What is CRM software? (Definition and how to use it)

By Indeed Editorial Team

Published 11 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Customer relationship management (CRM) encompasses all areas of a company's relationship with its clients. Customer management was once as straightforward as keeping a basic database of client contact information, but now takes a comprehensive approach to customer service, engagements, advertising, marketing and a variety of other operations within the company. A CRM system aids companies in organising customer information and streamlining operations. In this article, we define CRMs and explore why and how to utilise them.

Related: What is client relationship management?

What is CRM software used for?

A customer relationship management software is a collection of programs that store, organise and handle client data, exchanges and services. It's largely used to gather and analyse customer data to better understand the demands of current and future customers and to assist sales and marketing departments. A customer accounting system, payment services and returns and refunds are examples of CRM functions.

CRM systems simplify the manual documentation procedures that have been in place for a long time. In a matter of seconds, you may access contact information and communications for a specific client from a database of multiple customers using a CRM. Originally, CRM software got stored on personal PCs. Later, it got relocated to servers to assist the entire company, which was typically dispersed across many sites.

What are the different types of CRM software?

Understanding different CRM software can help you determine which software is right for your needs. Different businesses may benefit from different CRM software types. There are typically two types of CRM:

On-premises CRM

CRM software utilised on a company's own server is an on-premises CRM. Small and medium-sized organisations mostly use it. This is because it's less expensive and doesn't need the intricacy of installing large-scale CRM on the property. This is a good option for companies that prioritise data protection for their consumers and want to decrease the risk of information leaks.

On-demand CRM

CRM software that runs on the software company's cloud computing is an on-demand CRM. This CRM is normally available on a pay-per-use basis. Businesses searching for consistent procedures across the company without constantly worrying about in-house service and upkeep might consider on-demand CRM. Companies with confidential client data, such as financial services or medical care, may be hesitant about entrusting their information to a third party. This approach might work better for remote teams.

The importance of using CRM software

CRM software aids businesses in gaining a better understanding of their clients' needs, interests and personalities. It provides a centralised framework for connecting consumer data from many sources and sectors, including websites, newsletters, contact centres, sales and marketing. CRM systems make it simple to analyse client data and spot patterns, allowing businesses to better serve their consumers.

A successful CRM strategy links several pieces of client data to help you promote your products more effectively. Financial institutions, for example, want to understand their clients' ages and financial situations to advertise mortgages, loans, lines of credit and insurance plans. Similarly, most banks utilise CRM software to determine high-net-worth clients and provide them with specific services.

Important basic-level features of CRM software

Nearly every single CRM software has the following features:

  • Log customer interactions: A CRM system keeps track of customer information and engagements via various communication channels, such as telephone, online and support requests.

  • Document management: A CRM system saves and makes it easy to share various papers and paperwork.

  • Divide customer database: A CRM system divides current customers into groups based on age, region, revenue and preferences, allowing marketing teams to execute more focused campaigns.

  • Sync calendar and notifications: A CRM system delivers reminders and alerts about meetings with clients and you can integrate it with your diary. You can establish reminders by email, text and computer notifications in most CRM applications.

  • Supports lead management: A CRM system keeps track of leads throughout the entire customer lifecycle. It collects, saves and segments leads according to the company's marketing requirements.

Related: How to build client relationships with these top tips

Important advanced-level features of CRM software

Aside from the services provided by a basic CRM, complex CRMs may additionally conduct:

  • Sales automation: Modern CRM solutions can assist you throughout the sales cycle. You can track sales, examine trends and automate a variety of business processes.

  • Marketing automation: Automating marketing efforts is a common usage of modern CRM platforms and they're very useful in email drip marketing. New subscribers to your mailing list may receive an automated welcome email, followed by subsequent customised emails based on their reaction to a previous message if they've expressed an interest in purchasing a product, which you can then use to have the sales staff follow up with them.

  • Field service automation: Some advanced CRM solutions can even give customers real-time field help. Customers' service calls can get sent straight to the nearest support professional, which reduces paperwork, decreases response time and boosts the tech support team's efficiency.

  • Offline mobile access: Modern CRM solutions may even allow users to access and utilise the platform when offline on their mobile devices. This is very useful if you don't have access to the Internet.

Related: 5 important CRM system benefits (plus definition and tips)

Advantages of CRM software

The list below details some of the key advantages of using CRM software:


The benefit of organising is maybe the most essential. You enter fundamental contact information like mobile numbers and email accounts as you get comfortable with the system. Users may follow and track general details and detailed data about each customer once the CRM system is operational. A CRM system is a central location where all information gets stored and managed, making life easier for everyone. This includes your consumers, who benefit from improved service and more personalised attention as you get a deeper understanding of them.

Monitoring tasks

The correct software combines a company's standard workflow and reduces the time spent on everyday chores. Automation can boost both customer experience and regularity. Consistency is one of the CRM system's under-appreciated benefits, as when consumers receive mixed messages, they become puzzled rather than thrilled.

Increased sales opportunities

Companies are always looking to expand their client base. Businesses occasionally struggle to come up with innovative ways to expand their consumer reach. One method is to learn more about existing clients. A CRM system may track purchase patterns and reveal trends. You can use this type of data to create micro-targeted strategies and tactics for increasing sales at certain moments.

Track sales across the company

A decent CRM is powerful enough to track sales activity for a company in addition to monitoring the client base. The CRM platform serves as a basis for acting on sales data and eliminating gaps as the journey continues. It's also a simple approach to keep track of the sales and marketing teams' performance.

Tailor interaction with customers

Customers may benefit from the personalisation features that many CRM platforms offer, besides more effective use of sales personnel. This is an enormous advantage given that 86% of consumers think personalisation played a part in their purchase decision, according to an Infosys survey. This allows you to address customers by their first name in emails or nurturing campaigns, depending on the industry. This means businesses can build more personal relationships with clients and increase customer engagement.

Increased retention

CRM may also aid sales by identifying which customers earn the most revenue or are the most involved. You may recognise a set of customers who attend workshops or read all of their emails using a CRM. It may be a good idea to invite them to be a brand spokesperson. A CRM can also assist you in retaining existing customers. Using a CRM and its ability to record consumer behaviour, you might detect trends such as when a client is about to depart. Understanding customer behaviour might help you create a plan or programme to keep at-risk customers happy.

Related: 10 ways to consistently offer good customer service

How to start with CRM software?

It isn't necessarily difficult to implement a CRM system in an organisation. The first step is to create a CSV file with all of your connections. Most CRMs walk you through the process. Import and record all of your contacts next. Then you can start working on your bespoke emails, follow-ups, client segmentation, pipeline phases and the rest of your everyday business strategies. Some CRM providers have consulting teams and bringing them in for seasoned views into best practices might be beneficial.

Related: What is marketing automation? (with tips)

Please note that none of the companies, institutions or organisations mentioned in this article are affiliated with Indeed.

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