TL;DR: CRM stands for Customer Relationship Management. It's a strategy and technology for managing interactions and relationships with customers and potential customers, aiming to improve business relationships, customer retention, and sales growth.

What is a CRM?

CRM or “Customer Relationship Management” is the term commonly used to refer to technology which allows companies to track and manage their interactions with customers. CRM systems help organizations to develop stronger connections with their target audience, encouraging sales and brand loyalty over time.

CRM software helps with organization, efficiency, time management, and ensuring you have what it takes to impress your clients. Though the concept of CRM software has been around since the mid-90s, the technology only really began to earn additional attention recently, as the concept of “CX” or customer experience becomes more essential for brands.

When people talk about “CRM” they’re often referring to Customer Relationship Management as a software solution. However, there are various definitions of CRM, such as:

CRM as a process: Customer Relationship Management as a “process” is the various efforts and systems a company uses to nurture and manage brand relationships.

CRM as a strategy: This is a business’ philosophy about how relationships with potential leads and customers should be managed.

CRM as a technology: This is the software product which teams can use to record, track, analyze and improve interactions between customers and the company.

The goal of “Customer Relationship Management” as an overall concept is to use strategies, processes, and technologies to improve business relationships and grow the business.

What does CRM software do?

Customer Relationship Management software often has a number of features. You can record customer contact information, like email, telephone, and interactions on social media, and even track customer behavior on your website. CRM solutions are also effective at pulling in other information about the company’s activity and storing details on client preferences.

Essentially, CRM technology gives companies a behind-the-scenes look at all the information required to understand the expectations of a customer, and your audience in general. With a 360-degree view of every interaction with a consumer, you can have much better conversations with your target audience. Benefits of CRM software include:

Organization: Keeping customer information organized is crucial when you’re trying to deliver amazing CX. Your CRM technology will collect all phone numbers, email addresses, and customer data, so you can create personalized experiences for each customer.

Task tracking: The correct software can help to align the team around specific tasks, and even automate various processes. This keeps the team running as efficiently as possible, even in a hybrid workplace or remote working environment.

Sales opportunities: CRM solutions track things like purchasing patterns, and provide insights into trends and themes. This makes it easier for companies to determine how they need to evolve to grow going forward.

Tracking sales: Sales management is a common component of the CRM environment. You can use your technology to track the progress of sales conversations throughout the organization. This also helps to determine who you need to follow up with.

Personalized communications: CRM technology gives you a behind-the-scenes look at your customers, so you can communicate with them in a more personal way. Custom communications generally improve brand loyalty and conversions.

Increased retention: Tracking customer relationships also makes it easier to determine which of your clients might be about to abandon ship.

Updated February 17, 2024
Axel Grubba is the founder of Findstack, a B2B software comparison platform, with his background spanning management consulting and venture capital where he invested in software. Recently, Axel has developed a passion for coding and enjoys traveling when he is not building and improving Findstack.