Customer relationships make the business world go ’round, so formalising customer relationship management processes is fundamental—especially as companies grow past the size where founders know all clients by name, along with details of what they purchase and how your goods and services contribute to their success.

Fortunately, the technology exists to maintain that “personal touch” even as your company grows to serve hundreds or thousands of customers.

Video: What Is CRM?

What Is a CRM?

Customer relationship management (CRM) technology helps companies get maximum value from client interactions, regardless of which employee is reaching out. A CRM system takes information about your customers and plugs it into a shared platform that helps sales, marketing and customer service teams conduct business more effectively and, crucially, avoid the dreaded “please repeat your account number, last order and what you called about yesterday” drill.

CRM systems collect the minutia of customer accounts, such as billing, orders and service requests, and keep records of “touches” to track sales productivity and ensure a client isn’t being neglected. Automation, data analysis, reporting and trend identification features help companies learn more about their clientele, including support needs.

CRM systems are employed widely, from small businesses looking to grow to large global enterprises. In fact, GrandView Research estimates that 91% of companies with 10 or more employees have some sort of CRM in place, making this a $40 billion-plus business. Firms without the ability to closely manage customer relationships are at a disadvantage.


Asking whether you need CRM versus ERP is like asking whether you need marketing versus finance. A CRM system helps businesses improve sales, marketing and customer service operations. Enterprise resource planning (ERP) is complementary technology used to help companies improve other essential business functions, such as finance, HR, supply chain, inventory and more. CRM focuses on the customer, increasing satisfaction and sales, while ERP platforms focus on internal operations, driving efficiencies to attain peak levels of business performance.

Many ERP systems contain CRM modules or functionality, and there are also standalone CRM systems. While a business might adopt one or the other, when both are in place, the two should be integrated, with a common database. The combination of CRM and ERP allows, for example, the operations team to preview which customers are requesting an on-site visit, while finance can see pending deals and just how likely it is that a purchase order is imminent based on the account exec’s interactions and historical data.

History of CRM

Before CRM, companies used surveys and front-line workers to understand and document customer behaviours and needs, relying on spreadsheets to store information. But as statistical methods for analysing and gathering data became the norm, digital Rolodexes and early versions of contact management services displaced manual processes.

In the 1990s, the first CRM systems came to market. Shortly after, leaders in the ERP industry added CRM modules to their products to compete and broaden service capabilities.

While CRM began as on-premises software, today’s product landscape includes cloud-based applications. The transition from on-premises to cloud allows for richer feature sets, more flexibility for users and lower pricing. Companies can pay on a subscription basis versus a large capital outlay.

Today’s CRM systems are purchased either as standalone software or in conjunction with leading ERP platforms. Both versions integrate with other business intelligence systems. And, trends like deeper and broader integration, mobile applications, social media listening, machine learning, chatbots and industry-specific features are available and affordable for today’s CRM buyer.

CRM Components

Primary components of CRM systems include sales-force automation, reporting and analytics; forecasting, quote and order management; customer service and support; marketing automation; ecommerce; customer tracking; partner relationship management and mobile access.

CRM components support a company’s sales, marketing and customer service teams by gathering client data in real-time, organising it into an easily accessible database and sharing insights with employees across departments.

Types of CRM Systems

CRM systems fall into three broad categories: operational CRM, analytical CRM and collaborative CRM.

Operational CRM focuses on automating sales, marketing and service processes to create efficiencies at the operational level. Operational CRM includes functionality such as contact management, sales pipeline tracking and marketing automation for customers at different stages of the buying cycle.

Analytical CRM leverages data analysis to identify patterns in customer behaviour. Analytical CRM uses data mining to tailor marketing campaigns, build customer personas, improve sales outreach and forecasting and enhance customer service interactions.

Collaborative CRM takes all customer information and organises it in a shared database for stakeholders. Collaborative CRM gives customer-facing roles—such as sales, support, marketing and customer service—access to a log of all customer touchpoints, which helps inform new sales material, customer needs analysis and development of marketing objectives.

Although there is some crossover among CRM system types, each offers slightly different functionality.

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What Does a CRM System Do?

Modern CRMs may have hundreds of functions. But at a fundamental level, CRM systems rely on several standardised components to integrate and automate sales, marketing, customer support, ecommerce and partner relationships.

All CRM systems have a shared database containing information on a company’s customers. Employees use this information to review each account’s current status and see critical details such as contact person, revenue, existing contracts, sales notes and other related documents.

