Customer relationship management (CRM)

Customer relationship management (CRM) is a tool that helps companies track and drive revenue while maintaining and improving customer relationships.

It enables teams to capture and manage customer interactions and sales activities across channels in one, centralized place. By removing silos and providing a unified customer view, CRM ensures businesses can exchange key data and insights across sales, support, and marketing.

Sales teams typically use a CRM for pipeline visibility and forecasting, contact and deal management, activity tracking, and lead generation–and to integrate all these tools. A CRM also automates workflows, processes, and tasks to boost productivity and help organizations do more with less.

Why do companies use CRM?

Companies use CRM to accelerate revenue growth and deliver better customer experiences. With CRM systems and tools, they can:

• Get the full context of where prospects and customers are in their buying journey to move deals along

• View key customer and potential customer information in one place to personalize interactions

• Accurately forecast and manage pipeline to plan, track, and analyze the sales process

• Set up triggers and automate tasks to keep sales reps on target

Companies also use CRM to modernize their organization. Legacy or ad hoc solutions like spreadsheets require heavy data maintenance and fail to deliver the comprehensive analytics sales managers need.

Take Standard Beverage, the leading distributor of alcoholic beverages in the state of Kansas. Its sales team wrote client information on scraps of paper or relied on memory, which decreased productivity.

The team opted for an easy-to-use CRM, one the reps could adopt quickly. That proved to be the key for pushing the team to modernize its sales methods, which led to a 300 percent increase in accounts.

More in this guide:

• What are the key features of a CRM?

• Types of CRMs

• 10 benefits of customer relationship management: How CRM can help your business

• How much does a CRM cost to implement?

• What are some CRM examples?

• How to build a successful CRM strategy

If you think of CRM as a brain covering the entire customer journey, its features are the different neural pathways that all connect and lead back to a central processing center. Many pathways help with workflow and sales automation, some with reporting and analytics, and others with call center solutions. These features allow each team to handle specialized tasks effectively.

Let’s look at the most important features of a CRM system:

Full customer view

In the Zendesk Customer Experience Trends Report 2022, 73 percent of surveyed business leaders said there’s a direct link between customer service and business performance. Integrate your customer service software with your CRM to gain a complete customer view—this can help you leverage data to provide unique, personalized experiences.

• Centralized platform: A centralized platform puts all customer information in one place so you always have full customer context.

• App integrations: With one click, connect your business apps to help improve your workflow.

• API access: Modify and customize your interface with rich, open APIs.

• Mobile app: Meet customers where they are, wherever you are.

• Subscriptions: Track a customer’s recurring revenue and view their subscription end dates.

Productivity tools

The best CRM software offers tools that help your agents work more efficiently. These include:

• Email integration: Syncing your existing email to your CRM gives you better visibility into the sales process and boosts your productivity with alerts, templates, automations, and more.

• Sales engagement tools: Build lead lists and automate outreach so you can easily connect with (and follow up with) qualified prospects and personalize your communications.

• Task player: With the context of each task, lead, or deal all in one place, a task player can streamline routine actions (like contacting a customer) so you have more time to focus on selling.

• Messaging and live chat: Whether they were sent via text, social media, or live chat, messages with a lead or contact are instantly logged and recorded.

• Smart lists and templates: Segment and filter your leads, then save your most frequented views of customer data as “smart lists” for quick access. You’ll no longer need to repeatedly customize a view.

• Sequences: Create a sequence to automatically email prospects at your chosen intervals.

• Power dialer: Like speed dial on steroids, a power dialer allows you to create and automate a custom call list.

• Bulk outreach: Select multiple contacts and send numerous emails at once.

• Sales triggers: Automate specific parts of your workflow and reduce admin work by building trigger-based actions.

Reporting and analytics

Reporting and analytics can provide invaluable insights into your business and customers. You can tailor these powerful features to meet your individual needs.

• Accurate forecasting: Predict deal volume and revenue growth so you can continue refining your strategy.

• Pipeline analysis: View and analyze your deal progression to see where there might be bottlenecks or areas that need improvement.

• Advanced analytics: Gain a deeper understanding of trends and performance with real-time and historical data, pre-built dashboards, customizable dashboards, and collaboration tools.

• Activity reporting: Generate reports that evaluate metrics—like calls made and email outcomes—and help you track activities that could lead to potential sales.

• Performance metrics: These metrics from sales trackers tell you whether you’re on pace to reach your goals—or if your pipeline needs tweaking.

