WHAT IS A CRM SYSTEM?
The guide for beginners
With customer relationship management (CRM for short), you place the needs of your customer at the center of all business processes. The basic goals are customer acquisition and customer retention.
For this purpose, you not only formulate an individual CRM strategy, but can also be supported by a suitable CRM system in customer-friendly process design. The following information will help you get started in the world of CRM and provide you with practical tips.
- What is a CRM system?
- What does CRM have to do with Customer Centricity?
- Who is a CRM suitable for?
- Advantages and goals of a CRM system
- What exactly do you use a CRM system for?
- What are its essential characteristics?
- GDPR in CRM
- CRM and email integration
- CRM tip: Don’t forget data quality
- The CRM Software Comparison
- How do you make the right choice?
- What are the technical types of CRM?
- How much does a CRM cost?
- Introduction of a customermanagement system
- The right use of your customerloyaltysystem
- Examples of CRM systems in use
- The most important things about CRM and CRM system at a glance
- Download free e-book “What is a CRM system?” here to gain an overview.
What is a CRM system?
What is your view of customer relationship management?
There is not the one and only definition, because Customer Relationship Management is not an isolated instrument, but flows into business processes as part of the company’s philosophy. Therefore, the respective structure of the company determines the individual CRM definition.
More about goals, forms & strategies in our blog article CRM definition.
Please click on the image to enlarge.
Five key CRM terms
1. Try a CRM definition
Customer relationship management is the alignment of a company with its customers. The basic goals are customer acquisition and customer loyalty. Therefore, Customer Relationship Management deals with designing business processes around existing and potential customers.
By collecting all relevant data with a CRM software,the marketing can be tailored exactly to the needs of customers and is therefore called relationship marketing. This management concept enables the increase of the company’s success.
When we talk about CRM, we usually mean one of these three points:
- CRM as software: Often referred to as a CRM system or CRM solution. It provides the technological basis for capturing, analyzing and presenting business interactions with customers or other relationships.
- CRM as a strategy: This refers to the conscious alignment of entrepreneurial processes to the customer or an optimal customer experience.
- CRM as a process: This refers to the extensive processes for customer alignment. These include not only the technological, but also strategic, systematic approaches of a company.
2. CRM software
Software supports the optimization of customer relationship management. It records all relevant customer data and transactions in a structured manner and thus relieves the burden on the various divisions that are related to customers. The software increases the efficiency of all areas and relationships. For example, CRM software can be used to create offers for individual customers or customer groups individually. Or the company increases customer loyalty by tailor-made service. Further and more detailed information can be found here:
Use in Sales
Use in Marketing
Use for service and IT
3. Introduction of a CRM system
The CRM implementation deals on the one hand with the implementation of the customer software in the company and on the other hand with the design of the customer management processes. The typical project is divided into seven phases: analysis of requirements, technical implementation, pilot operation, user training, reorganization, rollout and acceptance.
4. The important approaches
- Analytical CRM: Evaluation of data from the operational business on the basis of KPIs for the evaluation of requirements for the products.
- Operational CRM: The supporting function of the CRM system for the departments for establishing contacts and maintaining customer relationships.
- Collaborative CRM: Deals with cooperation within the company and with external partners.
- Communicative CRM: Controls all communication channels with focus on the customer.
- Social CRM: Extension of the classic customer relationship management through dialogue with users of social media channels, i.e. social networks such as Facebook, Twitter, LinkedIn, XING etc. (social media integration)
5. Relationship management with all stakeholders of a company = xRM
xRM (Any-Relationship-Management) is based on customer relationship management and as an advanced form deals with the design of relationships with all contacts of a company (customers, partners, suppliers, employees, machines). This includes all linked tasks such as projects, contracts, logs, inventory, etc.
More information about xRM
What does CRM have to do with Customer Centricity?
Customer Centricity is a core element of CRM and makes up a large part of the CRM strategy. It is about asking what the customer wants and what he might want in the future in order to develop products and services according to these wishes. This puts the customer at the center of the company and its actions.
CRM is the basis for centering: not only because all customer data is stored centrally here, but also because corresponding measures can be planned with it, tasks can be defined and, in part, executed automatically. In CRM, data on all customer touch points with the company and its offerings are recorded and evaluated. This provides an overview of the customer journey, from the very first contact to the purchase of a product or service. The more complete the documentation, the more precisely tailored or personalized content can be played out for the next contacts after the first contacts, so that the customer has many positive experiences with the company, products and services (= called customer experience management).
