What is a CRM simply explained?

A suitable solution is needed to eliminate chaos in your own company. This makes it possible to regulate business formalities and activities. With CRM you can make everything clear. CRM refers to customer relationship management. It is translated from English as customer relationship management. The term refers to the management and maintenance of customer relationships. We are talking about the relationships between the service provider and its existing and potential customers.

But not everyone understands what a CRM system is. We explain the term, its importance and functions in our article. If you realise the need for a CRM system, you can integrate it into your own business. It helps the service provider to acquire new customers.

CRM system: What is it and what does it mean for the company?

This is specially developed software for regulating and organising relationships within the company team and with customers. Customer loyalty is the basis for successful business. The importance of the CRM system is understood in three ways:

• As a technology, CRM records, analyses and provides the available information.
• The CRM solution is seen as a strategy when it comes to consciously shaping relationships with potential and existing customers.
• As a process, CRM refers to the maintenance and management of relationships.

As far as CRM system definition is concerned, it is a necessary tool for contact and sales management. It is used for the purpose of improving productivity and other activities. Business relationships (sales, marketing, support) are considered the primary goal of CRM systems. They contribute to satisfying customer needs, increasing purchase frequency through up-selling and cross-selling, strengthening relationships with existing customers, acquiring new customers and increasing conversion. The systems help to manage customer relationships in every interaction with all departments.

There are several different approaches to customer relationship management. They can be used in relation to the size of the company and its business model. The most important approaches are

• Operational CRM serves as a basis for ongoing communication with customers and is particularly suitable for sales, support and marketing.
• Collaborative CRM focuses on cooperation between employees and with external partners.
• Analytical CRM ensures that the company's relationships are regulated and assessed on the basis of key figures. The data from the operational business is analysed to better understand the behaviour and preferences of buyers.
• Communicative CRM focusses on customer orientation and customer service. The software is used to control all communication channels between the company and its customers.
• Social CRM has to do with the introduction of social media channels into the CRM system. Traditional CRM is expanded to include social interactions, reviews and discussions.

Those who use CRM can achieve various goals at the same time. Customers recognise the service provider's efforts to cleanly manage how important long-term relationships are to them. In this way, a loyal customer base is built up that generates a large number of new purchases.

How does the CRM software work?

We have already answered the question *What is a CRM system? In this section you will learn about the functionality of the programme. This is an innovative solution for recording customer data. This includes various contacts (e-mails, calls, profiles in social networks). All information about company activities is automatically stored and structured, providing a comprehensive view of the person and their company. This information is available to every sales employee. This enables the service provider to build good, long-term relationships with customers. Thanks to the CRM software, the management of customer relationships is significantly improved. As up-to-date information is always available and interactions with the company are monitored, a better understanding is made possible. All the questions that have been asked, service requests, cases and contacts are always at hand. This means that all contacts are based on current information, are personalised and relevant. It can also be used to add notes, plan follow-up appointments and organise further necessary steps. This is a tool for better understanding customers. This allows the company to create new orders with existing customers.

Who is CRM suitable for?

Not sure if your employees need this software? First explain to them what CRM system is and how it can improve the business. You don't necessarily have to have a large corporation. CRM software can be used by small, medium-sized, fast-growing companies as well as by solid, successful companies. Simple CRM for small businesses can contribute significantly to the growth of your business.

Here we briefly explain for which tasks and industries it is used. This solution is beneficial for other departments:

• The CRM system ensures structured customer acquisition and automates administrative processes, which reduces manual effort.
• Marketing uses the data to create precise forecasts.
• Customer service always has an overview of the entire customer history and can therefore find better solutions or make suggestions.
• In the HR department, CRM is an indispensable tool that records potential employees and interesting applicants.

CRM solutions offer enormous flexibility. That is why they are suitable for various companies that are closely involved with specific customer interests. Individual companies with a few customers can manage without CRM. If there are a large number of customers, the CRM system must be introduced and this software is gaining in importance and is being used more and more frequently in procurement, event management, service & IT, sales and recruiting. It is used to manage customer accounts, orders and transactions and to personalise the shopping experience. Today, the automotive industry, logistics, retail, mechanical engineering, finance and service companies cannot do without CRM solutions.

