What is a CRM? Customer Relationship Management


What is a CRM? It’s a popular acronym, so we’ll break it down for you. Customer relationship management (CRM) is a software system that allows businesses to capture and store business and customer data in a single database. Through reporting and analysis, that data provides businesses with insight into customers’ buying patterns, demographics, purchase history, and personal information such as their needs, challenges, goals and preferences. CRMs help you get to know your customers and forge lasting relationships with them.

CRMs automate administrative processes that are otherwise completed manually. This frees employees’ time to focus on prospect and customer interactions, instead of on time-consuming manual work.

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The brief history of CRM

CRM isn’t a new concept. Businesses have tried to maintain healthy relationships with customers since the dawn of commerce.

For centuries, those relationships were managed through interpersonal interactions such as handshakes, favors, and cordial conversations and letters. Then, came the late 1980s and early 1990s, when the first CRM software systems began to emerge.

Suddenly, all of the details from those conversations, transactions, and other interactions could be stored in a centralized database, accessible by all users.

But CRM in the earliest days was focused on sales automation only. Later in the 1990s, CRM expanded to include a separate database for customer service and support management. Towards the end of the decade, marketing automation was born and the definition of CRM was further extended, interfacing with a number of separate databases housing valuable customer data.

These earlier CRMs were used primarily by large enterprises and required IT involvement and support.

Then, in 1999, with the launch of the first software-as-a-service (SaaS) CRM, midsize and small businesses with limited IT resources gained access to new CRM technology.

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Life is nice in the cloud

SaaS CRMs allowed businesses to store data in an off-site server, commonly referred to as “the cloud.” This eliminated the need to maintain an on-site data server, saving businesses significant amounts of resources.

Plus, no software installation was necessary because users accessed their CRM via a web browser, not a locally installed application. This allowed users to access their CRM system from anywhere, at any time, by navigating to the CRM’s URL and logging into their system.

The emergence of the modern CRM system

CRM providers and loads of software startups began to develop their own cloud-based CRMs. But these systems were still expensive and came with a steep learning curve. Competition spurs innovation and as more competitors entered the market, a race to the top began.

By the early- to mid-2010s, CRM prices had dropped, competition had risen dramatically, new features were constantly added, and CRMs slowly became more powerful, intuitive, and user-friendly.

The CRM industry grew incredibly quickly. According to Statista, the CRM market with $24 billion in revenue in 2015 is expected to rise to $40 billion in revenue by 2023.

Although CRMs became more cost-efficient and feature-rich in the mid-2010s, there was more innovation to come.

Who should be using a CRM

Any business that handles sales or marketing of products or services can benefit from using a CRM. This includes both B2B and B2C businesses.


Your sales teams will also thank you for employing a CRM. Using it, your salespeople are better able to keep track of the prospects they’re courting, as well as noting trends in customer behavior. With this information, they’re well positioned to upsell and cross-sell your products and services. Sales teams can also use click-to-call functions to help save time and make it easy to keep track of all your interactions with prospects and customers so nothing falls into the cracks. They can also generate highly specific quotes as they seek new business and to run reports and invoices for existing customers. 


A CRM helps your marketing team gather valuable information from your customers, making it easier to target marketing efforts precisely and effectively. When you can aim your marketing campaigns at a specific audience, you’re far more likely to reap a good ROI, and you don’t waste the time and money that often results from an undifferentiated marketing campaign, which can end up feeling like spam.

Customer service

Businesses that choose to prioritize customer relationships find that CRMs help support teams efficiently resolve issues, and make it easy to connect customers to the right person at all times. When anyone in your organization is able to talk to any customer knowledgeably, thanks to the thorough and accessible information about that customer in the CRM, your customers feel heard, understood, and appreciated.

Why CRM matters to your business

With a CRM in place, you can better understand your existing customers and your prospects. Your CRM maintains and organizes the information you need to build a meaningful relationship with each customer and deliver the kind of service you want your customers to have. In addition, it helps you make smart decisions in the areas of sales, marketing, customer service, and workflow, while also delivering the tools you need for accurate forecasts.

