Skip to main content
Visit Scotland | Alba

0 min read

What is customer relationship management (CRM)?

CRM is an effective and efficient way for businesses to manage their relationships with customers.

It's core principle is that you can use every customer interaction or communication with your business. It can help you to better understand the customer and improve your relationship.

This applies to the whole customer journey. Think of identifying a consumer or business as a prospect. But also of booking, visiting and nurturing people into repeat customers.

  • Larger businesses

    CRM bundles what would otherwise be lots of conversations with different departments into one place.

  • Smaller businesses

    CRM formalises what you do by default. It gives you a single point of contact with all your customers' past interactions with your business.

CRM software

Businesses can use CRM software to help their day-to-day operations. At the heart of CRM software is a database to store customer information. There are then different modules which can help fulfil different processes in the customer lifecycle. In a simple sense, modules can relate to different business functions for example:

Many CRM software allow integration with other software. For example, Quickbooks. Depending on your experience and needs you may want a combination.

An important by-product of CRM software is Business Intelligence (BI). By using the software to log communications and actions, you can get very useful reporting. You can use this reporting and BI to develop product, identify staff needs and areas for growth, and forecast.

What are the benefits of CRM?

  • Improve processes/efficiencies

    One aim of CRM is to increase customer value and turn people into repeat customers. You can only achieve this by meeting customers' needs. It is important to put the consumer front and centre, and to provide more value to your customers. You can do this by not just meeting their expectations, but exceeding them.

  • Customer Managed Relationships

    Some businesses have changed Customer Relationship Management to Customer Managed Relationships (CMR). CMR goes beyond serving the needs and wants of customers, and gives them control of all aspects of the relationship.

  • GDPR

    Data management and compliance is a very important benefit of CRM and is a real driver for investing in CRM software. It allows you to manage your customer data effectively, so that you comply with data protection legislation.

  • Single Customer View

    CRM relies on you having the ability to create a Single Customer View (SCV). This essentially means you can recognise a repeat customer and have a database or list of unique customers. Attached to each customer record is all their bookings or interactions with you. Creating an SCV can be complex. A very simple way to do so is to always obtain an email address from your customers and match all bookings back to this email address.

There are many software providers and which you choose depends on the functionality you need and your budget. There is even some free CRM software.

It’s important to consider data protection when choosing a CRM software. Given that it will store personal data you must consider:

  • Is the data stored in the UK, EU or elsewhere?

  • Is it secure?

  • Who has access?

  • What if I choose to leave?

Applying CRM principles to your business

  • Collate all customer data into one place

  • Create a single customer view

  • Log all interactions and communications with a customer

  • Use what you know about a customer in your conversations and marketing to them

Related links