What is a CRM?

22 December 2017

Although customer relationship management (also known as CRM) refers to a set of practices and strategies that a business can use to manage customer interactions and data, a CRM software system records, stores, organizes, analyzes and streamlines this management process throughout the customer lifecycle.

In essence, a CRM tool serves as a database for all information relating to your customer. Beyond this utility, a CRM system manages workflow, automates marketing campaigns, strengthens sales and optimizes various aspects of customer service.

Its functionalities are as numerous as its advantages, but the main purpose of the practice and the software is to recognize the needs of the customers, to anticipate their desires and to reduce their efforts, basing future interactions on past data and making them less difficult. making it constructive for the client and yourself.

On-Premise CRM

The first two terms you will need to familiarize yourself with are «CRM On-Premise» and «Cloud CRM». While both have their advantages, many companies choose the former for three compelling reasons.

CRM On-Premise is a type of customer relationship management software that a company hosts on its own server. This allows for complete system customization, which is not the case for all cloud solutions. The second benefit that many companies find in it is the ability to better control CRM data.


Cloud CRM

Also called «CRM on demand», «Online CRM» and «SaaS CRM», the Cloud version of this software is contained and stored on the supplier’s server and accessible via an Internet browser.

The most popular benefits with Cloud CRM are ease of use and access. Since there is no internal software, there is no need for internal servers, installations or maintenance. The only thing a user needs to access the system is an Internet connection, which makes Cloud CRM available from any location and device at any given time.

CRM tabs

CRM tabs are used to manage customer data in a system and model it in different data folders. If it’s simpler, think of it as database tables. The Prospect tab contains data relating to your Prospects, for example, while the Contact tab contains data relating to your Contacts.

Each CRM system has a number of model tabs, the most common of which are the Prospects and Contacts tabs, mentioned above, but also Company (sometimes called Account), Transaction (Opportunity), List of offers (Proposal), Order, etc. . Most systems also allow you to add custom tabs.


In business vocabulary, a sales prospect is a potential sales contact, person or organization who expresses interest in your offer. For the CRM vocabulary, this term has the same meaning.

However, not all prospects turn into actual customers, which means that not all should receive the same CRM treatment. The system uses a number of factors to gauge the level of interest of the prospect, which qualifies them as «flawed», «lukewarm» or «hot».


Also known as prospects, potential customers are an essential part of every sales process. They are, however, difficult to obtain, and companies, large or small, are always looking for new ways to acquire them.

The different strategies for finding and recruiting prospects are called prospecting. Calls and emails are the most common prospecting practices, and they can bring in entirely new leads or retarget and nurture those that have turned cold.


Unlike telemarketing where the term «contact» generally means «cold prospect», in a CRM system, «contact» does not mean a potential customer. In fact, a CRM contact refers to a prospect who has already been converted by purchasing your products or services.

A CRM system detects the conversion of customers, automatically switching a prospect to contact status. Manual import is also possible, although you might prefer to automate the process to focus on building your relationship and retaining customers.


Since the contact is no longer a potential customer, but a converted customer, a prospect must go through several stages of CRM to be recorded in the Contact tab. The term «Transaction» refers to one of these stages preceding the purchase, but which is also associated with the post-purchase status of a buyer which the latter can benefit from by being part of your customer base.

To summarize, a transaction is a sales opportunity that you will find both in the files of your Prospect or Contact tabs. Most CRM Transactions tabs offer handy visual representations in the form of a sales funnel, so you can track and analyze their behavior throughout the process, and customize the stages they go through until they end up making a purchase.


There is so much confusion around technical sales terms like leads, leads, and deals, and it’s important to note that there are semantic nuances that are sometimes negligible but also sometimes significant. Fortunately, the situation is less complicated when it comes to “opportunities”.

In sales and customer relationship management, an “opportunity” is a synonym for “transaction”. Since opportunity management is the same as deal management, the two words are interchangeable, which is why some CRMs adopt the first term, while others use the second.


If a CRM vendor offers you account management software, it’s because that system has an interchangeable designation. The «account» within CRM software is in some cases referred to as «Business», so remember this so you won’t be confused by what you’ve purchased.

The main advantage of the CRM account is that it can be associated with both individual and multiple contacts. This tab is especially important for companies doing B2B sales, as it allows account managers to manage a number of individuals within a single company.

List of Offers

There is a long road a prospect has to travel to become a customer, and so is the road separating a product catalog from an invoice. Between these two extremes is an Offer, which in CRM vocabulary refers to a formal sales proposal with set prices that can be sent to prospects before they make their final buying decision.

