What is a CRM system?

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What is a CRM system? What is the definition? What are the advantages and disadvantages for companies and customers? In this guide, we clarify all questions about CRM.

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Everything important at a glance

  • CRM describes the totality of all measures used to shape relationships with existing & potential customers. 

  • A CRM system is a software (program) for the central management of customer data and the essential tool for implementing a successful CRM strategy . It can be connected to all systems of the company (e.g. ERP system) and thus serves as a unified data source 

  • CRM systems in the cloud, such as Salesforce , allow access from any location at any time 

  • Through a CRM system, companies have numerous advantages

  • A uniform database as a single source of truth 

  • Analysis and evaluation options 

  • 360 degree view of the customer 

  • Optimized processes lead to increased productivity & quality 

Globalization, digitization and the resulting increasingly intense competition are leading to ever higher customer expectations and demands. They expect individual advice, smooth service, and state-of-the-art products and services. The better companies understand the wishes and needs of their customers, the better positioned they are in competition. Customers are sometimes the most valuable asset for companies and the relationship with them is crucial to a company's success. 

CRM System definition

Before we delve deeper into the topic of CRM systems, we would like to give you a detailed definition. 

A CRM system serves as a tool for the successful implementation of the CRM strategy. A CRM system is software for the central management of customer data. It is not just about individual lists and notes, but holistically about all data and documents that can arise around customers or projects. The CRM system enables the exchange of information, data and files by bundling all important data of a company at a central hub and making it easily accessible for employees. With this advantage, CRM systems have become the most important type of business software alongside ERP systems today. Although such a system is not a prerequisite for successful CRM, already in medium-sized companies the acquisition of a CRM system makes sense in almost every case, if only to maintain an order of the data. 

As a rule, the use of a CRM system is always accompanied by a change in the work structures - whereas previously several differently localized entries (offline in folders, Excel, etc.) were kept for a customer, now only one digital "file" is created for each customer via a CRM system, which contains all the information. 

An example of the use case of a CRM systemCustomer Mustermann 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 data can be assigned. Thus, Sales and Accounting do not have "each" a Mr. Mustermann in their data, but the CRM system has stored a Mr. Mustermann, which Sales and Accounting can access simultaneously with different requirements.

The advantages of a CRM system - at a glance:

Many advantages of CRM systems are obvious after the preceding explanations. We have summarized the most important ones again for you here. 

For companies: 

  • Consolidates a unified database as a single source of truth in a single user interface 

  • Transparency & Connectivity 

  • Seamless communication and collaboration between employees - across departments - and partners 

  • Better analysis and evaluation options 

  • 360 degree view of the customer 

  • Identification of potential customers 

  • Possibility of process automation 

  • Informed management 

The most important: Optimized sales and service processes for increased productivity & quality bring more sales in the long term! 

For your customers: 

  • Improved and customized products and services 

  • Possibility of personalization 

  • Multichannel experience 

  • Improved buying and service experience 

In summary: Increased customer satisfaction & customer loyalty through optimized sales and service processes. 

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