How CRM helps you truly understand your customers

The customer is king: This premise has always dominated companies’ behavior. Yet digitization has changed the communication with customers. It has enhanced the face-to-face exchange through digital opportunities that help create the best possible customer relationship management. These technical solutions also require companies to rethink customer centricity. Using CRM solutions, they can manage their customer relationships from a centralized location, identify needs reliably based on analyses and customize products and services to meet the individual requirements of their customers.

In addition to customer satisfaction, CRM systems also drive automation processes and strengthen the synergies between marketing, sales and customer service.

What is CRM?

Customer relationship management (CRM, for short) refers to the customer-oriented alignment of business processes. Customer relationship management primarily involves the strategic and operational areas of marketing, sales and customer support. CRM systems that map customer management from a technical perspective by collecting, storing and processing data are an integral part of this.

Key points

  • Successful customer relationship management puts the customer at the center of business decisions.
  • CRM systems create effective synergies between marketing, sales and customer service.
  • Customer data analysis makes personalized marketing, empathic customer support, and highly targeted products possible.
  • Automated processes save resources, allowing employees to work in even closer proximity to the customer.


What constitutes a good CRM system?

With the shift of the point of sale to the internet, customers are initially placed in the background. This distance ensures that technical solutions are needed to bring customers back to the heart of entrepreneurial activity. A CRM system ensures efficient and expert customer support through the targeted collection of customer information. The system uses real-time data to capture customers’ essential steps on their customer journeys and assembles them into customer profiles. Based on this data, companies can individualize marketing campaigns, customer communication and complaint management.

The CRM system’s 360° view makes sure that sales, customer service and marketing always have the same customer information. The integration of various touchpoints gives customers a wide variety of contact points with the company and provides more revenue potential. With the help of intelligent technologies, companies can design the customer journey consistently and in a personalized manner and make it easy to understand at a glance. The result: Customers feel understood and well advised. Strong customer loyalty is one of the most critical factors for business success.

Did you know? The implementation of a CRM system alone can increase a company’s revenue by 41%. (Delhi School of Internet Marketing, 2017)

The intuitive user interface of CRM systems also results in lower expenses for the company. Instead of the company having to resort to many tools, a CRM system serves as its central platform, which acts as an interface between the different departments, thus simplifying the communication across teams. The teams only need training in one software product, which can lower training costs. CRM systems also provide a high degree of flexibility since they facilitate mobile working. But that is not the only reason why 91% of North American companies use a CRM system today (FinancesOnline, 2021).

How does CRM software work?

CRM software collects all the data customers leave behind throughout their entire customer journey. The information flows into the central system and is summarized into specific customer profiles there. For example, when a customer contacts customer support or makes a purchase in the online shop or a prospective customer registers for a newsletter, the CRM records this data. As a result, companies can make decisions based on facts regarding which customer profiles to focus on, which communication is the right communication, and which immediate measures it should take in response to a complaint.

CRM systems raise the personalization of customer communication to a new level and return the focus to the customer – which is where it should be. The customer history also sheds light on future trends and forecasts since you can analyze and interpret customer behavior based on past interactions and purchase decisions. Not only does the CRM system store customer data, but it also assists with the planning of necessary activities and the implementation of additional steps. It allows you to transform opportunities into leads and eventually into customers.

Advantages of a good CRM system

The advantages of CRM systems are varied, and each advantage varies from software to software. Among the most convincing reasons that speak for a CRM system are the following:

1. Centralized contact management

The CRM system is the central location where all customer information is stored, managed and processed. Thanks to real-time data, the information updates continuously, ensuring a seamless customer history for quality data management.

2. Dashboard analyses as a basis for decision-making

Intuitive CRM systems come with dashboards with critical reports. Based on the KPIs, you can make data-supported decisions at the management level. Specific cross-selling and upselling opportunities are created and uncover revenue opportunities.

3. The 360° view promotes teamwork

A central platform providing the marketing, sales and customer service teams with the most critical customer data fosters a customer-centric alignment throughout the organization and across departmental boundaries.

4. Seamless tracking of the customer journey

Past and present customer activities are always trackable. As a result, the sales team has insight into processes continuously and can pursue lead qualification strategically and transparently.

5. Personalization increases customer satisfaction

Analyses identify customer needs that, in turn, marketing and sales can respond to immediately. Customer communication can be aligned individually and in a user-oriented manner. As a result, the customer relationship becomes closer, in turn resulting in higher revenue.

