Customer relationship management (CRM) refers to methodologies, software and Internet capabilities that allow companies to manage their relationships with current and potential customers. Companies often use CRM software applications to organize, automate and synchronize sales, marketing, customer service, and technical support. These applications are available most often as on-premise or through software-as-a-service (SaaS).
CRM solutions provide companies with the customer data they need so that they can provide services or products that their customers want, provide better customer service, cross-sell and up-sell more effectively, close deals, retain current customers and better understand who their customers are.1
CRM Capabilities
Most CRM applications include the following capabilities:
- Sales force automation (SFA): This integrates and automates sales processes, including opportunity management, quote and order management, sales forecasting, order management, fulfillment, and incentive compensation management.
- Marketing automation: This software automates the entire marketing process, with capabilities that include campaign and email management, lead reporting and analytics, website search engine optimization and landing page and form creation.
- Customer support and service: These capabilities include case and ticket management, customer portals, time tracking and knowledge management.
Some CRM solutions also allow companies to better manage their channel relationships with functions such a secure partner portal and analytics.
The Rise of CRM
CRM applications can trace their roots back to the 1980s, when database marketing, which collected and analyzed customer information, emerged as a new, improved form of direct marketing. Robert and Kate Kestnbaum, pioneers in this area, introduced metrics such as customer lifetime value, and the application of financial modeling and econometrics to marketing strategies.2
In the mid-1980s, contact management software (CMS) applications such as ACT! appeared on the business software market. These programs let companies store and organize customer contact information—basically, they functioned as "digital Rolodexes."3
In the 1990s, CRM software made some major advances. Contact management software evolved into SFA software, with Siebel Systems becoming one leading provider. By 1995, the term "customer relationship management" came into use. In the last half of the decade, enterprise resource management (ERP) vendors such as Oracle, Baan and SAP entered the market, and the competition led to more marketing, sales and service features being added to CRM. At the end of the decade, "e-CRM" vendors came onto the scene, and the first mobile CRM application appeared. Even more importantly, the first SaaS CRM applications were introduced.
The dot-com bust of the early 2000s hit the CRM industry hard, particularly e-CRM vendors. Influenced by Paul Greenberg's book CRM at the Speed of Light, the industry began focusing on more comprehensive CRM applications, as well as solutions that could interoperate with legacy systems.
At the end of the decade and through to the present, cloud-based and SaaS CRM solutions began to conquer the market thanks to their lower cost, speed of integration and flexibility. By the end of 2012, four out of every 10 CRM systems sold were SaaS-based, and the market experienced 12% growth in 2012, three times the average of all other enterprise software.4
With the rise of social media, the term "social CRM" came into play, referring to customer relationship management fostered by communication with customers through social networking sites like Twitter and Facebook.5
Driven by high levels of investment in digital marketing and customer experience initiatives, the worldwide CRM software market reached $20.4 billion in 2013, up nearly 14% from 2012. More than 41% of total CRM software revenue in 2013 came from software-as-a-service (SaaS) solutions, as "organizations of all sizes sought easier-to-deploy alternatives to replace legacy systems, implement net-new applications or provide alternative complementary functionality."6
CRM Trends Today
Most experts agree that we have entered the age of the customer. In today's digital, mobile and social world, the linear sales cycle of previous generations has given way to a customer lifecycle in which buyers hold the power.
As a result, visibility into the entire customer lifecycle is becoming increasingly important. In addition to traditional CRM capabilities like SFA, customer support and marketing automation, companies are seeking CRM solutions that can also deliver quotes, order management, commissions, sales forecasting and integrated ecommerce capabilities.
Support for mobile devices—iOS, Android and Windows Phones—is becoming a must-have for CRM solutions. Business users today require real-time access to the information they need, whether it's the latest metrics, calendar information, customer details and more. Real-time data and access anytime, anywhere is also a critical component.
Another trend is integration with leading social and productivity tools. Companies want CRM applications that will integrate with standard social solutions such as Yammer and Qontext, as well as with leading email and productivity tools such as Microsoft Outlook and Google Apps.
Conclusion
Finding a cloud-based CRM system that delivers all of these capabilities might seem like a daunting task. The previous having been said, the right solution and provider can help transform customers' experience with a company, increase sales, provide valuable insights, streamline processes, and make sales organizations more efficient.
NetSuite CRM+ software is the only cloud solution that delivers a real-time 360-degree view of the customer. NetSuite CRM provides a seamless flow of information across the entire customer lifecycle from lead through to opportunity, sales order, fulfillment, renewal, upsell, cross-sell, and support.
Take a look at NetSuite CRM+ to see how we help businesses everywhere grow their companies with customer-centric CRM.
1 https://www.webopedia.com/TERM/C/CRM.html
2 Direct Newsline, November 18, 2002 (https://en.wikipedia.org/wiki/Database_marketing#cite_note-2).
3 "A Brief History of Customer Relationship Management," CRM Switch, December 2013.
4 Columbus, Louis, "2013 CRM Market Share Update: 40% of CRM Systems Sold are SaaS-Based," Forbes.com, April 26, 2013.
5 SearchCRM.techtarget.com (https://searchcrm.techtarget.com/definition/social-CRM).
6 "Market Share Analysis: Customer Relationship Management Software, Worldwide, 2013," Joanne M. Correia, Yanna Dharmasthira and Chris Pang, Gartner, May 2014.