CRM (Customer Relationship Management)
A CRM (customer relationship management) is a system for capturing and steering all of a company's relationships and interactions with prospects and customers centrally. It brings contact details, communication history, quotes, orders and tasks together in one place, so marketing, sales and service draw on the same state of information. In online marketing the CRM is the backbone of lead generation, because it accompanies prospects from first contact to the close. Modern CRM systems also automate recurring tasks and supply metrics for steering sales.
Also known as: customer relationship management, CRM system
What does a CRM system do?
A CRM system replaces scattered Excel lists, email inboxes and notes with one central data basis. Every contact gets a complete history: when first contact came about, which offers were made, which emails were sent, which meetings were arranged. Everyone on the team thus knows immediately where a relationship stands, without having to ask around or losing information.
CRM systems also represent the sales process as a pipeline. Every deal passes through defined stages from first contact to close. It thus becomes clear how many opportunities sit in which stage, where deals get stuck and what revenue can realistically be expected. That makes sales plannable and manageable.
Many CRM systems connect sales with marketing automation. They capture leads from Landing pages, rate them by behaviour and hand them to sales at the right moment. An end-to-end process from the first ad to the paying customer thus emerges. Meaningful metrics can also be derived from the data gathered: close rates per source, average sales cycle or the likelihood of a deal being won at a particular stage for instance.
CRM systems compared
In choosing a CRM, what matters is less the maximum range of features than the fit to company size and processes. Salesforce is the market leader for complex enterprise requirements with nearly unlimited scope for customisation but takes time to learn and budget to run. HubSpot scores with close integration of marketing, sales and service and very accessible operation.
Pipedrive focuses on sales and convinces small and mid-sized teams with an intuitive, visual pipeline. Zoho CRM offers a broad, attractively priced feature set and is part of a large suite of business applications. Which system fits depends on your size, your integration requirements and your budget.
The table below sorts the four common systems by audience, strength, integration and price bracket.
| System | audience | Strength | Integration | Price range |
|---|---|---|---|---|
| Salesforce | Enterprise, large teams | Customisability, ecosystem | very extensive | Enterprise |
| HubSpot | SMEs, marketing & sales | All-in-one, usability | extensive | free to enterprise |
| Pipedrive | Small sales teams | Pipeline, simplicity | solid | from ~ a low monthly price |
| Zoho CRM | SMEs, price-conscious | Breadth of features, suite | extensive | from ~ a low monthly price |
CRM, marketing and data protection
A CRM naturally processes large amounts of personal data and is therefore particularly relevant under data protection law. For every system you need a data processing agreement with the provider. With cloud CRMs whose servers are outside the EU, additional safeguards for the transfer to a third country are required, which is to be observed with US providers such as Salesforce or HubSpot.
The legal basis for storing and using the data matters too. Anyone collecting contacts from forms or newsletters has to document consent and purpose cleanly. The CRM should offer features for deletion periods, subject access rights and consent management, so GDPR requirements can be met in practice.
Used correctly, a CRM is also a tool for better data protection, because it centralises data instead of spreading it across many uncontrolled spreadsheets and inboxes. Clear access rights ensure only authorised people see sensitive information.
Rolling out a CRM successfully
Introducing a CRM rarely fails on the software and often on the process. What is decisive is that the system is filled and used consistently. An empty or half-heartedly maintained CRM brings no value. The rollout should therefore proceed step by step and involve the team from the start.
A structured approach beginning with defining your own sales processes before configuring the software accordingly has proven its worth. Only once it is clear how a lead moves through your funnel can the CRM be set up sensibly.
The steps below have proven themselves in roll-outs and reduce the risk of the system lying idle after a short time.
- 1Define the sales process and pipeline stages.
- 2Choose a system that fits your size, budget and integrations.
- 3Clean up and import existing contact data.
- 4Set up connections to the website, forms and email.
- 5Train the team and set binding rules for upkeep.
- 6Set up reports and review usage regularly.
Frequently asked questions
What is the difference between CRM and marketing automation?
A CRM manages customer relationships and the sales process, while marketing automation automates recurring marketing tasks such as email sequences or lead scoring. Many modern systems such as HubSpot unite both in one platform. The CRM is the data basis the automation builds on, to process leads from landing pages further for instance. In separate setups, a clean Interface that both systems share the same data and complement each other.
Which CRM suits small companies?
For small companies and lean sales teams, Pipedrive and Zoho CRM are often the best choice, because they are easy to use and attractively priced. HubSpot offers a free entry version that grows with the company. Salesforce is usually oversized for very small teams and more demanding to set up.
Is a cloud CRM GDPR compliant?
A cloud CRM can be run in a GDPR-compliant way but requires a data processing agreement with the provider. With US providers such as Salesforce or HubSpot, additional safeguards for the transfer to a third country are needed. The legal basis, deletion periods and rights of access also have to be implemented cleanly, for which the system should offer the corresponding functions.
How are CRM and lead generation connected?
The CRM is the destination of the Lead generation: every lead won through ads, landing pages or forms ideally lands straight in the system. There it is scored, followed up and guided through the funnel. Without a CRM, leads get lost in emails and spreadsheets; with one, the whole route from contact to customer can be steered without gaps.
Is a CRM worth it for a company with few customers?
A CRM pays off even with few customers, as soon as several people are involved in customer contact or sales processes are to be structured. Free or affordable systems alone prevent information being lost and create a shared state of knowledge. What matters is not the number of customers but how important traceable, well-maintained customer relationships are to the business.
How long does a CRM roll-out take?
The duration depends on system complexity and the amount of data. A lean CRM such as Pipedrive can be set up in a few days, while an extensive Salesforce implementation can take weeks to months. More important than speed is defining your own sales processes in advance and preparing the team to use the system consistently. A step-by-step introduction with a few core functions at the start lowers the risk of the system overwhelming people and going unused.
Related terms
Software-driven automation of marketing processes such as email sequences and lead nurturing.
The process of winning qualified prospects, along with their contact details, for marketing and sales.
A model of the stages prospects pass through from first contact to purchase.
A customer's entire journey across every touchpoint and channel.
Direct marketing by email and newsletter to win customers, keep them and grow revenue.
A marketing approach that builds reach, trust and demand with useful content instead of advertising directly.
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