6. Configurability creates flexibility

Companies can tailor CRM systems to match their specific needs and strategic direction. Configuration options unlock the maximum potential of customer relationship management and provide a high level of flexibility.

7. User-friendliness and automation reduce costs

Working collaboratively on a centralized platform lowers resource expenditure. Because of the high degree of user-friendliness, employee training costs also decrease. In addition, automation has the platform perform processes whereby contact center agents and sales staff can focus on what truly matters: customer proximity.

What types of CRM systems are available?

CRM systems can be distinguished by their range of functions and process orientation – from CRM systems specializing in reporting and those that improve the workflow to cloud-based platforms providing access from anywhere. Holistic CRM systems link the various approaches to map the entire customer journey and provide analytical and operational methods as well.

The main types of CRM systems:

1. The analytical CRM

This CRM solution analyzes stored customer information and generates meaningful reports. Based on the data, customer behavior can be better understood and provides insight into the buying potential.

2. The operational CRM

With this CRM system, companies collect customer data. From phone calls, e-mail traffic or messages on social media, the solution collects personal customer information that flows directly into the CRM system. Since the customer data updates continuously, you can adjust your customer communication and make it even more accurate.

3. The communicative CRM

The communicative CRM comprises all channels used to communicate directly with customers, including phone, e-mail, social media, written correspondence, personal conversations and fax. The documentation reveals which customer groups use what communication channels particularly frequently.

4. The collaborative CRM

This CRM describes the collaboration between various departments, companies and suppliers within customer relationship management along the value chain. CRM systems ensure that each team has the same data about the customer profiles available and can enrich it.

5. The social CRM

This CRM includes the integration of social networks as a communication channel. With increasing importance, social networks play a unique role in the CRM solution. Data from social media is recorded and used for customer analysis and customer acquisition. In addition, marketing, sales, and customer service activities increasingly include social networks. Please see our blog post for more information on the topic of the social CRM.

6. The cloud-based CRM system

Contrary to client-/server-based CRM systems, cloud-based systems are hosted by third parties. It is not the company but the provider that bears server and maintenance costs. The provider also handles updates and backups.

Cloud services have gained enormous popularity in the software industry. 56% of respondents say that they prefer cloud-based CRM systems (SelectHub, 2019). We can distinguish between the private cloud (where you are the host but mobile access is possible) and the public cloud (where a third party does the hosting). There are also hybrids of the two models.

However, client-/server-based systems reside on a central database, and it is the CRM system’s software making them available to the users’ computers. Therefore, this type of software is often called “on-premises” as well.

Open source CRM – simply building a CRM solution yourself?

Web-based CRM platforms have facilitated a decentralized type of working and have at the same time enhanced the symbiosis of marketing, sales and customer service. In addition to SaaS offers, however, it is also possible to resort to open source systems, and you can tailor the configuration to your company’s specific alignment.

In contrast, even no-code and low-code platforms provide modern and innovative CRM systems where users can customize processes without programming skills. No-code and low-code platforms provide citizen developers with more flexibility, at the same customization potential. You can read more about citizen developers and their potential for CRM in our blog article.

1. The code CRM

For customizing reasons, it may be practical to use code CRM systems. With those, you can easily add certain functions or views to the program by doing the programming yourself. To implement them, however, you need IT services.

2. The low-code CRM

On the other hand, low-code software is an approach that requires hardly any or no coding skills. Instead, you use visual interfaces (GUI) where you can make changes and set up configurations. A classic example is drag-and-drop builders, which you can use to create reports and dashboards, for instance. Despite the simplified solution, you can still make changes to the code.

In a low-code CRM system, marketing experts, salespeople and the customer service team can make modifications themselves without opening an IT department ticket. The intuitive operation increasingly allows citizen developers to make changes to technical products themselves.

3. The no-code CRM

No-code is a software approach that requires no coding skills at all. This type of software is helpful if you want to work without support from developers entirely. Instead, citizen developers can handle each task independently.

A no-code CRM lets you easily link cross-platforms, and elaborate interface configurations are not necessary. In addition, you get rid of integration issues because the end user can independently connect external tools to the CRM – without any programming skills.