A CRM system offers a holistic view of the sales pipeline, giving teams actionable steps and recommendations through data analysis, reporting and forecasting. CRM systems also help identify and track key metrics on sales data, customer service activities and customer behaviour.

How Does CRM Work?

A CRM system gathers and organises all data related to customers, such as contact information, sales history, service records and more. After collating and analysing this data, the CRM system provides insights about customers, automates crucial business processes and builds better customer relationships. A CRM system shares vital information with stakeholders through a database tailored to suit a company’s needs.

CRM software relies on a variety of processes and functionality, such as contact management, lead scoring, sales team automation, marketing automation, data mining, sales forecasting, analytics and relationship management to accomplish these tasks.

Benefits of CRM

Adopting a CRM system delivers a number of compelling benefits, including:

  • Centralised, accessible storage of all customer data: CRM systems provide stakeholders with quick access to real-time data on customers, informing daily interactions and improving critical sales and marketing processes.
  • Automation of sales, marketing and customer service processes: CRM automates sales duties, such as invoicing and lead management; enhances marketing through automated email campaigns and customer categorisation; and supports customer service teams by tracking all customer touchpoints, suggesting solutions and personalising the customer experience.
  • Better customer insights, trend-spotting and forecasting: Analysing data across a wide range of touchpoints delivers a better view of customer behaviour and patterns, a deeper understanding of sales patterns and insights about where customer service could improve.
  • Increased profitability: CRM systems give teams the information needed to better serve customers, develop more efficient and effective sales outreach, improve marketing campaigns and thus reach higher levels of profitability.
  • Scalability: CRM systems scale as companies grow, enabling them to manage an ever-increasing number of customers—critical to long-term success.

How Do Businesses Use CRM?

Businesses use CRM systems across departments, including sales, marketing and customer service, to increase efficiency, customer satisfaction and profitability across a sales cycle. Individual departments have variations in how they use CRM, but together the components deliver a better end-to-end customer experience.

CRM systems are used by the sales team to manage and store contacts and sales opportunities, prioritise outreach, develop reports for management and leverage data to understand customer needs.

Marketing teams use CRM to build personalised customer experiences, segment customers into different target email lists, create niche advertisements to satisfy buyer groups and gather the information that informs buyer focus.

Customer service teams use CRM systems to track incoming customer complaints and share data on customer status, common issues and resolutions and patterns that emerge among different groups.

CRM Challenges

It’s possible to avoid most CRM challenges with proper planning, goal setting and the right implementation team. Still, it’s essential to understand the common problems you might run into when adopting CRM.

  • Cost: A full-featured CRM system comes at a cost, typically a monthly subscription fee. Additional fees for CRM implementation, integration, support and ongoing maintenance also apply.
  • Implementation and adoption timeline: It takes time to implement a new CRM system and get internal staff comfortable using the new technology.
  • Proper setup: A CRM system must be set up effectively from the beginning, so choose modules and functionality geared to support your customers’ needs, able to integrate with other major systems and designed with your business goals in mind. Otherwise, it may be difficult to see positive results.
  • Internal pushback: Don’t be surprised to receive pushback from management or employees, especially when switching systems. Make sure everyone understands the reasons for the change, get buy-in from each department and provide proper training.

CRM Examples

CRM systems can help companies from any industry build better customer relationships and scale more effectively. The examples below show how CRM is a powerful, sector-agnostic technology that helps organisations reach their goals.

  • 2pure: A UK distribution business that carries brands for the active lifestyle market, 2pure needed a new game plan to keep up with rapid business growth and support its brands across multiple websites. By leveraging CRM, the company managed marketing across its portfolio more effectively and increased the impact of sales. The result: a 95% increase in revenues without additional staff.
  • Alton Lane: Bespoke suit designer Alton Lane is known for personalisation and superior customer service. As an omnichannel retailer, in-store and online experiences need to reflect the quality- and customer-centric aesthetic across many different touchpoints. CRM helps Alton Lane deliver that experience — employees know a customer’s size, fabric preferences and favourite drink at showrooms from New York to Dallas, and online, where customers can track the intricate suit design and construction process.
  • NoaNet: Nonprofit telecommunications provider NoaNet’s mission is to bring quality, affordable Internet to underserved communities in Washington state. The company relies on its CRM system to expand its reach and build partnerships with the public utilities, phone companies and state agencies necessary to serve its 260,000 customers. CRM has been essential in the process, halving the time needed to issue quotes for B2B partners, reducing invoice and billing time and increasing customer satisfaction.