Who is a CRM suitable for?
Areas & Industries for the Use of a CRM Solution
Are you wondering if your employees need a tool at all? And if so, are everyone really?
Find out in our blog article Who needs CRM? , which divisions benefit from such software.
Here is an overview:
CRM Tool for Teams
- Event management
- Finance & Accounting
- Employee development
- Public administration
- Service & IT
- Central management
CRM Tool for Industries
CRM tool for company sizes
- Groups & large companies
- Medium-sized companies
- Small Companies & Start-ups
Advantages and goals of a CRM system
Why you use a CRM system for in your company?
What goals does it bring you closer to?
A good system offers numerous advantages for you and your employees. They promote transparent, team-oriented work, increase the efficiency of your various departments, and provide metrics for analysis and conclusions. These are all small goals on the way to bind existing customers more closely to you and to generate new customers. At the end of this journey, the goal is to create all-around positive experiences with the customer engagement system (= Customer Experience).
Read more about the benefits of a CRM system s in our blog article.
What exactly do you use a CRM system for?
In practice, you use a CRM system, especially with the aim of being able to track and optimally design the interactions with your customers and prospects. This includes not only the storage and organization of customer data, but also the design of optimal business processes – tailored to a satisfactory customer experience. In addition to customer relationships, you also manage any other business relationship via a CRM program – or in this case an appropriate xRM system (Any Relationship Management) – whether with suppliers, dealers, partners or even your employees (keyword B2E).
Track interactions over 360°
In addition to contact details, you also store service requests and customer preferences. They record phone calls, e-mails, meetings and presentations and place notes, files, appointments, contracts, products and other planning directly in the electronic customer file. Today, 90 percent of the communication is via e-mail clients. That’s why 100% email integration into the customer management system is extremely important.
This gives your employees the opportunity to quickly access all current information and letter or e-mail templates as well as forms etc. at any time in order to advise your customers individually or to provide them with relevant content, for example via e-mail marketing. Every user benefits from a light, manageable workflow as your company’s customer base and profits grow. This is an enormous relief in the area of operational customer relationship management.
Fluid processes and valuable insights
With practical overviews, helpful resubmissions and cross-departmental workflows, your sales department benefits immensely from the CRM system. Thanks to the follow-up function, he no longer misses any opportunities. Extensive knowledge of your customers supports the perception of opportunities, also in up- and cross-selling or in key account management. Thanks to CRM, sales management systematically gains insights into day-to-day business, optimizes the efficiency of processes and keeps an eye on figures and goals.
In marketing, your employees recognize your potential customers exactly and address them unerringly. Both departments actively edit CRM campaigns with phone and email campaigns through campaign management.
The quality of the service also increases, through faster response times and extensive background information on every customer inquiry as well as access to know-how for customers as self-service. Thanks to the ticket system and time recording, not only is the organization easier, but the department head also keeps an eye on current topics and the efficiency of the processes.
Department heads and top management benefit from the customer data in the system. Dashboards and reports support them in managing the company.
What are its essential characteristics?
A CRM system brings versatile features and features that support your business at a variety of stages of the business process.
Some properties serve as the basis for central and transparent communication within the company. Others provide targeted support for sales, marketing and service as well as their exchange.
Read in detail how the software supports you and your employees in the blog article Properties of a CRM system.
Here is a rough overview of the typical functions
Typical functions of a CRM system
- GDPR-compliant contact management
- Cross-departmental teamwork
- Higher productivity and efficiency
- Modern sales management
- Accurate sales forecasts and corporate management
- Reliable reporting capabilities
- Better sales metrics
- Higher satisfaction and customer loyalty
- Better marketing ROI
- Valuable suggestions for products and services
GDPR in CRM
When it comes to data collection and processing, there is no way around the legal provisions of the General Data Protection Regulation (GDPR). The observance of all requirements is not even trivial. Accordingly, it is of great advantage for you and your employees if your CRM system already has the most important basic functions for compliance with the GDPR. This saves laborious training of the individual employees and, last but not least, high fines for incorrect data processing. Read more about what you need to consider when considering GDPR in CRM and what the 100% GDPR-compliant GEDYS IntraWare CRM offers you.
