Customer Relationship Management (CRM) is many different things, ranging from a strategy to software to a ticker symbol.
We’ve cataloged a variety of perspectives on what CRM is based on how vendors and their customers interact with one another — and how software factors into user, management, and customer experiences.
Companies invest in a system because they believe the positives will outweigh the negatives — translating into a positive return on investment.
But what are these opposing forces? We address that below with several sets of contradictory characteristics and outcomes.
But let’s start by looking at CRM from 30,000 feet.
CRM at a high-level
Here are a few different lenses through which to look at CRM.
A strategy
As a strategy, Customer Relationship Management is a holistic approach to managing and improving customer interactions and relationships.
It’s about providing customers with a consistent experience, no matter who the customer is talking to, emailing, texting, or chatting with.
Software
CRM software supports the strategy by housing much data in an organized, easily viewable, and reportable format.
A customer once told me, “CRM is a database with a beautiful front end.”
Combining accumulated data and custom workflows supports a business’s internal and customer-facing processes.
Salespeople, marketers, and customer service representatives are the principal users of CRM software. However, it’s often used by people in operational and finance roles.
A development platform
When a system from a new CRM vendor launches, it usually has a rigid design. For example, administrators can’t add custom tables (a.k.a. objects or entities).
As years pass, vendors transform their products into more of a platform.
Over time, an ecosystem and related marketplace develop. Third-party productivity apps can be dropped into the platform as native functionality.
In-house developers and contracted outside consultants have access to tools to create unique user and customer experiences with clicks and code.
A journey
Another customer said, “CRM is a journey, not an event.” What did he mean?
In a word, he meant “iterate.” Develop a vision, but don’t try to execute the entire vision at once.
Also, be open to the fact that you can’t see around the corner, and new requirements will consistently surface.
A ticker symbol
When Salesforce went public, the company chose the ticker symbol CRM rather than SFDC or something similar.
While the ticker symbol does not align with the brand, the symbol is more representative of the solution the company sells.
CRM software contradictions
CRM software is a set of diverse and sometimes contradictory things.
In many ways, each organization that adopts CRM for the first time or switches systems can control which way the pendulum swings for the following.
Free
Some, but not all, CRM vendors offer a freemium model. Salesforce does not. HubSpot does.
Can you roll out free CRM to 100 users across different departments? Probably not. But you can get started with a free edition.
A small business or small department with simple needs may be fine with a free version indefinitely.
Expensive
Our CRM cost calculator shows that the tool is expensive relative to other business software categories when you factor in all the costs.
Each year, leaders at some companies get to review eye-watering subscription invoices for CRM.
They ask for evidence that the system still provides a positive financial return.
A game changer
Many companies have figured out how to run their entire business on CRM.
They have leveraged the platform to make it an indispensable operational lynchpin for their organization.
Customers get valuable updates regularly and efficient service when they make contact.
A waste of money
Many companies have squandered tens or hundreds of thousands of dollars on CRM software and implementation costs.
The purchased system has had low user adoption and did not produce the hoped-for benefits.
Statistics vary, but at least 50% of CRM projects fail — often because the technology implementation does not follow a strategy.
Collaborative
When there’s a collective will to look at CRM alternatives, people from all corners of an organization come together to decide for the greater good.
When CRM software integrates departments and functions within a company, such as sales, marketing, and customer service, it can the CRM strategy of providing a seamless and consistent customer experience.
Siloed
When each department makes its own software decision, a company can end up with Salesforce for sales, HubSpot for marketing, and Zendesk for customer support.
Customer information is scattered across multiple systems.
Supporting the company’s CRM strategy often requires setting up integrations among the systems.
“Best of breed” vs. single vendor is an ongoing debate.
Unifying
When organizations take a disciplined approach to CRM selection and implementation by getting input from various stakeholders and representative end users, a path toward a united front is created.
When a company is dedicated to sales and marketing synergy, this approach fosters a unifying technology.
Divisive
One example of division we’ve seen is that the CIO wants to buy Microsoft Dynamics because the company is a Microsoft shop. The CRO wants Salesforce because they’ve used it at several previous companies.
Another example is that the CMO wants HubSpot, but the CIO wants to standardize on a vendor with greater longevity in the CRM space.
In these cases, management sometimes looks to a third party to help decide on the best-fit vendor.
Easy
When an organization subscribes to a new CRM system, it’s simple and pristine.
An administrator can further simplify the out-of-the-box user interface by removing unneeded fields and objects from the layouts.
Complicated
If a disciplined approach is not taken to managing a CRM system, it can quickly become complicated.
For example, an admin may add many custom fields to the user interface without considering the business case or usability.
The user interface becomes cluttered and more difficult to navigate.
A CRM system is a dedication
Unlike many business apps, CRM is not a “set it and forget it” software — it requires caring and feeding.
It must be actively managed as new business requirements surface and people come and go.
Famously, when a new sheriff (a new sales leader) comes to town, that person often wants to make their imprint on how opportunities should be managed and what reporting is required.
CRM does not do well without at least a well-trained part-time administrator.
The administrator should constantly communicate with users and stakeholders to ensure that the system stays on track and that users benefit from logging into the system daily.
There should be ongoing training sessions for new and existing users who need a refresher.
CRM can be the promised game-changer with the right approach and ongoing attention.