• Custom dashboards: Use widgets to monitor performance goals, activities, and tasks.

Each type of customer management software serves a unique purpose and provides a specific benefit to your customers.

Conversational

Conversational CRMs help businesses build long-term relationships with customers by enabling rich, fluid conversations that can take place anywhere, anytime.

Purpose: to create an easy, streamlined customer experience that results in customer loyalty.

Best for: companies that want to upgrade their overall customer service and develop more meaningful relationships with their audience.

Customer benefit: customers receive a personalized experience through the communication channels of their choice.

Collaborative

Collaborative CRMs provide tools that allow businesses to maintain and share the most up-to-date customer information across departments.

Purpose: to break down information silos that decrease productivity.

Best for: companies with large sales, marketing, and customer service departments working in multiple locations or handling large volumes of customer data.

Customer benefit: customers won’t ever have to repeat themselves, even if they speak to a different person.

Operational

Operational CRMs offer sales force automation and tools for streamlining daily workflows and ensuring business operations aren’t hindered by poor, sloppy processes.

Purpose: to create smoother operations and allow more time for human connection during the customer journey.

Best for: companies with complex sales processes that are seeing qualified leads drop out of their pipeline.

Customer benefit: customers have a seamless, hassle-free experience from the moment they’re aware of your company.

Analytical

Analytical CRMs help companies gain more insight into their customers’ needs and buying patterns, so they can refine their strategy for better results in the future.

Purpose: to analyze customer data in a way that reveals and predicts their behavior, allowing every department to improve its operations.

Best for: companies with large amounts of data that want to better understand their customer base.

Customer benefit: customers get personalized experiences because the business fully understands who they are.

In our State of Sales report, 72 percent of business leaders said that sales needs to be cross-functional and integrate tools—like CRM software—to avoid losing business. A CRM can help sales, marketing, customer support, and project management teams save time, stay organized, and access deeper insights.

Here’s what investing in customer relationship management can do for your business.

Get organized and see customer data in one place

With your customer data organized in one place, you’ll have a clear view of your business. This gives your teams full customer context, allowing them to understand patterns and tailor each interaction—whether it’s a targeted ad, customer support exchange, or sales call.

Set goals and track your progress

Set high-level goals with easy-to-use analytical tools. Monitor team progress, and stay informed the moment anyone falls behind or goes off course. You’ll also be able to readily see who’s handling what and where your efforts are most needed in keeping everyone on track to hit quarterly targets.

Personalize customer interactions

Personalizing your interactions not only makes customers feel warm and fuzzy about their experience—it also breeds customer loyalty, which boosts sales. According to our CX Trends Report, 90 percent of customers will spend more with companies that personalize their experience. Customer relationship management systems help you gather the right information for crafting messages that are most likely to resonate with your customers.

Target your customer base

CRMs collect, organize, and store historical customer data so you can create targeted, personalized campaigns for your audience. Even better, the technology allows you to segment your customers so you can better understand how to tailor the experience for each group. Understanding your buyers allows you to seek out similar prospects, too, increasing your chances of success.

Boost customer loyalty

A CRM has all the ingredients needed to build better relationships with customers—these strong emotional connections are key to fostering customer loyalty. But customers have high expectations for the companies they do business with: Our CX Trends Report revealed that 61 percent of shoppers would switch to a competitor after just one bad experience. Businesses must provide easy, seamless, conversational experiences if they want customers to stick around, making a CRM even more important.

Scale your business

As your customers’ needs and preferences change, you must evolve with them. Your CRM powers your business, so it has to provide features that support your growth. A unified customer view paired with automation, self-service portals, and omnichannel communication can help your company scale at the pace you want. Increasing customer retention rates means you can plan for expansion, with less fear that your bottom line will suffer as you introduce new products or services.

Increase collaboration between teams

Teams can easily collaborate when everyone is using the up-to-date information from your sales dashboard. Customers hate repeating themselves, so when departments share information internally, the customer experience improves. Marketers and salespeople use the same data to craft consistent messaging, so no one is confused about who’s making what promises.

Improve profitability

Upselling is more successful when you understand who your customers are and what they want. Like a bartender who knows what the regulars typically order, marketing and sales can be strategic about when and how they jump into action, rather than throwing everything at the wall and hoping something sticks.

Automate tasks

Using a CRM to automate repetitive tasks can help your business deliver great customer experiences—all while freeing up your team to focus on selling. With Zendesk Sell, you can automate tasks to manage sales forecasting, leads, quota setting, sales calls, follow-up communication, and more.

