Customer Relationship Management: A goldmine of opportunity and far more than software

Customer Relationship Management harbors a lot of potential for businesses of all kinds. Using the right tools and strategies, it leads to highly profitable customer relationships. Find out what CRM is all about, what benefits it brings, and how to use it effectively.

Customer Relationship Management - an overview

Table of Contents

What is CRM?

CRM (Customer Relationship Management) is a strategy that companies use to manage interactions with current and potential customers. It combines all the information from sales, marketing and customer service to identify the touchpoints that occur during the customer journey. With the use of a CRM strategy, you can better understand your customers and help them when problems arise. After all, the relationships you foster with your customer base determine the success of your business.

CRM typically also refers to software that is specifically tailored to customer relationship management. This is a database application that provides a structured and automated record of all customer contacts and their data. 

The software can also store details such as the customer’s personal preferences with regard to communication. This systematization of customer processing goes far beyond customer acquisition. CRM software ultimately helps you manage customer data efficiently, improve your customer relationships, and increase profitability.

Who should use CRM systems?

You’re probably wondering if CRM is even suitable for you, or your business. The short answer is that any business that wants to maintain and grow a relationship with its customers can benefit from using a CRM system. 

CRM is suitable for businesses of all sizes. Even small companies can benefit from having a structured record of their customers and even more so from expanding their customer relationships.

What are the advantages of CRM?

    Because of the increasing importance of customer loyalty management, more and more IT systems are being developed to solve the problems of dealing with customers. These technical solutions have become the foundation of a successful CRM. Implementing a CRM solution takes some time and budget, but it offers you many advantages:
    • A deeper understanding of specific customer requirements
    • Improved profitability by focusing on the most profitable customers and taking a more cost-efficient approach to the less profitable customers
    • (Optimization of the Customer Acquisition Costs CAC )
    • Effective targeted marketing communications specifically designed to meet customer needs
    • A more personal approach to customer relations
    • Increased customer satisfaction and customer loyalty
    • Reduced costs in connection with the support and care of customer
    • Increased overall efficiency and reduced total cost of sales
    • improved contact management simplifies teamwor
    • more accurate sales forecast
    • increased marketing ROI
    • reliable reporting
    • increased productivity

Your company is missing out on a lot of potential in CRM?!

The different types of CRM

Today, many companies use three main types of customer relationship management, namely operational CRM, analytical CRM, and collaborative CRM.


Operative CRM

The operational customer relationship management supports business processes that involve direct interaction with customers through all communication channels such as telephone, fax and e-mail. 

Details of each interaction with the customer, including their requests, preferences, and topics of conversation, are stored in the contact history and can be retrieved by your employees as needed. 

Some examples of operational CRM applications include sales automation, customer service and support, and enterprise marketing automation.

Analytical CRM

This form of customer relationship management enables you to analyze customer data generated by operational CRM systems. It helps you understand customer behavior and derive their true value to the company. Based on this, customers can be targeted with relevant information and offers that meet their needs. 

Analytical CRM solutions use marketing tools such as data mining to extract meaningful information about your customers’ buying behavior and your target market. This is an important step that can help improve the performance and relevant targeting of your business. 

Collaborative CRM

Collaborative CRM systems simplify cooperation with customers, suppliers, and business partners. This improves sales and customer service across all marketing channels. 

The primary goal of collaborative customer relationship management is to improve the quality of services provided to customers, thereby increasing customer loyalty as well as customer value. Examples of collaborative CRM solutions are Partner Relationship Management (PRM) and customer feedback.

CRM Kreisdiagramm
Elements of Customer Relationship Management (Figure: tractionwise)

How to use CRM effectively

1. development of a customer-centric business strategy

CRM implementation does not begin with the selection of the software to be used. It starts with creating an overall strategy that will serve as the backbone of your customer relationship management. This step involves determining your business goals and identifying the core challenges of your target audience. For example, goals might be to increase annual sales by an additional 20%. By identifying your customers and prospects, you’ll get an idea of how to reach them. Feel free to read our article “What Customers Want” about what options you have here. 

Gather customer information such as age, location, generation, marital status, education, job status, income, goals, challenges, interests, values and personality. To do this, there are many options. For example, you can survey your employees who have more direct contact with your customers. Customer surveys are also a good way to do this.

2. Create a customer journey map

A customer journey map is basically a roadmap that shows how a customer or prospect interacts with your company. This includes your operations, marketing, sales, service and support departments that may “touch” a customer. So-called touchpoints include:

  • your website
  • E-Mail marketing
  • Social-Media-Account
  • Google-ratings
  • Paid ads
  • Chatbots

The Customer Journey Map helps you find the right software for your teams. If you have a lot of customers contacting you via chatbots, you can use automated software for live chats. This will allow you to not only customize the chatbot conversations, but also determine how the bot will interact with your customers.

CRM goes hand in hand with Customer Insights!

