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Visit Scotland | Alba

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What is customer relationship management?

Customer relationship management (CRM) is an approach used by businesses to effectively and efficiently manage their relationships with customers. At its core is the principle that every interaction or communication a consumer has with your business can be used to better understand more about that customer and improve the relationship.   

For large businesses it brings together what would traditionally be silos of conversations with different departments into one place. For smaller businesses it formalises what you do by default – have a single point of contact who knows a customer’s history with your business.  

CRM is about applying everything you know about a customer into the relationship to make them feel valued. It applies to the whole customer journey from identifying a consumer or business as a prospect, to booking, visiting and nurturing customers to repeatedly visit.

CRM software

To help businesses CRM software can be used. 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:  

  • Sales  

  • Marketing  

  • Customer service management 

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


This section lets you input prospects and potential sales value. You can report on won or lost sales. This is helpful to forecast and understand barriers to a sale that can be fed into product development.  


Using the database as the source you can identify contacts to receive your marketing and log this against the contact. Some CRMs can send emails directly or integrate with other tools. Ultimately, the aim is to record that this person has been sent marketing so that you can; measure its success, avoid over-communication and Sales can use this information to close a sale.  

Customer service management  

Log and monitor customer service complaints or queries against a customer. Just like the payment information this can be helpful for everyone to understand the issues a customer has been experiencing so that when you next have an interaction with the customer you can reference the solution and show empathy and that you know about them.  

An important by-product of CRM software is business intelligence (BI). By using the software to log communications and actions, very useful reporting can be provided. This reporting and BI can be used to develop product, identify staff needs and areas for growth, and forecast. 

What are the benefits of CRM?

Traditionally the value of CRM favoured business through improved processes and efficiencies. Customer value from CRM has always existed as one of the aims is to generate repeat custom which cannot be achieved without meeting the customer’s needs. The importance of customer value has increased through the years. There is now much more of a shift to putting the consumer front and centre, providing more value to your customers by not just meeting their expectations, but exceeding them.   

Some businesses have changed customer relationship management to customer managed relationships (CMR). CMR goes beyond serving the needs and wants of customers to giving them control about all aspects of the relationship.  

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.  

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. Achieving a SCV can be complex but a very simple way to do this is to always obtain an email address from your customers and match all bookings back to this email address.  

Choosing CRM software

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