CRM and email integration
An important integration is that between CRM and email. In daily business, e-mail has long since established itself as the most widely used medium for communication. Accordingly, you can easily imagine the advantages of the e-mail and CRM systems working together seamlessly. Receive a 360° overview of the sender with all the data your CRM system has to offer in the e-mail program. Or create a new contact in CRM directly from the e-mail. With the email integration “BusinessMail®” this is easily possible – fewer clicks and faster work.
CRM tip: Don’t forget data quality
The functionality of your CRM system is largely based on the processing of your business data. In order to achieve reliable and accurate results, not only the quality of the CRM processes,but also the quality of the data must be right.
Read more about why data quality is so important and how to get it in our blog“You need more data quality in CRM!”
The CRM Software Comparison
How do you make the right choice?
For the CRM selection, it’s important to think about what your business needs. This means that you should look at your processes, structures and business processes and determine where functions of a software are helpful and which functions you can do without. Think of the important questions: Do we want to use an on-premise or cloud solution? And if so, as a software-as-a-service? From there, it will be much easier to define your must haves and thus exclude or exclude providers.
Brief comparison of some advantages and disadvantages
|Cloud based / SaaS||Server Client / On Premise|
|Benefits||Fast setup||Internal data sovereignty|
|Hardly any investment at the beginning||Offline and online use|
|High flexibility to users, modules, configuration, runtime etc.||Individual adaptation feasible = customizing|
|Always current software version|
|Disadvantages||Just online = via browser||Internal IT necessary|
|Data sovereignty lies externally with the provider||IT staff or external service to operation and maintenance|
|Initially high investment in soft- and hardware|
Valuable tips for CRM comparison
Our blog article 9 Questions about CRM Comparison will help you ask yourself the right questions before you start selecting a provider.
Note: A good customer system integrates into your existing IT infrastructure and connects to your ERP system in the best possible way.
Checklist for your CRM selection
Use our checklist CRM Requirements Overviewto compare the functions of different providers and define your own requirements for the appropriate software in a requirement specification.
What are the technical types of CRM?
A software for managing your customer relationships is basically based on a central CRM database in which information and documents of your customers and prospects are stored. These can then usually be accessed at any time, from any location and by any employee. Where the data is stored and how it is accessed makes some differences.
Cloud-based CRM (SaaS)
A cloud CRM system – i.e. a CRM as SaaS (Software as a Service) – is characterized by its high flexibility and low effort. Software and databases operate in the cloud, providing high performance and storage capacity with a stable Internet connection. Hardware, operating and infrastructure costs as well as maintenance costs are all on the side of the provider and are transparently included in the rental price. Without further technology, all employees can access the system from any location via a simple browser. Through practical licensing models, the number of users to be financed can be slightly increased or reduced, which is particularly advantageous for growing companies. Modern hosting in Germany also ensures the necessary data security.
Server-Client = On-Premises
With the on-premises model, the user buys the CRM software and operates it independently in the in-house or specially rented data center. The concern but also the control of hardware, operation, infrastructure and maintenance work lies here all with the user himself, for which usually additional IT personnel is hired. What on-premises models lose in terms of flexibility is usually made up for in the customization options – customizing. Accordingly, they are suitable for companies that have particularly individual requirements for their CRM software.
You can read more about whether cloud CRM or on-premises in our blog article “Better Cloud or On-Prem?”.
What is a CRM app?
A CRM app for mobile devices is suitable for all companies that have employees in the field. They can access CRM data and functions from anywhere at any time without having to have a desktop with them. While a regular connection to the Internet makes sense for the data to be up-to-date, it can also be accessed offline – changes are then immediately synchronizedwith the next Internet connection. Dictation functions or route planners ensure optimum effectiveness even on the go.
Integrations and interfaces
Integrations and interfaces allow CRM systems to access uniform data sets or transfer data from one system to another. This is of great importance when it comes to central and transparent business processes. The most important link is certainly the one with the ERP system,this is about very basic data on customers, products, payment transactions, etc. But also at other process points such as the Service organization, the Preparation of quotations, Sales management, Route and route planning or simply the Telephone connection pays off interfaces and integrations for an efficient way of working.