Take a look at some of the specific ways in which CRM can matter to your business:

  • Upselling and cross-selling. When you understand customers’ pain points and needs, and when you can clearly see their patterns of behavior, your sales team is empowered to make the right upsell and cross-sell offers to them.
  • Risk management. The data available in your CRM helps you assign tasks and management responsibilities effectively to mitigate risk and protect your business.
  • Effective marketing. A CRM provides the data needed to target your marketing campaigns in the most effective manner, which in turn increases your overall revenue.
  • Lead prioritization. Your CRM keeps your sales team from wasting time on a lead that’s going nowhere while letting more profitable prospects slip away by helping you prioritize smartly.
  • Sales tracking. If your sales teams are on the road or otherwise working remotely, your CRM provides real-time updates and keeps communication flowing so you always know what’s going on and can allocate resources wisely.
  • Speedy data updating. Today’s marketplace demands up-to-the-minute customer information, and if your sales team is producing reports manually, they’re wasting valuable time that could go to following up on prospects and closing deals.
  • Customer response time. If your customer response times are lagging, you’re probably seeing a related drop in your customer retention rates — which means it’s time for a CRM. Through CRM-empowered live chats, video chats, chatbots, and cobrowsing, you can help customers feel heard.
  • Identification of high-value customers. Prioritization isn’t just for leads. Your CRM helps you identify high-value accounts so you can nurture them and provide appropriate incentives.
  • Accurate forecasting. Crunching numbers by hand leads to sloppy forecasts, which can lead to disastrous decisions. The accurate data provided by your CRM helps you make plans effectively.
  • Sales automation. It’s a waste of time to have your sales team doing data entry and other clerical work. Your CRM can automate workflows and follow-up messaging so your sales team can focus on high-priority tasks.
  • Time management. The real-time capabilities of a CRM means you don’t have to wait for data to be processed before you can follow up with a customer — and its mobile capacity lets you handle everything from the field when needed.
  • Cost savings. CRMs do the work that low-level staff once did, letting you use human resources more effectively — and you’ll also save on all that paper you’re not printing and filing.
  • Mobile access. Because CRMs are cloud-based, they are always available — any time of day, from anywhere in the world. That means your team can work anywhere.
  • Collaboration across teams. If your sales and marketing teams aren’t on the same page, chaos can result. Your CRM keeps communications lines open and clear, paving the way for your teams to collaborate efficiently and cohesively.
  • Easy communication. When everyone has access to all data about a customer, your customers can receive help and answers quickly and smoothly, and your teams can contact management easily when they have questions.
  • Employee orientation. Many businesses find their CRM is key to effective employee training. A tour of the CRM will help onboard new employees, communicating what to focus on and learning how to keep customers happy.
  • Complete data. When data is maintained manually, you end up with duplicate information and data that’s missing, incomplete, or inaccurate. Your CRM keeps all your data clean, easily accessible, and ready for immediate use.
  • Personalized customer experience. Your customers love it when they receive a highly personalized interaction with your company, whether they’re seeking order status or asking for help placing a new order.
  • Better customer profiles. The data within your CRM is gold for your sales and marketing team when they’re building customer personas and putting their insights to work.

When should you start using a CRM?

If you’re a brand-new startup with only a handful of employees, you may think you don’t need a CRM platform. But as you scale, adding more employees and growing your customer base, you’re likely to need one so you don’t lose leads or experience high customer churn. In fact, many companies wait too long to implement a CRM, often falling into chaos and making both customers and employees irritable.

Some solo-entrepreneurs will get a CRM out of the gate based on experience. For most businesses, though, by the time you’ve hired employee number 10, you’re likely to need a CRM. At this point, communication starts to get more difficult, and the lack of a CRM is probably resulting in a lot of wasted time and effort.

A good test is if you feel that you’ve outgrown your spreadsheets, it’s time for a CRM. If you aren’t able to identify where new customers have come from (and whether they’re responding to your marketing campaigns or not), it’s time for a CRM. If you don’t know what your salespeople are doing, it’s time for a CRM.

Many businesses find that having all the information about a customer available and easily accessible in one place streamlines their entire sales and marketing process. When your sales team can see the entire history of phone calls, online interactions, emails, and face-to-face appointments with each customer, they’re able to move customer relationships to the next level. And if you want to keep an eye on your sales team’s pipeline, a CRM provides you with the real-time data you need.

Start by using our checklist to assess your CRM needs. 


Seven hands, each holding a puzzle piece

The unified CRM: Everything under one roof

Early CRM systems did not include many marketing features. Businesses had to pay for a marketing automation solution, integrate it with their CRM, and constantly ensure data was flowing properly from one system to the other. It was costly, messy, and prone to data integrity issues.

So legacy CRM companies began to consolidate sales, marketing, and service apps, packaging them as “suite of apps” or “point solutions” or “multi-platform” CRMs. But sales, marketing, and service data were still collected, organized, and managed in separate structures.

Competition kept pushing innovation forward and now a new generation of CRM software is on the rise. These new platforms combine CRM features, including marketing, sales, and service solutions into one, unified CRM system, where all apps sit atop one data platform. This eliminates the need to purchase and integrate systems from multiple different vendors or data structures.

These next-generation, unified platforms offer capabilities that streamline business operations even further. 

Top 10 benefits of a unified CRM

Here’s our list of CRM benefits along with tips on selecting a unified CRM for your business. 

