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CRM 101 – The Basics of Customer Relationship Management

Kausik Dutta

October 24, 2006

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What is CRM?

CRM, or Customer Relationship Management, can be defined as a software program, business strategy, or internet system that helps a business manage and organize its customer database. This includes contacting customers more efficiently, keeping leads hot, aiding in workplace effectiveness, and generally improving customer service and business relationships.

How Does CRM work?

Essentially, CRM works by allowing a representative or agent to access detailed customer information quickly and efficiently while the client is on the line. This means less hassle for the client and a quicker transaction.

For example, say a client contacts a company representative about possibly purchasing the company's product. With CRM, the representative would be able to see if the client had bought anything previously, and if so, what their name is, their age, how long they've used the company, what products they've bought before, how often they buy the product, and much more. This would then allow the representative to suggest and recommend the product or service option that best suits the customer in a timely manner.

Who does CRM benefit?

The beauty of CRM is that is benefits both the customer and the business or service provider. Customers receive a higher level of customer service because their needs are met and anticipated, allowing them to relax through transactions that are often much quicker than they're used to.

The business benefits via improved sales, higher customer confidence and satisfaction, and a more effective work environment. With CRM, a small business or large corporations can know what its customer wants; thus it can provide the service or product the client wants, keeping them as a repeat customer and gaining greater sales volumes.

What are some CRM applications?

CRM applications are created around the same idea as a spreadsheet, where values can be filled in and tabulated to quantify, analyze, and interpret data. A CRM application can both collect and analyze information simultaneously. This means faster, better applications and better ease of use. Clients can download, share or install these programs at their leisure via sites like

What is online CRM?

Online CRM is where a business uses an online system to manage its CRM. Straightforward and easy, online CRM is an option often taken by smaller businesses as it allows any representative to access a client's information immediately, without hours of tedious training. A example of an online CRM system might be a 24-hour call center.

What is web based CRM?

Web based CRM is where a business uses real-time updates that are integrated with their existing CRM system. This allows new information to be accessed immediately without any time lapse. It is different from a software-based Customer Relationship Management program in that it allows for live, as-it-happens updates. Thus customer information is always fresh and current.

How do CRM systems help businesses?

CRM systems help businesses by improving customer service and relationships, generating quality leads, monitoring accounts more effectively, always keeping data fresh and ready so leads don’t grow cold, allowing mobile CRM (orders through a mobile device), and managing sales.

Keywords: CRM, or Customer Relationship Management


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