What is a CRM? Definition and role in Customer Relationships
7min • Feb 6, 2025 • Last updated on Feb 17, 2025
Olivier Renard
Content & SEO Manager
91% of companies with more than 11 employees use a Customer Relationship Management (CRM) solution to manage their customer relationships (GetBase). However, fewer than 40% achieve an adoption rate above 90% among their teams (CSO Insights).
As a tool, CRM is used by sales, marketing, and customer care teams. It helps organise contacts, manage interactions, and enhance customer satisfaction.
However, customer relationship management (CRM) goes beyond software. It is a comprehensive approach aimed at strengthening relationships between a brand and its customers or prospects.
Key Takeaways:
Customer relationship management enables businesses to interact more effectively with customers and build loyalty. By meeting their expectations efficiently, it contributes to business growth.
A CRM solution simplifies lead tracking, personalisation of interactions, and performance analysis for sales and marketing.
There are several types of CRMs, each tailored to company size and industry, with specific functionalities.
A CRM complements other customer management tools. It integrates with an ERP (Enterprise Resource Planning) system for administrative and financial management and with a Customer Data Platform (CDP) to provide a unified customer data view.
🔎 Discover what a CRM is, its key features, and its role in optimising customer relationships. Find practical advice on choosing the right tool, automating interactions, and enhancing satisfaction throughout the customer journey. 🚀
Customer Relationship Management: Definition and Origins
Customer Relationship Management (CRM) refers both to the strategic approach a company adopts to manage relationships with customers and prospects, and to the tool designed to optimise these interactions.
Its goal? To centralise information and facilitate communication to deliver a personalised and efficient experience.
Historically, merchants naturally managed customer relationships, relying on memory, notebooks, or paper records long before CRM systems were formalised.
The rise of digital technology led to the development of the first CRM software in the 1980s, primarily to structure sales activities and customer support. Today, these tools have become essential for businesses across all industries.
Key features
A CRM system incorporates several essential functionalities. It primarily serves sales, marketing, and customer service teams:
Contact management: Centralising customers, prospects, and partners in a single database.
Task automation: Scheduling follow-ups and sending personalised emails.
Sales and interaction tracking: Managing communications, pipelines, and dashboards.
Segmentation and personalisation: Adapting marketing campaigns based on customer preferences and behaviour.
Analytics and reporting: Monitoring key indicators such as revenue, customer lifetime value, and satisfaction rates.
These features improve efficiency, enhance customer satisfaction, and support data-driven decision-making.
Different types of software
Not all CRM systems serve the same needs. There are three main categories:
Operational CRM: Automates day-to-day tasks (sales, customer service, marketing) to improve team productivity.
Analytical CRM: Focuses on customer data analysis to refine strategies and support decision-making. At this level, a CDP offers even broader possibilities.
Collaborative CRM: Facilitates information sharing across departments (marketing, sales, support).
Some CRM solutions combine all three approaches to provide a comprehensive experience tailored to business needs.
Depending on the provider, CRM hosting options include on-premise, cloud-based, or hybrid solutions. Some CRMs are industry-specific, mobile-friendly, or designed for social media engagement.
The 3 main types of CRM
Why do businesses use CRM?
A CRM system is more than just software. It is a performance driver that helps optimise customer interactions and improve business operations. Here are the key reasons companies use CRM:
Enhancing customer relationships and loyalty
A satisfied customer is a loyal customer. With a CRM, businesses can personalise interactions, anticipate needs, and ensure seamless follow-ups. Teams deliver a consistent and efficient experience across all channels (email, phone, chat, etc.).
For example, a B2C e-commerce company uses its CRM to send tailored offers based on each customer’s purchase history, strengthening loyalty and engagement.
Automation and Time-Saving
A CRM simplifies many repetitive tasks:
Automated email campaigns triggered by customer behaviour.
Lead qualification based on the sales funnel stage (MQL vs SQL).
Reminders and notifications for effective follow-ups.
This allows teams to focus on high-value activities while reducing the risk of missed opportunities.
Sales Performance and Lead Generation
A CRM helps sales and marketing teams identify the most promising leads and track their progression through the sales cycle.
With the collected data, businesses can prioritise actions, optimise follow-ups, and increase conversion rates.
Lead scoring assigns prospect scores based on their behaviour and attributes, helping businesses focus on those most likely to convert into customers.
Sales and Marketing alignment
A CRM acts as a bridge between sales and marketing teams. The Service Level Agreement (SLA) defines key criteria and actions to ensure an efficient lead management process.
Within this framework, a distinction is made between:
MQL (Marketing Qualified Lead): A lead engaged through marketing efforts.
SQL (Sales Qualified Lead): A lead ready for a sales approach.
Proper alignment between sales and marketing accelerates the sales cycle and improves conversion rates:
Marketers analyse customer behaviour and adjust campaigns accordingly.