Technical types of CRM

CRM solutions currently differ depending on the storage and access location. There are 3 different types:

• Local (classic) CRM system that is installed on the PC. It is suitable for individual companies, as it makes teamwork impossible.
• Cloud-based CRM software (SaaS) stores the data online. This means it can be accessed from any location. This is a flexible and efficient tool that enables storage capacity and high performance with a stable internet connection. Expertise is not required to set up the SaaS systems. The system can be accessed via a simple browser. The number of users can be increased or decreased as required. The provider assumes responsibility for the hardware, infrastructure, operation and maintenance. The provider has to deal with all the associated costs. Cloud-based solutions are particularly suitable for small and medium-sized companies. They have one disadvantage: they are not accessible in the event of a power or network failure.
• On-premise/client-server CRM is provided by the user and is located on the company's servers. This means that the user has complete control over the data and makes the necessary customisations. Data security and maintenance of the technical infrastructure are then also part of their expertise. Setting up and customising on-premise CRM requires specialist knowledge. This is why the help of an external service provider is required. This is a good option for large companies with more than 50 users.

The customer decides on the most suitable solution to increase sales. For example, you can select Espo CRM.

7 Main functions that the CRM system should definitely offer

Management and maintenance of customer data

The CRM software structures the data and displays it clearly. The team can always access the latest customer interactions and coordinate their own activities accordingly. Managing the complete customer database is very easy with CRM.

Communication history

To ensure long-term customer relationships, the parties involved should have an overview of the entire history. All conversations can be easily entered into the system. User agreements are stored in one place. This guarantees that nothing is ignored.

Collective cooperation

Good customer relations in the department and throughout the company are very important. The CRM system helps to increase customer satisfaction and loyalty. The ongoing processes and individual communication history are managed centrally. So you always have an eye on them.

Calendar and task managementt

The deadlines and tasks are linked, which enables consistent implementation. This is very important for day-to-day business. This makes it possible to keep an eye on all deadlines and avoid duplication of work.

Organisation of the sales pipeline

A well-organised CRM system ensures that sales staff are properly prepared for the conversation with the potential lead. If the main focus of the order is known, the needs are quickly addressed. The CRM solution is a good option when it comes to customer acquisition and recognising the greatest sales opportunities.

Integration of external applications

If your company is overburdened with standard CRM systems, you can reduce them. External programmes require more time, nerves and costs. It is then worth realistically evaluating what your software can do and selecting the solution that best suits your processes.

Information security and GDPR-compliant data storage

The issue of data protection is frequently discussed. The loss of information can have legal and economic consequences. To avoid this, sufficient data security should be considered. The location of the CRM software server should be well secured. It is necessary to carry out backups regularly.

Costs for CRM systems

Now that we have familiarised ourselves with the CRM system definition, we should also find out what a CRM system costs. The price of the software depends on the functions and customisation options that CRM offers. This allows both small and large companies to choose the most suitable option.

SaaS-CRM

The cloud-based solution enables a rapid start, but cannot realise the customer's individual needs. You can save the costs for the IT landscape and personnel, but only pay the monthly rent. SaaS CRM does not require such a large investment and can be easily expanded with additional modules and maintenance services if required.

Depending on the selected brand of CRM, you should pay a certain monthly rental fee per user. You then have a CRM with basic functions. You can make individual configurations and extensions. Maintenance and training are also provided if required.

On-Premise CRM

If you are looking for a customised solution for your company, opt for Server Client. This solution enables efficient process handling and saves time and effort. The cost of on-premise CRM depends on the number of users, the range of functions, the customisations, the IT infrastructure, the capacities and the IT department. However, server-client CRM can only be integrated and maintained with the help of a specialist, e.g. an e-shop agency. Although the costs of purchasing this CRM software are high, the follow-up costs are lower. It is therefore fair to say that this investment pays for itself after some time.

FAQ

What are common CRM systems?

Salesforce, Freshsales, HubSpot, Pipedrive, Microsoft Dynamics, SugarCRM, EspoCRM, Nible, Streak sind besonders beliebt.

Why do I need a CRM?

CRM helps to plan and manage time, always provides up-to-date information and is a secure storage location.

What is the aim of CRM?

The aim of CRM is to strengthen customer relationships, increase efficiency and acquire new customers.

Which CRMs are available?

There are local, cloud-based and on-premise CRMs.