Of course, the whole point of CRM job listings is to make this process smoother. This is why modern systems integrate them into product catalogs on the one hand, and automatically convert quotes into invoices on the other. For the convenience of your prospect, the offer templates can be emailed or printed.


Since money started to make the world go round, the «bill» ceased to be a technical term. CRM invoices are only a digital form of the same business instrument issued by a seller to a buyer, although they have a number of convenient options.

You should look for a system that allows you to personalize your invoices with your brand logo, as customers these days expect efficient and professional service. For the same reason, opt for a solution that allows support for custom fields, and gives you the flexibility to choose between printing your invoices and sending them directly to the customer.

In case your business provides project-based services and bills them monthly, ask for recurring billing functionality as well. This will allow you to reduce manual labor by planning invoices up front and letting automation do the rest.


In the CRM vocabulary, «Business» or «Activities» is a distinctive tab that serves to establish a single objective to be fulfilled, such as the «Task» program of project management software. Most CRM systems have a set of built-in activities such as email, phone calls, and appointments, although they can also be custom-built.


In addition to basic functionality, the best CRM systems offer a number of features designed to streamline your business processes, whether it’s sales, accounting, or customer service. The most interesting are the management and automation of workflows, both intended to increase your productivity and improve your performance.

You will be pleased to find that the CRM workflow includes most of the basic task management functions. However, the automation of daily tasks is considered the pearl of the CRM workflow. With just a few clicks, it lets you create automated responses and implement triggers for almost any CRM event, whether it’s a follow-up reminder, email to customer, or a ticket resolution.

The sales funnel

A «sales funnel» is a visual representation of sales. Some CRM solutions show all offerings at different stages while others expose the customer journey that stretches from when a potential customer becomes a qualified prospect, to their conversion to a paying customer.

Since sales are the alpha and omega of customer relationship management (acquisition and maintenance means nothing without real conversion), the funnel is the essential part of all CRM systems.

Sales pipeline

Usually used as synonyms, “sales funnel” and “sales pipeline” are not entirely the same. While they both describe the flow of leads to a sale, pipeline can refer to the current sales status of separate lines of business. For example, if your business sells cars, accessories, and provides automotive services, you might want to see how things go in each industry, individually. Thus, you will have three different sales pipelines: «car sales», «accessory sales» and «auto services».

Being a visual representation of a sales process, a CRM sales pipeline allows you to track and stay on top of each of your activities throughout the process. Sales pipelines usually have their own reporting systems.

Marketing Automation

No matter what aspect of the automated business, the principles are always the same. As with the CRM workflow, the automation of CRM marketing is triggered by a number of predefined events, thereby eliminating the need for manual work and reducing the risk of human errors.

For example – and this applies to a lot of CRM software systems that offer this functionality – a user can manage remarketing lists with minimal human involvement simply by letting the system track customer behavior. Calls and emails are also easily automated, and so is the sales funnel.

Global Client Vision

Before the advent of sophisticated technology, a «360-degree view of the customer» was a purely conceptual idea that implied the possibility of having a complete view of the customer by collecting data from all points of contact. ‘he had with a business.

Today that idea has become reality. With advanced customer follow-ups, data collectors, and analysis tools, features that all the best CRM systems provide to their users, basing strategic decisions on comprehensive customer data is no longer a dream.

Commercial process

Business processes in CRM software allow you to tailor and organize the «Activities» or «Business» tab of the system in the way that best suits your company’s unique workflow. Whether it’s task management or email marketing automation, a business process is a fully customizable and highly useful feature that streamlines virtually every aspect of your day-to-day operations.

Adoption Rate

This term does not refer to any specific functionality or element in a CRM software system, but that does not mean that it is not important for companies looking to use such a solution. On the contrary, the «adoption rate» may be the most important factor in choosing one CRM over another.

Adoption rate is the percentage of businesses that actually use the CRM solution they purchased, compared to the number of people for whom the software was too complicated to adopt. In other words, it is the guarantee of efficiency of the CRM solution.

Web form

Finally, a reliable CRM solution should come with a web form builder and a set of customizable templates to facilitate integration into sites. The purpose of a CRM web form is simple: to collect information that customers leave on the site and import the data into the system for further classification and management.

While there is no successful business without a solid retention rate, neither is there a successful business without reliable CRM. Here is a digest of everything you always wanted to know about this software solution, and we hope you learned some additional information as well. Differentiate between each term and feature before using one, then sit back and watch your customers convert to living, walking ads.

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