Who Uses CRM?

B2B and B2C companies with many customers and large sales pipelines

CRM is also useful for any company looking to keep customer data in one place so that all team members can access it. Internally, CRM systems offer benefits to a wide range of departments, including sales, finance, customer service, marketing, business development, recruiting and more.

How to Choose a CRM

A business should select a CRM system that supports its goals, fits the stage of the market and offers the required functionality. Companies may choose on-premises or cloud-based CRM, however, cloud CRM’s cost-savings and ease-of-use are quickly making this model the norm.

Rate CRM providers based on the features the platform provides; look for robust lead tracking and sales, marketing, ecommerce, reporting, social media and project management.

Finding a system that aligns with key business priorities and integrates with other applications, such as ERP systems, accounting software or HR programs, is another critical consideration.

CRM systems are often geared to a particular industry or business size, which helps with the decision-making process. Do your research, conduct an internal evaluation and request a product demonstration before purchase.

What is CRM Marketing?

CRM marketing describes the ways technology and tools offered in a CRM system assist marketing teams, such as developing more targeted, personalised campaigns based on data analysis and trend-spotting.

CRM marketing helps teams analyse all available information to create intelligent, repeatable systems that marketers use to spot customer needs and gauge campaign performance. The power of CRM marketing is in a more personal experience for customers and the ability to anticipate future behaviour.

Should a Small Business Use CRM?

CRM is a powerful tool for small businesses, helping them generate and track leads, organise data and accelerate the sales cycle. Small firms benefit via more data about customer purchasing trends, profit-margin analysis, more automated email marketing, better customer loyalty functionality and general customer support.

Cloud-based CRM systems minimise technology infrastructure and meet the budget demands of today’s small businesses. A robust CRM system is one of the most important elements for a small business focused on expansion.

How Do I Get Started With CRM?

First, select a CRM platform. Then decide how you’ll implement the new software. You may opt to rely on an internal team, but the software provider, a third-party vendor or a consultant may be called in to assist.

During implementation, existing customer data is transferred into the new CRM, integrating key sales and marketing processes such as custom emails, customer segments, pipeline stages and more. Finally, your staff is trained on the new system. Enhanced sales and marketing processes will quickly become part of daily operations.

When Does a CRM Start Producing Value?

If installed properly, a CRM system will begin providing value immediately. However, getting internal employees trained and achieving organisation-wide buy-in—particularly across sales and marketing teams—will expedite the process.

A CRM system forces organisations to replace old processes with new, more efficient strategies. The more a company buys into the new system, the better its opportunity to leverage the wealth of information and analysis CRM provides.

CRM Trends

Several trends define the future of CRM.

  • Customer experience is critical: Highly competitive marketplaces require that companies stand out in terms of customer experience. CRM helps companies acquire new clients; retain existing ones; and make sales, service and support processes a pleasurable, customer-centric experience. Companies rely on cutting-edge CRM systems to stand out in the marketplace and reach new customer experience levels.
  • Machine learning and eventually artificial intelligence: Machine learning and AI continue to integrate into CRM, assisting teams in customer segmentation, advertising and personalisation. ML/AI will also bring more automation to managing customer relationships, assist in customer communications via text and voice chatbots and bring deeper insights to forecasting with predictive analysis and data intelligence.
  • Hyper-personalisation: Enhanced CRM capabilities lead to highly focused marketing, sales, support and customer service interactions. Modern CRMs can chart a unique customer journey through access to a wide range of data, including social information, demographics, life events, relationships, conversation styles and more.
  • Self-service across the customer journey: Automation and ML/AI allow customers to move unassisted through more elements of the customer journey. Self-educating becomes the norm, minimising expensive agent-assisted engagements.
  • Mobile CRM: Mobile clients continue to gain in popularity as offsite and remote workers demand more intuitive mobile CRM interfaces, better integration across platforms and the freedom to access customer data from anywhere. Voice-enabled mobile apps will assist salespeople by cutting down on administrative tasks like email, updating customer logs, competitive research and setting reminders for follow-up meetings.
  • Customer integration across departments: Sharing customer data across the organisation becomes more critical as customers demand consistency in interactions and IT leaders work to break down information silos. The goal: A seamless customer experience.

NetSuite CRM

NetSuite’s Customer Relationship Management (CRM) software is the only cloud solution offering a real-time, holistic customer view across the entire customer lifecycle—from lead generation through opportunity, sales, fulfillment, renewal, cross-sell and support.