Customer Relationship Management is the phrase used to describe an integrated strategy used by companies to analyze, manage and improve relationships with their current and future customers. That strategy may include every interaction of any kind, by anyone in the company with that customer, collecting data on all points of contact between a customer and your company. So, it may include:

Technology, both in direct contact (websites, live chat, social media, etc.) and the software used to track, organize, automate and maintain the information gathered is a central part of CRM. The system gathers data from all parts of the company and is the basis for analysis.

Analysis of both the customer and that customer’s interaction (of any variety) with the company. So if your sales associate has a phone call with a customer, all the data derived from that call about the customer will be stored. Similarly, all sales data, interactions with anyone in the company, website contact, mail, etc. etc. are analyzed for information about that customer and his/her current and probable future buying habits, preferences and concerns.

Management of the relationships and interactions with the customer, using the accumulated data and historical information, acknowledges and attempts to manage the many interfaces the customer may have with the company. In a very simple example:

Mr. Smith looks at your website in search of a company to survey a piece of property. Interaction one.

He phones your company and first talks with whomever answers your phone, whether it’s a person or an automated menu. We’ll call this interaction two.

He is transferred to someone live, hopefully the person who can answer his question and move the sale along. We’ll call the live person Ms. Jones. Interaction three.

He decides your company is one of three he might use, so he emails Ms. Jones and asks for a bid. Interaction four.

What is CRM: Customer Relationship Management?Ms. Jones delegates someone to bid the job. Interaction five.

Mr. Smith agrees and a contract is dispatched to him. Interaction six.

Mr. Smith responds by signing the contact hiring your company to do the survey. Interaction seven.

Employees of your company complete the survey and send it to Mr. Smith. Interaction eight.

Your billing department sends Mr. Smith an invoice. Interaction nine.

Mr. Smith pays the invoice. Interaction ten.


So Mr. Smith had ten interactions with your company including your website, phone system, billing department and various other people during a perfectly simple sale with no problems. None of the communications were face-to-face.

Of course, the object of this exercise is customer retention. In the above example, Mr. Smith might have mentioned that he telephoned because he was unable to use the website to ask a question. Either Mr. Smith is not especially skilled at figuring out websites, or you have an issue to fix. Either way, its information you need to know.

As some point during this process, Smith would have likely divulged why he wanted the survey: he, or his employer, was selling the property, buying the property or he is a realtor ordering the survey on behalf of a client. Useful information to determine whether or not he is a future customer.

You would have significant information including his name, either a business or home address, phone number, gender, possibly age range and, with the information on why the survey was ordered, perhaps his occupation. Before CRM, none of the information gathered by each of your employees would have been shared with any other. With CRM, all of the data would be stored and analyzed for future marketing to, and interaction with, Mr. Smith.

What is CRM: Customer Relationship Management?In the process of gathering, automating and analyzing data on each of your customers, you learn who your target audiences are and how to reach them. It will inform not only your design, marketing and training, but alter your approach to communicating with some customers. It may change the tools you choose to contact customers and alter the way you use them.

It is a central educational tool for all of your employees. It is an indispensable aid to your sales force. For them, the more information about the customer in general and his or her interactions with the company the better the sales persons is able to customize the sales proposal to him or her.

The personalization of offerings to customers could have a downside you should be aware of: some customers could feel slighted by differing product offerings and leave you as a result. It is an aspect of the process you should consider.

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