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The Fundamental Function Of CRM Software

The Fundamental Function Of CRM SoftwareOver the last several weeks and months, we here at CRM Switch have written a lot about various aspects of the CRM industry: vendors, product histories, migration to and from various systems, integration with a variety of other types of software, and more.

But one thing that we haven’t discussed in awhile, and a topic that should be revisited on a fairly regular basis, is the fundamental purpose and function of CRM software for a business and it’s users.

It’s easy to say that CRM is “customer relationship management software”. But what does that actually mean? Different companies will likely have slightly different definitions based on their business model and internal processes, but I believe there is one common thread that weaves through everything: the definition of a relationship.

It’s important to note that many, if not most, businesses that use CRM software today are using it to manage a variety of different relationships, not just with customers. Prospects, partners, vendors, etc–all of these “relationships” can be managed within modern CRM systems.

Getting back to the idea of a common thread, all of these non-customer relationships, as well as actual customer relationships, are really just a series of outbound communications from one party and inbound responses from another, which are being recorded in a database that’s accessible to a group of employees or an entire organization.

When viewed in that context, the fundamental role of CRM is not customer relationship management, but rather communication and response management.

When viewed in that context, the fundamental role of CRM is not customer relationship management, but rather communication and response management. This concept broadens the idea of what CRM can be, and can be used for. It’s no longer tied to an outdated definition that implies limited functionality based on a single relationship type (ie “customers”).

All businesses need to manage their communications somehow, regardless of how, where, and whom they do business with. By rethinking what CRM software is used for, it becomes clear that any tool that improves the management of communications and responses is a valuable one.

While some may point to my revised definition of CRM and say, “that definition could be applied to a variety of software not traditionally called ‘CRM’”, the truth is that businesses are already using a range of different kinds of software to manage their communications that aren’t “traditional CRM”.

Twitter, Facebook, LinkedIn–all of these are platforms for communication and response management. Which is precisely why traditional CRM vendors like Salesforce, Microsoft, and Sugar are rushing to integrate these services into their own platforms.

CRM vendors moved past the “customer relationship management” concept a long time ago, but they’ve been sluggish in changing how their products are perceived in the eyes of the enterprise marketplace.

This new definition of CRM, that of communication and response management software, may help businesses to refocus their attention on the importance of the idea first, rather than the importance of the provider.

“Who are we communicating with and receiving responses from?” and “Does that system and/or process need improvement?” are the questions companies should start with. If the answer to the second question is a definite yes, then it might be time to start looking for a CRM solution.

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