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How Does CRM Work?

CRM System

Customer Relationship Management (CRM) is a critical activity for any organization that deals with users, clients, or consumers while delivering goods or services. But how does CRM work? This article will look at various aspects of how customer relationship management functions at both conceptual and practical levels.

The Conceptual Basis for CRM

As its name suggests, CRM is all about managing relationships with your customers — be they users of your network or software platform, buyers at your depot or store, or clients of your service-based business. Building and nurturing relationships with these people makes it easier to retain their interest, keep them loyal to your brand, generate revenue, and create a more memorable customer experience.

Experience and personalization are critical to success in a market populated by so many similar goods and services that it’s often difficult to distinguish between brands. How your brand treats the customer becomes the differentiator in this case — and customer relationship management is the critical foundation for that.

The basic principle of CRM is to put the customer first and have them front and center of your activities and interactions. This requires you to look at every transaction through the consumer’s eyes and develop processes and pipelines that make the customer’s experience of your brand more memorable and positive and add value to every interaction they have with your business.

Using this approach, you can keep your existing customers happy and attract new ones. CRM also makes it possible to measure the value of those customers contributing to your enterprise and prioritizing your dealings with them. For example, a certain subset of your consumers may have frequent questions or complaints that take up valuable support time. Using CRM techniques in dealing with these matters may suggest avenues for automating your responses or setting up a knowledge base of Frequently Asked Questions and customer self-service mechanisms.

How CRM Works in Practice

Customer Relationship Management works in tandem with the customer life-cycle and typically involves sales and marketing activities and customer support. The cycle of CRM covers the processes you use to make customers aware of what your brand has to offer, deliver it to them, make sure that you can deliver continuously as existing customers become repeat consumers, and provide any help or guidance they require along the way.

Creating Awareness of Your Brand 

To create brand awareness, marketers must study the landscape to identify their target audience. This includes demographic data, perceived needs and interests, pain points, and preferred channels for interaction and engagement.

As a result of this research, it’s usual practice to create “marketing personas” — fictional characters with traits that typify the nature of a particular segment of your target audience, complete with names and personal details. These personas enable your marketing team to craft promotions and communication specifically tailored to each audience segment.

You can then craft marketing campaigns that speak to each of your target audiences and strategies for acquiring leads within each group. A/B testing (where you launch simultaneous campaigns with different approaches or messaging) and your CRM system’s marketing automation tools can help isolate which methods are most successful.

Acquiring Leads

Leads or potential customers can come from several avenues, including phone calls, email promotions, social media, in-person events or exhibitions, and your company website or blog. Identifying and managing these opportunities may involve both your sales and marketing teams. 

A Customer Relationship Management approach enables you to establish which person or department should take responsibility for flagging and logging each lead, routing each lead for further action, and following it up.

Converting Leads into Consumers

Before a lead becomes a paying customer, you’ll have to put in the effort to make them more aware of what your business has to offer and provide opportunities for them to engage with your brand. 

This lead nurturing process is largely a trust or confidence-building exercise. You can help along by introducing leads to resources, case studies, and other evidence to sway their opinion in favor of what you have to offer. Your CRM system should contain information from past successful sales, which can provide criteria to assist your representatives in identifying opportunities that have the highest probability of becoming sales.

Providing Help and Support

The CRM cycle continues beyond the point where a potential lead converts into an actual customer. Help, support, and guidance throughout the customer journey can often spell the difference between a one-off sale and a long-term and loyal consumer.

Inadequate customer service can drive consumers away and tarnish your brand reputation. Conversely, a high level of customer support can engender loyalty to your brand and promote customer retention. 

A good CRM system will provide your support staff with the information and resources needed to deliver timely and effective service to your consumers, wherever they are and whenever they need it.


One of the benefits of having an existing customer base is the opportunity to “upsell” — promote and sell enhanced or higher grade products and services based on their previous consumption patterns and their perceived needs or desires. These upgrades are typical of more expensive products or services, which means more revenue for you.

Your CRM database can enable you to organize your consumers into smart lists based on similarities in their purchasing histories. This, in turn, enables you to craft personalized recommendations for enhanced products.

If you provide a service, following up with your consumers with regular check-in calls or messages can reveal how they’re feeling about their current state and suggest ways to improve or upgrade the service offering.

How CRM Software Works

Though Customer Relationship Management is a business process at its heart, it currently benefits from the use of enhanced technologies. We’ve already alluded to this in some respects by talking of a “CRM system” or database and various tools for automation. In fact, if you mention CRM in many circles, you’ll find that it’s synonymous with software.

How does CRM software work? The systems most widely in use can be broken down into a few core components.

A central database forms the foundation of most CRM software. This includes enterprise-wide information on all consumers, such as contact data, demographics, transaction histories, service records, and call logs. Having this information in a single location eliminates departmental silos and the hoarding of data and enables easier access and collaboration between your enterprise’s various divisions.

Tools for marketing and sales automation ease the tasks of lead nurturing and promotion, providing, for example, templates for targeted and personalized email and messaging.

A customer service or support module typically provides a ticketing system for logging requests and automated tools for a response. A knowledge base and customer self-service functionality may also be part of the package.

CRM with Salesforce

Another term often taken as synonymous with CRM is Salesforce, the world’s most famous customer relationship management platform. But how does Salesforce work?

The Salesforce CRM platform is available in the form of Software-as-a-Service (SaaS) from the cloud. Subscribers pay a regular fee and avoid the hassle of buying and maintaining on-site hardware, software licenses, and infrastructure. Salesforce CRM also comes with mobile apps for both Android and iOS devices. The platform handles real-time data with a Feed First function which allows users to view key information.

As you’d expect from a major cloud offering, Salesforce CRM offers several different flavors. Among them are Salesforce Service Cloud, a customer support platform with features like case tracking and a social network plug-in for conversation and analytics. Others include Salesforce Health Cloud, a dedicated CRM platform for hospitals and healthcare institutions; Salesforce IoT Cloud, a real-time data gathering and response platform for sensors, IoT devices, applications, and websites; and Salesforce App Cloud, a development platform for custom apps. 

Salesforce Service Cloud CRM
salesforce managed services
Salesforce Service Cloud CRM

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