Executives, Marketers, Sales Teams, and Customer Service can all benefit from the right CRM platform.

Let’s drill down into the specific tasks and benefits a CRM can perform for each department.

[Related Article: The Best Marketing Automation Software & Platform]

CRM for Business Owners


In an increasingly digitized world, businesses may need to redefine how work gets done to stay competitive.

A CRM can modernize all of your office processes to increase profitability and efficiency. It also provides an inside view of how your employees and departments are performing.

Save Money With a CRM System

A CRM system digitizes all your paper records, such as customer information, financial data, communications, and notes. This significantly reduces your overhead. You don’t just eliminate paper waste; you get rid of your inefficient paper-based processes, saving you time and money. According to industry statistics, for every dollar a company spends on CRM, it gets back US$8.71.

Better Reporting

All of the data flowing into your CRM can be turned into intelligible, visual metrics through charts, funnels, graphs, and dials. The process is automatic, transparent, and requires only a few clicks from staff to generate analytical reports, such as: 

  • Sales reports (revenue, pipelines, conversion rates)
  • Campaign reports (traffic volume, bounce rates, email opens, marketing ROI)
  • Customer reports (buying patterns, demographics, lifetime value, retention rates)

With CRM, you can easily monitor the productivity of your sales, service, and marketing departments.

Monitor Employee Productivity 

Your CRM can also track individual productivity through activity reports. The CRM will record all of the users’ open and closed tasks. You can view emails sent, calls answered/unanswered, meetings attended, and sales opportunities won and lost. 

This eagle-eye view of your employees allows you to identify strengths and weaknesses among your staff. Someone may be primed for a promotion, while a lagging member might require additional training. By the way, you are welcome to go through the current vacancies for customer relationship management specialist.

CRM for Sales Teams


Sales teams tend to be resistant to any tool or task they perceive as taking them away from their core job–selling. But investing a few moments in CRM software each day can improve their work-life and commissions. Here’s how.

Automated Lead Scoring

Not all leads are created equal. They are ranked by their likelihood of becoming a paying customer. A CRM can provide automatic lead-scoring according to the priorities you define, including job role, number of touchpoints, company budget, or location. You set up the scoring rules, and your CRM will deliver the hottest leads to your sales team.

A CRM can trigger automatic responses (such as emails, promotions, and popups) to advance leads through the sales funnel. 

Streamline the Sales Cycle

A CRM helps streamline the sales cycle, allowing staff to close deals faster. A lot of routine sales tasks can be automated, such as preparing quotes and processing orders. The CRM dashboard tracks everything in the pipeline so that the sales department can identify any bottlenecks. It can also analyze your top performers’ behavior so that you can share their ‘secret sauce’ with the rest of the team.

Identify Selling Opportunities

By tracking all communication with customers, CRM helps salespeople identify the right opportunity at the right time. They can see where a customer is in the buyer journey and know just when to pitch a product replacement, warranty extension, contract renewal, or upsell.

A CRM can also analyze customer behavior and provide the best time to reach out to customers and leads. For instance, it keeps a record of email opens and can identify when an email is most likely to be read. Call logs determine when the customer is most likely to answer the phone. As the adage says, timing is everything. When a CRM times your sales activity, your team is much more likely to close the sale.  

CRM for Marketing


A CRM offers your marketing team a treasure trove of data that they can use to make a lasting impression for your brand. It can also automate some of the less inspiring marketing tasks so that they can focus on strategy.

Marketing Automation

A CRM allows marketers to automate a lot of their top-of-funnel activities. A cookie tracks visitors as they navigate the company website. Marketers can program the CRM to automatically perform certain actions based on visitor behavior. For example, if a visitor lingers on a product page, this could trigger a popup of a demo-video. If a visitor abandons their cart, this could trigger an email offering a discount on one of the items. These built-in actions allow your business to rope prospects back in–automatically.

Customer Targeting

Consumers are surrounded by personalization every day. Spotify creates carefully curated playlists based on your listening history. Amazon has an uncanny ability to suggest the product you didn’t know you need. And YouTube can keep you glued to your screen, suggesting hour after hour of entertaining videos. These companies know their customers intimately. 

Consumers have come to expect the same degree of personalization from every business transaction. Indeed, 72% of consumers will only engage with personalized marketing. 

What’s a small business to do in the face of such high expectations? Invest in a CRM. A CRM collects customer and prospect data such as geographic location, purchase history, industry, lifetime value, site visits, products viewed, and job titles. The software then segments your audience, allowing you to create highly targeted ads that are more likely to grab your buyers’ attention. 

Marketing ROI

The average marketing budget comprises 11% of total company revenue. This is a fair chunk of change for any business. The generous allowance gives marketers the ability to create successful, wide-reaching campaigns. It also gives them the potential to waste large sums of money, particularly if they don’t know how to calculate the ROI for each marketing dollar spent. 

With a CRM, you’ll never be left wondering if a campaign converts. A CRM tracks KPIs such as impressions, clicks, views, and time spent on the page. These metrics deliver clear signposts for what content engages your audience and what turns them off. 

CRMs explicitly developed for marketing, such as HubSpot, allow you to track leads from source to sale. If your marketing team is better known for its creative flair than its grasp of numbers–no problem. HubSpot CRM has a built-in ROI calculator and can generate easy-to-read reports. 

CRM for Customer Service


Customer service is becoming an increasingly tough gig. Customers have become more complicated and demanding. Plus, customer service reps must navigate a complex web of touchpoints. A CRM platform can make it easier to keep customers happy in the following ways:


All employees are connected to the same customer record. No details or requests ever fall through the cracks. This is especially helpful for complex service tickets that require ongoing support across multiple departments.


AI-powered chatbots can relieve the monotony of routine tasks. For example, the most commonly asked questions can be routed to your bots. Basic tasks can also be led by AI, such as resetting a password or signing up for a webinar. This frees up customer service reps to do what matters most–nurture client relationships. 

Multi-Channel Support

This is the age of hyperconnectivity. Customers and businesses can engage in more ways than ever: chatbots, social media, phone, text, and email. Countless interactions are happening around the clock, on multiple channels. It’s all but impossible to keep up with them, and yet customers expect immediate attention. 

CRM software delivers real-time notifications every time someone interacts with your brand on any channel. Customer service reps can respond from a single dashboard, no need to toggle between windows. 

How Do I Get Started with CRM?

Most often, the use of CRM for an enterprise is carried out by a full-time employee (system administrator, employee of the sales department, etc.). But this is not the best solution. People who have not been involved in this type of work, do not have experience and relevant knowledge, will not be able to fully implement the system and configure it so that it works 100%. That is why such work should be entrusted to professionals.

  • Implementation of CRM systems allows:
  • create a single client base;
  • record information about all types of interactions with clients (agreements, calls, transactions);
  • control workers at workplaces;
  • to conduct reporting of significant performance indicators taking into account a single database.

The ultimate goal of CRM integration is the automation of document flow, business processes, and sales growth.

Why Every Business Needs a CRM System

In a crowded marketplace, customer relationships have become a strong currency. You can think of CRM software as the mint. CRM software takes in all customer data, analyzes it, and delivers insights to businesses about their customers. Armed with information, your business can serve clients better and create relationships that last.

Not sure what you need?

Use our free guides and tools. Just fill in the forms with your requirements and get a full report and list of CRMs that could be a great fit for your business.

Choose the CRM for your needs

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Scot Trumeter

Scot Trumeter - VP of Sales

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