What is CRM (Customer Relationship Management)?
– CRM stands for customer relationship management. It refers both to the set of rules and practices a company uses when dealing with customers and to the software systems that keep customer information and interactions organized.
– In practice CRM covers every external touchpoint: marketing, sales, customer service, reporting and analytics, and post‑purchase follow‑up. The aim is to create consistently positive customer experiences that encourage repeat business.
Core elements
– Customer data: contact details, purchase history, previous support interactions.
– Interaction channels: website, email, phone, mailings, social media.
– Processes and automation: workflows that route leads, trigger emails, or create support tickets.
– Analytics and dashboards: reports that show campaign performance, sales forecasts, and customer trends.
Why companies use CRM (benefits)
– Centralizes customer information for easy access.
– Reduces friction for customers (fewer repeats of the same information).
– Speeds sales and service workflows through automation.
– Improves retention by enabling personalized outreach.
– Supports measurement and data‑driven decisions with dashboards and analytics.
CRM technology and software
– CRM software aggregates customer records and interaction histories so staff can find context quickly.
– Typical functions include contact management, activity tracking, reporting, marketing automation, and customer service ticketing.
– Cloud CRM: hosted by the vendor and accessed over the internet. Pros: quick deployment, real‑time access for field staff, lower local IT burden. Cons: vendor dependence, possible migration headaches, and sometimes higher ongoing fees.
– On‑premises / self‑hosted CRM: installed on the company’s own servers. Pros: more direct control of data and custom infrastructure. Cons: heavier IT overhead and longer setup.
Human management and AI
– Software needs good data hygiene and human judgment to be effective: remove duplicates, fill missing fields, and keep records current.
– Artificial intelligence (AI) is being embedded in CRM to accelerate sales cycles, refine pricing and distribution, reduce support costs, improve resolution rates, and detect fraud. Leading CRM vendors are beginning to add AI features, but many applications are still early in adoption.
Fast facts (market context)
– The CRM market was estimated at about $84.3 billion in 2024, with a projected compound annual growth rate (CAGR) of roughly 6% through 2028, reaching an estimated ~$103.6 billion.
– Large vendors in the space include Salesforce, Microsoft, SAP, Oracle, and Adobe Systems.
Common focus areas (types of CRM)
– Sales automation: manage leads, opportunities, pipeline and forecasts.
– Marketing automation: segment lists, run campaigns, and track responses.
– Service/support: manage tickets, complaints, returns, and knowledge bases.
Note: some vendor platforms combine these; others specialize in one area.
Costs — what to expect
– Pricing depends on business size, number of users, feature set, and vendor.
– Setup and implementation can cost thousands of dollars.
– Subscription pricing is commonly billed per user per month and can range roughly from $12 to $300+ per user per month depending on complexity.
How businesses choose a CRM (recommended approach)
1. Define objectives: list what you want the CRM to achieve (e.g., shorten sales cycle, improve support response time, centralize contact data).
2. Set a budget: include first‑year implementation and ongoing subscription costs.
3. Prioritize features: choose the features you will actually use rather than all available add‑ons.
4. Trial and compare: use demos and free trials; test common workflows.
5. Check integrations: ensure it connects with your email, ERP, e‑commerce, or other systems.
6.