Sales teams access key insights to personalise their approach.
👉 Overall, a CRM benefits all customer-facing teams.
CRM vs ERP vs CDP: What are the differences?
Businesses use various tools to manage data and optimise customer relationships. CRM, ERP, and CDP serve distinct but complementary roles.
Discover their specific features and choose the solution best suited to your needs.
Criteria | ERP | CRM | CDP |
|---|---|---|---|
Main objective | Manage and optimise company resources. | Optimise customer interactions at every touchpoint. | Unify and activate customer data for personalisation. |
Target users | General management, finance, logistics, production. | Sales, marketing, and customer service teams. | Marketing, data, IT, support and sales teams. |
Data type | Financial data, inventory, HR, supply chain. | Contact information, sales opportunities, quotes, interactions. | Diverse data: 1st-party, 3rd-party, profile, behavioural, transactional, offline. |
Company types | Large enterprises, retail, public sector, healthcare. | All businesses: B2B, SaaS, e-commerce, retail, services, tourism. | Companies aiming for customer experience personalisation. |
Types of tools | General ERP, vertical ERP (industry, retail), cloud ERP | Operational CRM, analytical CRM, collaborative CRM | Packaged CDP, composable CDP, hybrid CDP |
Main Vendors | SAP, Oracle, Microsoft Dynamics, NetSuite | Salesforce, HubSpot, Zoho, Sellsy | DinMo, Segment, Imagino, Adobe CDP, Salesforce CDP |
Differences between ERP, CRM and CDP
While a CRM is essential for managing customer relationships, it is no substitute for an ERP for internal management or a CDP for accurately exploiting customer data. Their combination offers an effective approach.
In particular, a customer will go through a multitude of contact points before converting: telephone, email, social networks, website, shop, etc. A CDP will serve to organise and activate all this data around a unified customer view. It goes beyond the interactions recorded in a CRM.
ERP vs CRM vs CDP
How do you choose and implement a CRM solution?
Selection criteria
Choosing the right CRM starts with an analysis of your company's needs. You need to take into account:
Ease of use: an intuitive tool will encourage teams to adopt it.
Scalability: the solution needs to evolve as the company grows.
Integration: a good CRM integrates with existing systems (ERP, CDP, marketing solutions).
Customisation: it must adapt to internal processes without making management more complex.
Total cost: licences, maintenance, training... everything needs to be evaluated.
Mistakes to avoid during implementation
The failure of a CRM often stems from poor deployment. Common mistakes include:
Failure to take business needs into account: a purely technical approach that neglects the day-to-day uses made by teams limits the adoption of the tool.
Lack of buy-in from teams: without training and support, the system will be under-utilised.
Incorrectly calibrated data collection: too much information used incorrectly can be detrimental to efficiency.
Lack of vision: no CRM tool, however good, can replace a clear understanding of the market and its players.
A choice based solely on price: choosing an inexpensive but unsuitable solution is doomed to failure.
The future of CRM in the data ecosystem
CRM remains a cornerstone of customer management and relationship marketing. With the rise of Customer Data Platforms (CDP) and Reverse ETL, businesses are redefining customer data strategies. The goal? Unifying and activating data in real time for a more personalised and efficient approach.
The future of CRM lies in deeper integration with new data tools, enabling more precise customer insights and stronger alignment between marketing, sales, and data teams. 🚀
FAQ
How does CRM help in customer retention and loyalty?
A CRM system helps businesses build strong customer relationships by tracking interactions, preferences, and purchase history. With this data, companies can personalise communication, send targeted offers, and provide timely support.
Automated follow-ups and loyalty programs encourage repeat business. Additionally, CRM enables you to prioritise the sales and marketing actions to be taken, based on the new opportunities identified. A well-implemented CRM ensures that every customer feels valued, leading to increased retention and long-term loyalty.
What are the biggest challenges businesses face when adopting a CRM?
Common challenges include poor user adoption, lack of data quality, and integration issues. Employees may resist using the system if it is too complex or lacks proper training. Inaccurate or duplicate data can undermine CRM effectiveness, making regular data maintenance essential.
Integration with existing tools, such as ERP or marketing automation platforms, can be challenging if not planned correctly. To overcome these issues, businesses should define clear objectives, involve key stakeholders, and ensure proper training and support.
3. Can small businesses benefit from a CRM, or is it only for large enterprises?
CRM systems are valuable for businesses of all sizes. Small businesses benefit by organising customer data, tracking interactions, and automating tasks that would otherwise be time-consuming.
Many CRM solutions offer scalable and affordable options, ensuring that even startups can leverage them effectively. With features like contact management, email automation, and dashboards, small businesses can improve efficiency, enhance customer experience, and drive growth without the need for a large sales or support team.
