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What Is Customer Relationship Management (CRM)? Tools, Types, Strategy, Benefits & Features

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Customer-Relationship-Management -Tools

Customer Relationship Management Tools

Customer Relationship Management Tools-Customer Relationship Management (CRM) is often referred to as a process, strategy, or software/technology that enables organizations to manage relationships with their customers, vendors, and suppliers.

The buyer’s journey has evolved through the years and running a business today has become more complex than ever. Business owners and salespeople must keep in touch with their customers, follow-up with prospects, identify upselling and cross-selling opportunities, and initiate customer retention programs while ensuring that the company revenue continues to increase.

CRM enables business owners and salespeople by helping them streamline the sales process, improve interdepartmental collaboration, and maintain business relationships.

In this article, we will look at the concept of CRM, different tools and types of CRM software, and the basic terminology used in CRM. We will also discuss essential CRM features, benefits, steps to create a strategy and how to go about choosing the right CRM for your organization.

What Is Customer Relationship Management (CRM)?

Customer Relationship Management (CRM) is often referred to as a process, strategy, or software/technology that enables organizations to manage relationships with their customers, vendors, and suppliers.

In this article, we will look at CRM as a technology that helps businesses maintain customer data, track customer interactions, and improve customer relationships.

A CRM software system performs the following activities:

  1. Collects customer data from multiple sources and applications and stores it in a centralized location
  2. Automates repetitive sales, marketing, and customer service processes
  3. Tracks prospects and customers through their purchase journey
  4. Identifies upselling and cross-selling opportunities
  5. Promotes interdepartmental collaboration

What Are the Types of CRM Software?

Representation of the Types of CRM Software

Holistically, we can segregate CRM tools in two categories, viz.

  1. Based on installation/implementation
  2. Based on functionality

Let’s look at each of them in brief:

1. CRM Software Based on the Type of Installation

We can further segregate this type of category into two types:

  1. On-premise CRM Software: Companies that handle sensitive customer information such as financial or healthcare institutions prefer on-premise CRM software. These systems incur a hefty upfront investment as it includes infrastructure as well as software development costs.
    These CRM systems are rigid in terms of functionality as adding a new feature is often expensive. Further, the organization itself must take care of data maintenance, security, and disaster recovery plans. Organizations can outsource these services to a third-party vendor, but they incur additional costs depending on your requirements.
  2. Cloud-based CRM Software: A business can use web-based/cloud CRM at a monthly recurring cost.
    Compared to on-premise CRMs, cloud CRMs are more flexible and budget-friendly as these CRMs are device-agnostic, and the service provider offers maintenance and data security.
    These CRMs take a one-size-fits-all approach. Therefore, customizations may not always be possible. And since your data is stored at the vendor’s servers, you are at the mercy of the vendor in case of a server outage.

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Article Credit: MTA

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