How much does a CRM cost?
The cost of a CRM system depends heavily on the choice of technical basis and the degree of individualization of the functions. From free offers with the usual basic functions and for small teams to variants with high individualization, you will find a variety of options on the market, so that there should be something for every budget.
The GEDYS IntraWare CRM freeware is suitable for all Notes Domino users with small teams who want a quick start to successful customer management. The free basic CRM for local installation for up to 5 licenses is available in 5 minutes and without runtime limit.
The CRM system from the cloud has decisive advantages and is suitable for companies that have less individual needs for their CRM software and want to start quickly. You save yourself extensive investments in the IT landscape and personnel, because the hosting can usually be rented directly with it. Thus, the CRM costs are particularly clear and the service can be easily extended with maintenance services or additional modules if required.
For example, you can rent the GEDYS IntraWare Cloud CRM with all basic functions from as early as €59 per month per user. If required, you can expand modules, configure individually, receive training or other services such as maintenance and support.
For Sei, no off-the-shelf CRM system is enough? The optimal solution for your company sometimes has to be tailor-made. In case of doubt, this may cost you a little more, but it pays off. Because tailor-made CRM means optimal efficiency in your processes and saved time and nerves for your employees.
Whether as an in-house or web solution – at GEDYS IntraWare we are happy about every challenge and create the perfect solutions for every business requirement in close cooperation with our customers. Depending on the special customizing of our software, you will receive your individual CRM solution from as little as €30,000.
Introduction of a customer
Once the selection of a possible cloud-based CRM system has been made, a competent consultant is ideally at your side. Nevertheless, there are some pitfalls in the process of software introduction. Read our blog article The 7 Phases of Introducing a CRM Systemto learn what to expect and what to look out for.
Free e-books on the topic
- For more information, visit our CRM adoptionwiki page.
- Or in our detailed e-book In 15 stages to CRM – From the CRM idea to the implementation.
The right use of your customer
Dos & Don’ts after CRM introduction
1. DON’T: See Customer Relationship Management only as software
Don’t forget that CRM isn’t just about integrating software into your business, it’s also about implementing your CRM strategy.
2. DO: Involve employees
The CRM project stands and falls with your employees. Involve your employees’ input, make sure employees are aware of the benefits of CRM and receive the appropriate training to deal with the new software system.
3. DO: Evaluate customer system regularly
A CRM lives and grows with your company. Therefore, it is important to periodically review CRM system and strategy with regard to processes, users and technology and, if necessary, to consider updates.
4. DON’T: Expect ROI directly
The ROI of your CRM system will not occur overnight. This is a process that takes time. However, before the introduction, consider which data you can use to verify and determine the ROI (e.g. customer satisfaction). You will see that success will come.
5. DO: Communication!!
Maintain open communication with your employees and the CRM team. If difficulties or suggestions for improvement are not heard and discussed, CRM will not be able to work optimally for your business and will not bring the success you desire.
Examples of CRM systems in use
Please click on the logos to go to the reference stories.
The most important things about CRM and CRM system at a glance
- CRM Definition: Customer Relationship Management, or CRM for short, stands for the alignment of entrepreneurial processes with the customer. It includes a comprehensive view of all customer data, interactions and touchpoints. In addition to the CRM strategy, CRM software provides technical support in the implementation of these goals.
- CRM suitability: The type of need for CRM systems differs in size and alignment from individual teams, industries, and company sizes. In addition, CRM software can also be helpful for xRM and manage all conceivable business relationships in addition to customer relationships.
- CRM Benefits:In addition to better business relationships, CRM drives productivity, customer retention, business forecasting, sales and marketing activities, and service performance.
- CRM forms: Whether in-house, from the cloud or as a mobile app. Depending on the requirements of the individual company, different technical forms of CRM systems are suitable.
- CRM networking: It is absolutely important to realize that linking the CRM system with the rest of the IT landscape via interfaces and integrations is absolutely conducive to the full impact of CRM – from ERP to email integration.
- CRM selection: First of all, think carefully about what you need and use these basic criteria to search specifically for a suitable CRM provider.
- CRM implementation: Take a step-by-step approach to the implementation of your CRM system and ensure that all employees are on board and aware of the CRM benefits.
Download free e-book “What is a CRM system?” here to gain an overview.
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