What is CRM: Meaning and definition
Date
November 10, 2025
Reading time
8 Minuten
At a glance
- Customer relationship management (CRM) describes the measures taken to establish and maintain customer relationships within a company.
- CRM always puts the customer at the center. This requires efficient cooperation between all customer-oriented departments such as marketing, sales, and service.
- In order to define the right CRM strategy, it is necessary to have the best possible knowledge of the individual requirements of the company and its target group.
- Consciously shaping customer relationships creates a clear strategy and lays the foundation for a high level of customer retention, customer satisfaction, and loyalty.
- Specialized CRM software supports the concrete implementation of the strategy. Here, all data and processes are bundled, structured, and managed.
What does CRM mean?
CRM stands for Customer Relationship Management and refers to a holistic strategy for actively shaping and continuously maintaining customer relationships – including all of their needs and expectations of the company. The goal is always to build long-term relationships. In short:
“CRM beschreibt die Gesamtheit aller Maßnahmen, die zur Gestaltung der Beziehungen und Interaktionen von Unternehmen sowie bestehenden und potenziellen Kund:innen eingesetzt werden.”
Accordingly, silos have no place in the CRM philosophy. Rather, it is a company-wide mindset that aligns all processes with customer centricity. This, in turn, requires a high degree of understanding of the individual customer experience across all touchpoints – from initial contact to long-term support.
In times of increasing digitalization, high market dynamics, and growing competitive pressure, companies must be able to communicate quickly, in a networked and personalized manner. Companies are therefore faced with the challenge of making relevant information available at all times and responding flexibly to individual concerns. A well-thought-out CRM strategy provides the necessary framework for this.
When implemented correctly, CRM, or customer relationship management, increases customer satisfaction, promotes loyalty, and lays the foundation for sustainable growth. It enables the targeted alignment of sales, marketing, and service processes, making it a key success factor for modern companies.
What is a CRM system?
Customer relationship management describes all measures aimed at structuring and strategically shaping customer relationships – both in contact with existing customers and in dealing with leads that are to become new customers. CRM systems are used to implement these processes efficiently: centralized software solutions that systematically collect, manage, analyze, and make customer data available throughout the company.
A CRM system acts as a digital control center for all customer-related activities. This customer relationship management software bundles information from marketing, sales, and service in a uniform database, a so-called single source of truth.
Example
Customer John Doe from Berlin is not just a name that appears in various lists with the same address, but a unique entry within the CRM system to which all relevant data can be assigned. This means that sales and accounting do not each have a Mr. Doe in their data, but rather the CRM system has stored a Mr. Doe that sales and accounting can access simultaneously with different requirements.
This consistent data foundation is essential for avoiding misunderstandings, coordinating internal processes, and creating seamless customer experiences. At the same time, customers and prospects have the opportunity to get in touch in a variety of ways via multi-channel sales.
Modern CRM systems such as Salesforce are cloud-based. They enable real-time access regardless of location, thereby promoting collaboration across teams, departments, and locations. Thanks to integrated analysis functions and a 360-degree view of the customer, behavior patterns can be identified, needs anticipated, and individual measures planned in a targeted manner. However, there are also good arguments for on-premise installation. Our comparison of on-premise and cloud CRM highlights the various reasons for this.
In addition, CRM systems can be flexibly expanded. Third-party tools can be integrated via open interfaces and integration platforms such as MuleSoft – from marketing automation tools to complete ERP systems. This creates a networked IT landscape that intelligently connects data streams and breaks down silos.
The introduction of a CRM system brings measurable benefits: processes become more efficient, data quality improves, and employees gain valuable time for customer-related tasks. In an increasingly global and digital competitive environment, this is a clear success factor.
Function of CRM in companies
The correct use of a CRM system is an expression of a fundamental strategic approach. Companies that take a holistic view of CRM do not focus on individual tools or departments, but rather embed customer centricity deeply in their corporate culture and decision-making processes.
In this context, CRM becomes the connecting element between strategy, structure, and operational implementation. The software used serves as a tool, not an end in itself. It supports processes, makes information accessible, and creates transparency. The real impact only becomes apparent when all areas of the company are consistently aligned with the needs of customers.
In strategic terms, CRM means systematically shaping relationships, actively managing the customer lifecycle, and identifying potential at an early stage. This not only allows individual sales opportunities to be better exploited, but also promotes long-term developments such as customer loyalty, cross-selling, and brand trust in a targeted manner.
Those who see CRM as an integral part of their corporate strategy are investing in sustainable growth. In markets characterized by rapid change, rising expectations, and intense competitive pressure, the ability to build and maintain relevant relationships is a key success factor – far beyond the use of technical systems.
An overview of the four types of CRM
CRM is divided into various sub-areas, each of which fulfills different functions and objectives. For successful implementation, it is crucial to understand the four basic forms of CRM and to use them strategically in combination.
