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CRM is an abbreviation for “Customer Relationship Management.” At first glance, the title suggests that this concept involves interacting with customers in various ways. People commonly know CRM as Customer Relationship Management (CRM) software.

Customer relationship management, or CRM, has been a key focus in the fields of management and marketing since the early 1990s. At the time, a man named Thomas Siebel owned a company called Siebel Systems, where he designed and marketed software for sales automation, including customer contact, order tracking, and contract registration.
Siebel explained that the software is responsible for customer relationship management (CRM). Since then, customer relationship management (CRM) has gradually gained popularity and even found its way into management and marketing books.
You may want to know that Siebel was acquired by Oracle in 2006, while HitScompany had nearly 4,000 customers. Oracle still sells its CRM software under the name 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 straightforward; when we talk about CRM, we are referring to a software or System. When we refer to systems, we mean a comprehensive set of activities, processes, and infrastructure that must be implemented within an organization.
However, when we discuss software, our minds tend to focus on one or more programs that must be installed on multiple 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 to be more comprehensive than just purchasing customer relationship management software.
These individuals emphasize that CRM is a mindset. An attitude that seeks to create, maintain, develop, and deepen relationships with customers. A minor issue is the use of technology software and tools in deployment.

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

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 of books emphasizes the systemic, strategic, and infrastructural aspects of customer relationship management, software tricks, and technological elements.

Definition of CRM

Here are some standard definitions of customer relationship management. You do not need to 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’s Perspective of CRM

Microsoft primarily recognizes CRM as CRM software, and its definition of CRM reflects this. “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 comprehensive 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 that enables understanding the needs and behaviors 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 both potential and current customers, ultimately helping to increase the business’s profitability.

Types of CRM

Given the variety of definitions provided by CRM, it is essential 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 their 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 approached from three distinct perspectives: collaborative, operational, and analytical.

Strategic CRM (Strategic Look at CRM)

Some individuals discussing CRM and customer relations have a strategic perspective on 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. For example, an RMM unit found that individuals working in a stronger role are considered a sub-issue.
In this manner, the primary focus is on the concept of CRM, which is at the heart of the CRM definition: concentrating efforts on customer acquisition and retention by enhancing customer satisfaction and utilizing various tools to foster customer loyalty.

Operational CRM

From a prospective point of view, customer relationship management is a process that involves utilizing tools to engage with customers, who are equipped with automated systems using software. 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 effectiveness for these activities occurs when the business first shifts to a customer-centric approach and accepts the need to transition from a product-oriented to a customer-centric mindset.

Analytical CRM

Analytically, customer relationship management (CRM) is a tool for intelligently analyzing customer data and information to inform strategic or operational decisions. Therefore, if customer information is collected or processed and software is used to perform automatic tasks, 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 data science methods, obtain valuable insights and make more informed 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 refer to registering, maintaining, and developing a collection of customer information so that they can send targeted promotional messages at specific times.
They consider CRM to be the backbone for SMS marketing or email marketing. However, such systems are, at best, database or database marketing.

In CRM, our primary focus is on establishing satisfaction and loyalty, as well as strengthening the relationship. In database marketing, the primary 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 within the organization, and the customer relationship unit can interact comprehensively and effectively with other units.
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 can we 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 encompasses the criteria for attracting, evaluating, retaining, and dismissing employees, as well as their interactions 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.
• The various units within the organization are all seeking to gain a deeper understanding of their customers.

Customer Relationship Management is not a service of the IT unit

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