What is the Modern Definition of CRM

The definition of Customer Relationship Management (CRM), especially in the modern, post-2010 era, incorporates all the business practices and strategies used by companies with the technologies they use, for the purpose of organizing, managing, and analyzing customer contacts and data throughout the extent of the customer life cycle.

The aim of a CRM system is to establish and maintain optimal relations with customers, so as to promote retention and loyalty, while also increasing sales. Modern CRM systems have become a focal point for gathering customer information across the many points of contact a company may have. This multi-channel CRM capability centralizes customer information from the company website, telephone contacts, direct mail, marketing materials, live chat, and even information gathered from the social media. Comprehensive CRM software also provides detailed data on a customer’s purchase history, current buying preferences, and personal needs and concerns.

Early CRM Systems


The description of customer relationship management software above is a far cry from the its more humble origins in the 1980’s, when the simplest CRM approach began evolving out of direct marketing, and into database marketing. Instead of the hit-or-miss broadcast approach of direct mail marketing, the database approach involved the collection of customer information, which could be coupled with statistical modeling to communicate with customers via more personalized messages.

This served the purpose of using a more targeted strategy, which generally produced better results, because it was based on the likelihood of recipients belonging to specific groups of becoming potential customers. The hallmark of these early CRM systems featured that more targeted approach, as well as much better organization of information, which in turn allowed quicker and easier access. Thus, a quantum leap could be taken from marketing in the blind, to reaching out to a targeted audience for the purpose of cutting costs and more effectively reaching likely buyers.


CRM Evolution to the Modern Age


During the 1990’s, a great many developments occurred which advanced the maturity of CRM systems, increasing their functionality and value to companies. Pre-sales activities such as lead generation, telemarketing, and quote preparation could be monitored through automated database marketing, which came to be recognized as sales force automation.

At the same time, post-sales activities were being developed as customer service and support functions, through contact centers and Helpdesk departments within organizations. As these two initiatives came together, CRM software broadened its scope to  become a true sales and marketing tool, fully capable of customer interaction tracking, inventory control, and additional customer-related features.

The Internet had by this time blossomed into a universal tool for businesses, and it spurred the development of e-CRM systems, which incorporated companies’ intranet and extranet usage with the Internet, to provide intra-organizational collaboration that simply had never been possible before. With the explosion of mobile device usage which occurred at this time, CRM vendors realized the potential for incorporating mobile access into their software systems, and that also became a major new feature in customer relationship management software.

This in turn, sparked the need for a single platform which could manage all customer relationships across all marketing channels through which a company might operate, and multi-channel CRM was developed as a result. This important innovation allowed all sources of customer information that a company might have to be centralized in a single platform which could accommodate them all with equal facility, and still maintain all the benefits of organization and data accuracy.

The Purpose of CRM in Today’s Business World

Business is just as competitive as it ever was, and it’s well-known that roughly half of all new businesses fail within the first two years of their existence, so it is an undeniable fact of the marketplace that every advantage is necessary in order to compete successfully. Customer relationship management provides just such an advantage, especially for forward-thinking companies which adopt multi-channel CRM to obtain a clear overview of all customer data in one place.

The importance and the effectiveness of this dashboard approach to summarizing and centralizing all customer relationship information can become the make-or-break factor which determines the survival of a business. Since customers have changed their purchasing habits, and gathering information about customers now involves tracking them through social media, the Internet, and elsewhere, it has become necessary to have an extremely agile and flexible CRM system.

One of the most significant recent developments in the advancement of CRM software has been the modern evolution of cloud computing. This has eliminated the need to install software on a whole bank of company PC’s and mobile devices, and instead has moved software and services into an online environment which is secure and universally accessible.

This has also given rise to CRM SaaS, which makes CRM service available to even the smallest sized companies, because it’s based on a pay-per-use model. Cloud-based CRM systems ensure that all users have the same information at all times, and that collaboration between employees and teams is much easier, regardless of geographic location.

In today’s business world, it is essential that business growth happens organically, without the need for costly and timely upgrades. Cloud-based CRM fills this need perfectly, allowing any sized business to easily scale up as business growth becomes a reality and greater success is achieved. In essence, the CRM systems of today serve the purpose of integrating a diverse number of business functions and information channels into a single platform, from which the most streamlined and cost-effective approach to customer relations is possible.