How Does CRM Work?

By Contributing Writer

Overview of CRM

Customer relationship management (CRM) is a system for managing customer relations between a company/business and clientele, including maintaining current clients and following up on prospective sales leads. The CRM system can be automated in the form of CRM computer software. CRM software stores customer information to a record on a computer, or to a database in an organization. The customer information includes phone numbers, addresses, best times to call, and previous calls made. CRM applications store additional information on products which the customer owns (including past purchases from an organization).

Campaign management software

CRM campaign management software processes customer data. CRM software informs the user of what products the customer has purchased in the past. Campaign management software is what allows marketing to focus on cross-sale campaigns. The analytical power of CRM enables the software to determine when up-selling, price changes, or more focus on product development is needed. This is accomplished through the use of data mining (or more specifically, predictive analytics), which utilizes logical variables (such as gender, age, or household annual income) to determine sales potential for a subject. A customer's purchasing history record is stored in the CRM software, which is used as a predictive variable for the probability of making a future sale to the customer. To input the necessary information into a CRM application, the customer's information must be manually keyed into the system using data entry personnel. Information received from the customer is shared through a database, like Oracle, and distributed to sales, marketing, technical support and customer service departments for CRM collaboration. In this use of CRM software, the whole company is on the same page.

Sales force automation software

CRM covers sales automation features, such as tracking sales calls (including the customer's name, phone number, address, time of call and the purpose of the call). Any sales made are automatically recorded by a computer. Modern sales automation CRM software include features that allow the customer to configure the product. An example is purchasing a vehicle online. The customer first finds the car that they like, and then makes changes to the aesthetics (color of paint, interior texture) and mechanical features (automatic verses manual transmission). Sales automation reduces some errors in communication, because this type of CRM software puts more control in the customer's hands. The customer can see the product online, make changes, and then review the product before proceeding to make a purchase.