How to select the right CRM system for your company

The requirements for a CRM system depend significantly on a company’s strategic direction, communication channels and size. Not every software product will meet the needs of every company equally. Therefore, it is necessary to establish robust selection criteria to facilitate the search and the decision. You can use the following requirements and questions to evaluate CRM systems:

1. Application area and data management

A company’s direction is a crucial consideration when selecting a CRM system. For example, which industry is your company in? B2C or B2B? How big is your company? How complex are your customer data? Can the CRM system map the address data according to your expectations? In this case, data models and data quality management are subdivided into a simple and a complex variant.

2. Workflow and analytic choices

Workflow management shows whether a CRM system does your company’s organization justice. For example, can you schedule appointments and take notes? Can you assign or group teams? In addition, reports provide the teams with analyses for process optimization. Which reports are possible? Can you deliver automated campaigns? Are there AI solutions? Can you filter and search for data?

3. Marketing

For consistent communication on all channels, CRM systems integrate e-mail marketing and social media marketing. So, you have to ask yourself the following: Which e-mail providers can you link to it? Which interfaces are available to what social media platforms? Is community and content management possible? Can you create marketing campaigns? Are there automated solutions?

4. Sales

CRM systems support lead management. To analyze its success, you must be able to track every step of the lead funnel. The creation of forms, contracts or questionnaires by the CRM system is therefore particularly beneficial. Reporting provides evaluations of the success rate of sales-technical activities.

5. Customer service

Which communication channels can you connect to the CRM system? Which histories (e-mail, phone and social media) can you map? Is there a call center function? Which analyses are possible in terms of service quality and customer relationship? All these questions relate to the customer support team’s criteria for the CRM system.

6. Technical requirements and performance

Technical requirements, too, influence your selection of a CRM solution: Is it intuitive to use? Which language selections are available? Is the solution cloud-based? Can you manage usage rights? Which server, database and operating system are necessary?

A side note: CRM systems pay off quickly. Some companies report a return on investment (ROI) of around 1556% over three years after implementing a suitable CRM solution. Employees became more productive, sales-qualified leads increased by 300%, and the number of completed sales doubled. (Nucleus Research, 2018)

Empathy – a fundamental building block in CRM marketing

Emotional connections between companies and customers are more critical than ever. We must remove the digital distance through personalized solutions that put customer needs into the center. Particularly in traditional industries such as the financial sector, terms such as empathic banking are increasingly in the spotlight. You can learn more about empathic banking in our article. Trustworthy chatbots help you fill out forms on websites. Video chats with fellow employees provide a simplified ID process.

Empathic action that focuses on the customer’s perspective becomes the premise for strategic decisions. Empathic CRM marketing uses AI-based solutions and data analyses to present offers and solutions to customers proactively before problems ever occur. CRM systems that support genuinely empathic marketing identify relevant (micro-) moments and life events, questions, conflicts and opportunities that you can use to offer value-added services and products. They also allow you to engage with customers proactively, deliver needs-based personalized campaigns and collect feedback for optimization. Through proactive action, you give your customers clear added value.

The social CRM: How social networks can help you with customer care

In addition to traditional communication channels, most CRM platforms also offer integrated social media channels. Since this solution collects data from social networks, companies get to know their target group even better and can therefore enhance the range of their services significantly.

This also fulfills the customer need of being able to contact companies on all communication channels. Social media has a particularly low barrier to usage, which is why more and more people resort to it to communicate with companies. The social communication channel means more information about customers and prospects for companies – and receiving it in real time. They use the information to improve their service quality and design marketing and sales campaigns.

The additional contact points give you a competitive advantage since they can further increase customer loyalty. In addition, you can identify and contact potential brand ambassadors. You can also use social media for one-to-many communication, which increases your reach.

Communication on social media offers significant benefits for sales, marketing and customer service. The social CRM supports efficient processes to deepen the customer relationship, qualify leads and set up personalized marketing campaigns. Get more information here about how you can use a social CRM to meet your customers where they are.

The conclusion – understanding your customers thanks to the CRM

Customer relationship management is essential for business success – because happy customers provide revenue sustainably and over the long run. CRM systems provide the technical solution for personalized marketing and sales by collecting customer data and combining the data into meaningful profiles.

Reaching customers where they like to be when they get in touch with companies offers a distinct advantage to get ahead of your competition. Therefore, more than ever before, a social CRM is at the center of customer relationship management. If customers still feel understood and feel that their needs are satisfied, companies can again pursue customer centricity.

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Zeno Hug, Creator of Customer Delight

+41 58 255 99 59

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