Work from anywhere

The future is now. Cloud-based customer relationship management and mobile apps allow salespeople to manage appointments and tasks, update deals, track visits, and log calls—right from the palm of their hand. The Zendesk Sell mobile app even allows access to reporting and analytics so you can monitor metrics, like key performance indicators (KPIs).

From modest startups to massive corporations, there are CRMs—and pricing options—for everyone. Zendesk Sell offers great time to value because you can implement and integrate it quickly and start seeing a return on investment (ROI). In fact, 70 percent of teams are up and running with Zendesk in less than eight weeks, and more than 66 percent of the companies saw a return on their investment within the first six months.

A CRM is like a good restaurant server—the diners may barely notice them, and yet the water glass is always full. You’ve likely been engaging with CRM software for longer than you think.

Many businesses use CRM software to track customer behavior, handle customer satisfaction issues, and collect feedback from consumers.

What is CRM in sales?

Customer relationship management systems provide seamless sales management tools with up-to-date conversion and activity overview reports. Seeing where salespeople are falling short helps managers determine where more coaching might be needed, which leads to a stronger overall salesforce.

A sales CRM also automates many repetitive tasks, so salespeople have more time to engage with customers.

Take Standard Beverage, for example. The company needed to upgrade its client management system. The system? Relying on memory or jotting client information on scraps of paper. Standard Beverage wanted an easy-to-use CRM, so it gave Zendesk Sell a shot. After integrating our CRM, the business experienced a 300-percent boost in accounts and scaled its team by 66 percent.

What is CRM in marketing?

The best CRMs can also help you create targeted campaigns. CRM tools allow for customer segmentation so you can gather and parse valuable customer data. This provides insight into which customer groups you can target and how to personalize their experience.

A robust CRM safely collects and houses customer data such as:

• Purchase history

• Conversation and interaction history

• Customer information (job title, contact info, social media handles, etc.)

The data stored in your CRM can help you better understand your ideal customers, allowing you to deliver tailored experiences that help build relationships.

What is CRM in customer service?

A good CRM gives customers what they really want: an effortless, streamlined experience. That means providing personalized support anytime, anywhere. The conversation is always connected and ongoing, whether it happens via SMS, direct messaging, live chat, social media, email, or phone.

CRMs also keep your business in sync and set your teams up for success. They provide your agents with tools that make their jobs easier:

• Easy-to-automate workflows

• Self-service portals

• Reporting and analytics tools

• Unified view of customer information

With a CRM, your team won’t need to switch between several different programs to find important information. This enables them to be more efficient and productive.

Conrad Electronic invested in Zendesk to elevate its customer experience standards. Since implementing our unified sales CRM and support solution, Conrad has resolved over 160,000 tickets, increased first-response time by 30 percent, and seen 35,000 monthly self-service interactions.

“The Zendesk software package has given us a complete, one-stop solution that provides a 360-degree view of all our customers,” says Sven Wachtel, senior director of customer care DACH at Conrad Electronic. “It also allows us to interact with one another across departments, for example between Sales and Support. You can’t get much more transparent than that.”

It’s essential to approach CRM solutions with a strategy that’s specific to your needs. Whether you want to improve your sales, marketing, support, or overall customer experience, choose a CRM that will help you achieve your business objectives. Here are a few ways to create a successful CRM strategy.

• Determine your CRM goals: Perhaps you want to create customer loyalty, increase productivity, or improve collaboration between teams.

• Define your customer journey: Map out your ideal customer journey, and describe how you can make each step a great experience.

• Create your KPIs: Analyze which metrics will best help you track your progress.

• Identify which tasks you can automate: Automating client communications and reporting, for example, can enable your team to work more efficiently.

• Integrate existing programs with a CRM: Connect your current systems with Zendesk Sell to create a seamless experience for both your customers and employees.

How do you know a CRM system is effective?

To gauge your CRM’s effectiveness, make sure you’re setting specific, measurable goals. Then, keep a close eye on sales data that will tell you if you’re heading in the right direction or falling short. This includes:

• Close rates

• Upsell rates

• New-net revenue

• Length of the sales cycle

Keep in mind that the true power of a CRM lies in the way you use your data. Any CRM system can give you numbers and analytics, but you need to know how to interpret them and where to pivot to get the most out of your customer relationship management experience.

In the long term, investing in a CRM will be a critical part of your business and completely worth it. Now that you know what it is and what it does, it’s time to start evaluating your options.