CRM form | Objective | Focus | Typical functions | Units involved |
|---|---|---|---|---|
Operational CRM | Efficiency in day-to-day business | Automation and standardization of processes | Lead management, campaign management, service tickets | Sales, marketing, customer service |
Analytical CRM | Sound basis for decision-making | Data evaluation and target group analysis | Reporting, segmentation, forecasting models | Business intelligence, marketing, controlling |
Communicative CRM | Consistent customer communication across all channels | Channel control and interaction management | Email tools, call center systems, chatbots, social media | Customer service, marketing, sales |
Collaborative CRM | Cross-departmental collaboration along the customer journey | Information exchange and coordination | Shared data platforms, access rights, workflows | Sales, marketing, service, IT, management |
Only when these areas come together in a CRM system can a truly holistic approach be achieved. However, it is always important to consider which company is using the CRM system and which areas of application are particularly important. A successful craft business probably needs less analytical and more communicative elements to manage its day-to-day work effectively. A large company with numerous medium-sized customers, on the other hand, needs a very good basis for making strategic decisions.
CRM for individual departments
A CRM system delivers its full benefits when it is used across departments. Each department benefits in its own way – whether through better data availability, more efficient processes, or more targeted measures. The following examples show how CRM provides concrete support in everyday operations.
Sales: operating efficiently and with a customer-centric approach
In sales, CRM ensures transparency, structure, and targeted communication. Teams maintain an overview of sales opportunities, identify cross-selling potential, and can systematically convert prospects into customers.
1. Documentation and tracking of customer contacts
All interactions with customers are recorded centrally – completely and visible to the entire team. Conversation histories, appointment arrangements, and sales opportunities are traceable for employees at any time.
2. Automation of recurring tasks
Routine tasks such as follow-up emails, sending quotes, or scheduling appointments can be automated. This saves time and reduces sources of error.
3. Basis for personalized offers
By accessing up-to-date customer data – such as interests, purchasing behavior, or previous inquiries – offers can be tailored to individual needs and presented at the right moment.
Marketing: effectively managing campaigns
In marketing, CRM provides the basis for targeted communication. Precise segmentation and data-based evaluation enable campaigns to be personalized, efficiently executed, and measured in terms of their effectiveness.
1. Target group segmentation and user analysis
A CRM system makes it possible to group customers according to relevant characteristics – for example, by industry, region, or interaction behavior. This allows you to develop tailor-made campaigns.
2. Data-driven campaign management
Results can be analyzed in real time to continuously optimize content, channels, and timing. Successful strategies are further developed based on data.
3. More efficient processes through automation
From newsletter distribution to lead nurturing, marketing activities can be automated and scaled without additional effort.
Service and field service: focus on customer needs
CRM enhances responsiveness and service quality in customer service and field service. All customer history information is available at any time – ideal for quick assistance and long-term satisfaction.
1. Overview of customer transactions and history
Service employees and field service teams have direct access to all relevant information, including previous inquiries, complaints, or solutions.
2. Quick response to inquiries – across all channels
Incoming inquiries via phone, email, or chat are bundled in the CRM. This enables fast, coordinated processing across different channels.
3. Strengthening loyalty through excellent customer service
When concerns are resolved efficiently and customers feel understood, this strengthens the relationship in the long term – a key component of customer loyalty.
Quick summary: Advantages of CRM
Strategic customer relationship management is essential for surviving in the market and meeting the ever-growing needs of customers. This results in short- and long-term advantages in day-to-day work:
- Well-thought-out, long-term customer relationship management supports the establishment of a customer-centric approach in all departments and promotes cross-departmental collaboration.
- Teams can focus specifically on customer needs, which improves understanding of the target group and enables more accurate forecasts.
- The coordinated linking of processes in marketing, sales, and service, as well as individualized communication, contribute to strengthening customer relationships and increasing satisfaction.
- CRM creates space for a balanced approach between acquiring new contacts and sustainably maintaining existing customer relationships.
- A strategic orientation enables reliable planning and ensures that the CRM system can be flexibly adapted to future requirements within the company.
- Successes and potential can be measured using system-supported analyses. The insights gained from this are directly incorporated into the continuous optimization of customer work.
- CRM not only improves interaction with customers, but also with employees, partners, suppliers, and stakeholders – across system boundaries.
- Efficiently designed customer management strengthens sales development and at the same time creates the basis for the ongoing optimization of products and services.
CRM as the key to better customer relationships
Well-designed customer relationship management forms the strategic basis for sustainable business success. Companies that understand their customers, systematically record their needs, and cultivate relationships in a targeted manner build trust, strengthen customer loyalty, and remain competitive in the long term. With the right CRM system, a clear strategy, and a motivated team, more and more companies are laying the foundation for better processes, more satisfied customers, and measurable growth.