Customer Insights Suite Light dark version

3. allocation of team roles

Whether you’re implementing CRM for the first time or simply moving to a different platform, you need to decide who gets access to it. You should involve all relevant sales, marketing, and support personnel in all phases of customer relationship management. 

You have to determine what access rights each team member should have. For example, you may want a CRM administrator who is familiar with the specifics of the platform and all business processes. For small businesses, this could be an office manager, the IT manager, or even the business owner.


4. identification of team goals and KPIs

You should also set goals for each group that will be involved in retention management. These goals should be tied to the overall business goals. Once you know these goals, you can not only evaluate your team’s performance, but also figure out which CRM solution is right for you. 

Example: You find that an unmet sales goal is the result of insufficient follow-up emails. In this case, it would be recommended to use a CRM solution that is able to send automated follow-up emails and track the effectiveness of the emails.

Other than the goals, you should also determine your key performance indicators (KPIs). These are metrics used to measure the performance of an individual, team, or organization based on established goals.

If, for example, your sales team uses CRM, their performance can be tracked by looking at current sales and comparing them to expected monthly sales or quotas.

5. determine the CRM components

In this step, you identify contacts and requirements, and select the necessary additional solutions. For example, as a contact you can enter a customer with full name, email and phone number. Some CRMs even give you the option to label your contacts. For example, you can enter those who have downloaded e-books from your website under the “Leads” category.

What you should also do is set up a meeting with the sales, marketing, and service teams. Ask them what software they currently use and if they need a CRM system. For example, the sales team might use the software to send automated follow-up emails, while the service team might use the software to automatically respond to frequent customer inquiries. 

6. The choice of the right CRM-Software

Die Kosten von CRM-Plattformen können je nach ihren Funktionen und Fähigkeiten variieren. Bei einem CRM für ein kleines Unternehmen kannst du davon ausgehen, dass du zwischen 10 und 50 € pro Monat und Benutzer zahlst. 

Eine Software, die für spezifische Bedürfnisse entwickelt wurde und über integrierte Tools verfügt, ist kostspieliger. Wenn du mit deinen Teams sprichst, erhältst du ein besseres Verständnis für benötigten Features des Programms. Um einen ersten Eindruck zu erhalten, kannst du dich für kostenlose Testangebote anmelden.

7. test your CRM software and conduct ongoing training for your employees.

The last step of CRM implementation is to test how all the components of the platform work together to achieve the business goals. You might test, for example, that all website forms display correctly, that all emails are sent to the right contacts at the scheduled time, and more.

For those using the CRM, ongoing training is critical to ensure your team is using the software as intended. Completely regardless of which system you’re using in the process, whether it’s Salesforce, Hubspot, Pipedrive, or other more or less well-known players. This is especially important if there are new platform features that need to be implemented as well.

FAQ - Questions about Customer Relationship Management

  • First of all, almost no company starts from scratch in customer relations. Therefore, it makes sense at the beginning to get a clear overview in a data collection. Where is data currently stored around customer relationships. This can be in spreadsheets or Excel tables, in existing CRM systems, in social business networks like Xing or Linkedin. For this activity, a project team can already make sense. 
  • Based on this status quo, you develop a goal for where you want to go with the customer relationships. After all, without a goal, every path is the right one. 
  • Following are the steps (partly individually also different and adapted) : Setting up a holistic customer relationship strategy and defining the necessary business processes, obtaining buy-in from the employees concerned, cleaning up the database, migrating data, integrating a selected CRM solution into the IT landscape, pilot operation, and finally rollout. 

Using CRM software, you can identify and resolve your customers’ problems earlier, focus specific actions. It allows you to make special offers, be reliable and responsive, and maintain and perfect the human element.

In order to build up a history of the relationship with your customers, you store documents such as invitations, offers and invoices. Appointments that you have with the customer or tasks, such as research or preparation of offers, are also included in the customer history, so that you can determine when you received and gave which information.

  • The company Capterra has conducted a survey on CRM software usage in Germany. The top 5 functions used in CRM include the following:
    • Contact-management
    • Customer service
    • Scheduling
    • Reports & analysis
    • E-Mail-Marketing 

An old marketing saying goes that it costs five times as much to acquire new customers as it does to maintain existing ones. That’s why building long-term customer relationships is so important for a healthy business.


Customer relationship management is not a sprint – it’s a marathon. It ultimately takes time to build strong customer relationships. You need to focus on improving the customer experience to do this. 

Combined with the right strategies and software, you can successfully engage with your customers and stay competitive in today’s crowded marketplace. 

However, CRM can do much more, so it has a big part in your company’s success, efficiency and profitability.


About Me

As a founder and entrepreneur, I experience daily how important customer centricity is for companies.

Incorporate the essential perspective of the customer into your product genesis and marketing processes. That puts horsepower on the road and keeps your business on track.


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