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CRM is the abbreviation of “Customer Relationship Management”. By just looking at the title, it seems this concept is about dealing with customers in various manners. People commonly know CRM as customer relationship management software.

Customer relationship management, or CRM, has entered the field of management and marketing since the early nineties. At the time, a man named Thomas Sibel owned a company called Siebel Systems, where he designed and marketed software for sales automation (contacting customers, tracking orders, registering contracts, etc.).
Siebel explained that the software is responsible for customer relationship management (Customer Relationship Management). Since then, customer relationship management, or CRM, has gradually become popular and even found its way into management and marketing books. You may want to know that Siebel was bought by Oracle in 2006 while his company had nearly 4,000 customers. Oracle still sells its CRM software as Oracle Siebel.

CRM system of CRM software

There is still no consensus on the definition of CRM, and it is impossible to provide a definitive definition. Even the task of CRM is not so straightforward that when we talk about CRM, we are referring to software or a system. When we talk about systems, we mean a broad set of activities, processes, and infrastructure that must be deployed in an organization. But when we talk about software, our mind goes to one or more programs that must be installed on several organizational computers. Interestingly, there are views on CRM among both CRM providers and customers.

The group focuses more on IT, programming, and software solutions and sees CR as software that helps automate marketing, sales, and related services. If you tell this group that you want to set up a customer relationship management system in your company, they will understand this phrase:
“You are going to buy one piece of software or some software and install it.” However, there is another group that considers the establishment of a customer relationship management system beyond the purchase of customer relationship management software. These people emphasize that CRM is an attitude. An attitude that seeks to create, maintain, develop, and deepen relationships with customers. A minor issue is using technology software and tools in the deployment.

With that in mind, when Peter Drucker said, “The goal of any business is to build and retain customers,” he was talking about CRM even though many CRM software companies did not exist then.

CRM Books

The same disagreement in the definition of CRM can be seen in customer relationship management books. Some books are written as if they want to teach their readers how to work with software. Some other books are far removed from technology and focus more on the fundamentals of CRM.
There is a third category of books that have tried to take the middle way, and they mention this in their titles. For example, they write “CRM – A Balanced Approach“. With this explanation, the third category books emphasize the systemic, strategic, and infrastructural aspects of customer relationship management, software trick,s and technological elements.

Definition of CRM

Here are some standard definitions of customer relationship management. You need not memorize these definitions or bother to understand the details. Our goal is to show the diversity of perspectives on the definition of CRM. Once you have seen the definitions, we present another classification that will be more important to us:

CRM from Oracle’s perspective

This is how Oracle (the current owner of the Sibel system) defines customer relationship management:

“Customer relationship management uses tools, technology, and processes to collect and analyze customer data and use this information to improve the customer experience.”

Microsoft Perspective of CRM

Microsoft recognizes CRM more as CRM software, and its definition of CRM says so. “Customer relationship management, or CRM, is software that companies use to automate sales and marketing, as well as to manage sales and service-related activities within an organization.”

Defining CRM from Gartner’s view

Gartner, one of the IT research giants, defines CRM as entirely independent of the platform as follows:

CRM, or customer relationship management, is a macro strategy for business users to optimize profits, revenue, and customer satisfaction. To achieve this goal, CRM organizes all business activities around different groups of customers and tries to create and develop behaviors in the business that ultimately lead to greater customer satisfaction.

CRM from the perspective of the CIO site

The CIO site, whose content and articles are well-known in the field of technology and CRM, defines CRM as follows:

CRM is a strategy to understand the needs and behavior of customers to develop better and strengthen relationships with them.

Salesforce’s definition of CRM

Salesforce offers a similar definition. CRM is a strategy for managing a company’s relationships and interactions with potential and current customers and helping to increase the business’s profitability.

Types of CRM

Given the variety of definitions provided by CRM, it is essential to be able to categorize these different perspectives appropriately.

Francis Butel, a well-known CRM expert, has a simple and informative classification of customer relationship management models in his book Customer Relationship Management instead of discussing the definitions of CRM, which we review here:

CRM does not have a specific definition; Everyone has defined it in some way. There is no complete certainty as to what CRM stands for; some refer to it as Customer Relationship Marketing. However, what is more important is that customer relationship management has been considered using three completely different approaches: collaborative, operational, and analytical.

Strategic CRM (Strategic Look at CRM)

Some people who are discussing CRM and customer relations have a strategic view of this area. This means they are not limited to simple tasks such as buying CRM or setting up store sales software. Instead, they seek to organize the whole business around the customer axis. I,f in this way, for example, a CRM unit form or some people who work as customer relationship experts are considered sub-issues. The main thing is to pay attention to the concept of CRM, which is what the definition of CRM has focused on: focusing efforts on customer acquisition retention by increasing customer satisfaction and using various tools to increase customer loyalty.

Operational CRM

From an operational point of view, customer relationship management, any process that is somehow related to the customer, is equipped with automated tools using software systems. Marketing, sales, and customer service are among these processes.

Suppose someone gives you the following suggestions in a CRM consulting session:

• You need to modernize your support services and consider special software.
• An automated telephone answering system can help meet customer needs outside of office hours.
• With sales support software, anyone who contacts your sales expert can instantly see their previous purchase records and have a more effective conversation.

This view of CRM is not wrong, but we can say it is “minimal” without a strategic view.

However, most automation and software equipment can simplify customer work and increase customer satisfaction. However, the peak of the effectiveness of these activities is when the business first moves to the customer-centric and accepts that it wants to move from the product-oriented to the customer-centric.

Analytical CRM

Analytically, customer relationship management (CRM) is a tool for intelligently analyzing customer data and information for strategic or operational purposes. Therefore, if customer information is collected or processes and software are performed automatically, the goal is to gather more customer information and help them make better decisions by analyzing it.

If we want to use a more precise term, we must say that CRM, in this case, is a decision support system. For example, suppose managers decide to change the price of a product or run a customer segmentation project. In that case, they can refer to customer data and, using standard methods in data science, obtain valuable outputs and make better decisions.

CRM is different from creating a database for marketing

In some companies, when it comes to deploying a CRM system or customer relationship management, they mean registering, maintaining, and developing a collection of customer information so that they can send them promotional messages at specific times. They consider CRM to be a backbone for SMS marketing or email marketing. However, such systems are, at best, database or database marketing.

In CRM, our main priority is establishing satisfaction and loyalty and strengthening the relationship. In database marketing, the main goal is to achieve maximum sales (albeit in the short term).

Customer Relationship Management is not just a subset of marketing unit activities.

On the other hand, customer relationship management is successful when customer orientation becomes a key factor of the organization, and the customer relationship unit can interact with other units comprehensively and effectively. For this reason, we have repeatedly emphasized that customer relationship management is not a system or software; Rather, it is a new definition of the organization’s mission focusing on the customer.

In the beautiful words of Wei Kumar in the book Customer Relationship Management:

When we can say that in an organization, the mission of customer relationship would be established as the axis of operation and organizational lifestyle that:

• The production unit can improve its products by guiding the customer relationship management system.
• Human resource management, the criteria for attracting, evaluating, retaining, and firing employees, and their relationship with customers.
• The R&D unit should consider the interests and preferences of customers as one of the factors used in making decisions and evaluating its new designs.
• And the different units of the organization, all to gain more knowledge of customers.

Customer Relationship Management is not a service of the IT unit

The IT unit can serve CRM But cannot be in charge of it. Some managers think CRM is a new tool for the organization’s IT unit. To the extent that they even leave the management of CRM systems and decisions about the capabilities of CRM software to their IT specialists.