Easy integrations with third-party systems

Imagine you run a brick-and-mortar store and it starts to grow faster than you had expected. You decide to start selling your products online and need an online payment processing system.

With a cloud-based CRM, you can integrate your e-commerce system with your CRM in a matter of minutes, assuming you have accounts with both systems. Solid integrations ensure data from both systems are stored in the same place and are accessible from your CRM.


Robust CRMs allow you to customize your CRM system. You can customize data field names, automated touchpoints and workflows, dashboards, and more. You can customize your system to meet your unique needs, align with your unique processes, speak your own internal language, and more.

Intuitive user interface

Modern CRMs, like Insightly, are so easy to use that even non-tech savvy users can come up to speed in a short time. Drag and drop features make it simple to set up automations, configure workflows, run reports, access data, and more.

Man and woman staring into a screen full of charts and data

Metrics and reporting

With so much data, your CRM can analyze metrics and produce automated, customized reports to show you exactly what you need to see.

Powerful data analysis and reporting provide the insight needed to identify what’s working and what’s not. This, in turn, allows you to make more insightful decisions about growing your business and form effective forward-looking strategies.

Sales and marketing alignment

When both teams are working in the same system, with the same data, sales and marketing alignment increases. Marketing can set up automated workflows that alert sales when they need to take a specified action, and vice versa. This isn’t possible when the two teams work in silos and don’t communicate well. Plus, better alignment between teams increases transparency and accountability.

Personalized marketing

With so much data stored about each prospect and client, it is easy to review their CRM profile prior to a meeting and gain insight that will help you quickly form rapport. You can also use that data to personalize your customer and prospect interactions, delivering a personalized experience at every stage of the customer journey.

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More on benefits of using a next-gen, unified CRM

At this point, we have indirectly covered many benefits that businesses receive from leveraging a unified CRM. Below, we’ll break down a few more.

One source of data truth to unite your teams

When everyone is working with the same data, updated in real-time for all to see, you eliminate the risk of using inaccurate data.

360-degree view of customers and prospects

When all teams are using the same system, the data they enter about each prospect or customer is available for every user to see.

Every telephone call, email, purchase, complaint, and every other interaction your business has with an individual is tracked. With so much insight into who each individual is and what their needs and preferences are, developing and managing fruitful customer relationships is a breeze.

Increased sales productivity through automation

When you can create automated workflows around your sales process, your sales team becomes more productive and closes more opportunities, faster. This is because they are notified in real-time that they need to take a specified action.

Businesses can customize these workflows. The end result is less administrative work because much of it is automated. This gives sales reps more free time to interact one-on-one with customers and prospects, and form solid, trusting relationships.

Smiling woman wearing a headset and sitting in front of a computer

Better customer experience and higher customer satisfaction

With all of the data and automaton features in a unified CRM, you free up time to deliver a better customer experience and:

  • Solve customer problems faster
  • Devote more time to one-on-one interactions
  • Give customers more of what they need in your product offering
  • Proactively ask them how you could improve and serve them better
  • Save time for customers that they can spend on higher-value tasks
  • Personalize your interactions and create brand loyalty

Let’s add all this up. A better customer experience leads to higher levels of customer satisfaction. Satisfied customers are more likely to return for repeat business. When they are satisfied, they become loyal to your brand and recommend it to others.

Stacks of coins

Cost savings

Because CRM systems increase efficiency, productivity, and free up time for employees to focus on more important tasks, you and your team spend less money on time-consuming routine administration tasks.

You don’t have to get rid of employees, thinking that your CRM will replace them. Rather, keep those employees, train them well on how to use your CRM, and they will perform better, bring in more business, and increase customer retention.

As we mentioned earlier, if your CRM comes with powerful data analysis and reporting, you can gain helpful insights into what’s working in your business and what’s not. This ability to regularly measure the effectiveness of your strategy and programs allows you to quickly adjust and avoid wasting resources or missing opportunities. A fully adopted CRM can be one of your most effective tools to identify and cut unnecessary costs.

Wrapping things up

So, what is CRM? Now you know all there is to know! Whether you’re looking to set up a CRM for the first time or upgrade your existing systems, we hope the information above provides you with a comprehensive understanding of what CRM systems are, how they’ve evolved into the powerhouses they are today, and how your business can benefit from a unified CRM.

If you run a business and are not using a CRM, today is the day to start looking. Otherwise, you’ll be left in the wake of those that rode the CRM wave to success. At Insightly, you get not only CRM solutions but also the service and support you need to empower your teams, marketing automation services that free up your teams to focus on customers, and AppConnect, which enables you to build workflows and integrations with the other applications you’re already using.

If you already use a CRM, but want to review your specific business needs and see if it’s time to switch to a new system or try a unified CRM, then request a demo and an Insightly rep will reach out with the next steps.