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What is CRM?

This article explores the meaning of Customer Relationship Management (CRM) in depth, including why CRM systems are important, what the different types are, and how to choose the best CRM system for your business.

6 minutes

Written by Access CRM team

What is CRM?

CRM stands for Customer Relationship Management, where the term is used in a variety of contexts. CRM can be used to describe a businesses strategy to improve their relationship with their customers, a process that businesses use to manage customers, or in reference to the software that records customer interaction. This is often called a ‘CRM system’.

People can use CRM in a variety of contexts. It can be used to describe the strategy a business could use to tackle their relationship with their customers. Or it can be used to describe the process that businesses use to manage customers. Finally, it could be used in reference to the software that records customer interaction. This is often called a ‘CRM system’. 

There are multiple kinds of CRM systems. The three most common are collaborative, analytical, and operational. Different CRM systems serve different purposes, so it’s important to know the variations between them so you can select the best fit for you.  

What do we mean by 'CRM system'?

A CRM system is a database that provides an overview of business information throughout the customer lifecycle. Marketing, Sales, and Customer Service interactions are all recorded. Relationships between the business and their customers can be documented, as well as interaction with suppliers, colleagues, and other clients. 

The information captured on a CRM system can be contact information and basic details like names, emails, telephone numbers, website addresses, and social media links saved all in one place. However, you can also document important information like previous conversations, customer preferences and amendments, and even previous campaigns marketed towards them. 

CRMs allow you to organise and evaluate all this information to better understand your customers, their needs, and extend their consumer lifecycle. Ultimately, this increases customer value and your revenue. 

Is CRM just a database?

A CRM is more than just a database. It allows a business to personalise the customer experience through both market segmentation and specialised campaigns. But a CRM can automate tasks, analyse the sales process, and track customer service and lead generation information. 

Why are CRM systems important and useful?

CRM systems are important to most businesses as they deepen their relationships with stakeholders. With a CRM, you can keep track of important leads and plan for the future to increase growth. You can also track and guide your customers through the sales funnel without needing to memorise their previous history, problems, campaigns, or personal details. CRM streamlines the process so that you can focus on acquisition and retention. 

Using a CRM also provides a multitude of benefits: 

  • Cross collaboration – A CRM allows employees from different departments to work seamlessly, with information updating in real time 
  • Deeper relationship building with customers & suppliers  
  • Enhanced tracking of relationships  
  • Accurate reporting – Save time by generating detailed reports and personalise data to suit your business needs 
  • Centralised data 
  • Reduction in admin time 
  • Improved ROI with targeted campaigns – Find out which campaigns are most effective for your audience at-a-glance, or create personalised campaigns to maximise your ROI 

The different types of CRM systems

With hundreds of CRM systems on the market, it can be difficult to know where to start. Defining what kind of CRM is right for you can be the best step in ensuring you make the right decisions. 

The three main categories of CRM system are collaborative CRM, Operational CRM, and analytical CRM. Let’s take a look at these CRM types in more detail: 

Collaborative CRM 

Collaborative CRM systems let multiple departments share all of their information in real time, keeping everyone involved in the sales process and providing high quality customer service. 

The main benefit to collaborative CRM is efficiency. When a customer reaches out to an employee, no matter who they’re talking to, they are always equipped to solve the client’s problem. It also spares the customer from repeating their problem multiple times, as all interactions are recorded on the system. 

Operational CRM 

Operational CRM is constructed to manage your customer interactions. It comprises of automations that save time by sending out automatic follow-ups, and alerting you to promising, prospective clients. 

It can also be used to respond to triggers like suggesting similar products to customers buying items online. Operational CRM systems often support customer service features like live chat and automatic email responses that speed up the handling of customer concerns. 

Analytical CRM 

Analytical CRM is the best type of CRM system to monitor existing customers in your sales funnel. As its name suggests, the software analyses data allowing you to evaluate the effectiveness of your business operations. 

Through detailed reports and sales forecasting, generating leads and understanding customer behaviour becomes easier and more efficient. This CRM system allows you to utilise all available customer data in order to make the most informed decisions. 

What are the benefits of CRM?

CRM offers many unique benefits and advantages to businesses, through acquiring and analysing customer data. In this section, we’ll delve into more detail about how CRM could benefit your business. 

Centralised database 

CRM can benefit your team by providing a centralised database of information that is easily accessible to all employees. Improving communication between employees, you can deliver detailed and efficient support to all customers. This also aids you to build better relationships with customers and engage with them in a personalised way. 

Increased productivity 

CRM increases productivity by automating tasks that take up time. In addition to automated responses, the CRM can also analyse which responses are the most effective for certain customer groups – maximising your efficiency and growth. 

Improved customer experience 

Easily create a great customer experience by anticipating problems before they arise and tailoring your customer’s experience using previous communications. This lets you spend more time interacting with customers personally. With access to a customer record you can easily assess their position in the sales funnel and successfully retain them. 

Accurate sales forecasting 

Sales forecasting allows the whole Sales team to look through previous records and find patterns in data and tailored reports to support their sales. Using analytics, it’s also possible to predict future events to get ahead of trends. 

Reliable reporting 

Identify possible issues before they take effect and get automated reports at regular intervals to better understand behaviour and trends. Using CRM reports not only saves time that you can spend interacting with your customers but removes the risk of human error through incorrectly inputting data in a spreadsheet. Easily compare reports and gain more developed insights. 

How to choose the right CRM for your business

There are an endless number of features a CRM could have, so it’s important to know what you’re looking for. Use this list as a starting point to find the right CRM for you, based on your most important requirements. 

  • Essential integrations (accounting/ERP, marketing, payment etc.) 
  • Intuitive interface 
  • Automation tools 
  • Internal collaboration/communication tools 
  • Data analysis, tracking, and forecasting 

For many people working in niche industries, it can make more sense to invest in a specialised CRM. This is a CRM system that is designed to be used by businesses in a very specific industry to improve efficiency and growth. The Access Group offer CRMs for several industries, like Charity CRM, Recruitment CRM and Hospitality CRM, personalising the experience for both your business and your stakeholders.

Cloud-based CRM systems

A cloud-based CRM is software that is run on a server owned by the CRM provider and can be accessed through the internet. Sometimes this is referred to as SaaS or Software as a Service. Cloud-based software doesn’t need to be installed onto your computer, making set-up faster and easier. 

Another incentive to use a cloud-based CRM is the lack of hosting costs. As the CRM is accessed through a web browser, you’re not responsible for any hosting, security, or maintenance fees. 

How Access CRM can help

If you’re still wondering whether a cloud-based CRM solution is right for you, our Access CRM page contains more information that can help you identify which CRM is the right fit for your business. 

Access CRM helps you get more customers and maximise your customer lifetime value. With market-leading accounting and ERP integration, businesses can unlock unique sales analysis, predictive intelligence and efficiency gains across Marketing, Sales and Customer Service teams. 

Find out more about Access CRM and take a free no obligation free trial!

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