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What is Customer Relationship Management (CRM)?

Strategies and tools to grow sales

Tracking lead and account communications and data across teams and departments becomes increasingly difficult as a sales organization grows. A customer relationship management (CRM) strategy and system can streamline the sales cycle and make the account management and support process more collaborative.

 

In this guide, we'll explain what customer relationship management is and how sales organizations can benefit from it strategically. We'll also discuss different CRM tools and use cases to consider. Finally, we’ll suggest system integrations to help with automation — allowing sales teams to identify and nurture high-quality leads to close deals faster.

Learn about Customer Relationship Management:

What is Customer Relationship Management (CRM)?

Customer Relationship Management (CRM) is a strategy used by sales organizations to manage lead and account information, enhancing customer experiences. Often associated with SaaS platforms like HubSpot's Smart CRM, Microsoft Dynamics 365 for Sales, or Salesforce, CRM is now seen as a complete technology system that helps automate and personalize lead and account interactions at every point in the customer journey.

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Why is CRM software important for sales teams?

Using customer relationship management processes and software, sales organizations can collaboratively track, prioritize, and optimize external lead and account interactions by hosting the data in one central location. 

 

Sales reps can upload and update customer contact and call data online from anywhere, preventing service delays or loss of vital account insights when switching accounts or leaving the company. 

 

Data analysis tools and dashboards within the customer relationship management software also help account teams and reps to accurately forecast and develop monthly, quarterly, and annual sales plans using sales pipeline and lead- or account-tracking insights, often powered by artificial intelligence.

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Strategic benefits of investing in CRM tools

Long-term benefits of tracking and updating all account and lead communications and data using customer relationship management software include the following:

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Increased customer satisfaction and loyalty

Teams will always know where leads and accounts are within the sales funnel and can quickly update and access their information, as well as historical notes on past calls and emails, to understand those customers better. This CRM data can include a prospect’s contact info, details on past purchases, challenges or needs, and any special offers or strategies previously used to keep them happy and loyal.

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Improved customer service

Sales organizations can use notes from customer support or contact center calls, chats, or emails within the customer relationship management tools to personalize their interactions and identify areas where account teams or reps require further training or other automated strategies to enhance customer service. 

 

They can also identify touchpoints within the sales cycle (e.g., lead discovery calls or post-purchase customer service calls) where they may be losing customers and need to prioritize immediate outreach or change their support strategy to boost customer satisfaction and retention.

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Increased sales and profits

CRM forecasting and analysis tools give sales leaders greater visibility into every account team’s sales pipelines, so they can identify upselling and cross-selling opportunities to boost customer lifetime value (CLV) and develop long-term account growth strategies. These insights can also help teams develop processes to shorten the sales cycle and streamline efforts by learning more about customer purchase behaviors, needs, and challenges.

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Expanded functionality

CRM platforms often integrate with sales and marketing tools, enabling automated emailing to new leads and streamlining repetitive tasks like data entry through AI. This enhances efficiency in capturing contact information and supports sales team functions.

 

Some platforms, such as Salesforce, Hubspot, and Dynamic365, sync with tools like LinkedIn Sales Navigator, and can to update CRM information for key leads and accounts. This seamless CRM integration process allows businesses to bring existing contacts and information while keeping it up-to-date. This enables teams to identify mutual social media connections and gain insights into account user activities to tailor their outreach, relationship-building, and proposal strategies.

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What does a CRM system workflow look like?

Below is an example of a customer relationship management system workflow related to the four stages of customer relationship management: Awareness, exploration, expansion, and commitment or dissolution.

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Awareness

As a new lead comes into the CRM tool via inbound or outbound sales and marketing strategies (e.g., contact forms or cold calls), sales leaders or automated systems can categorize and assign priority prospects to an account team or rep for follow-up. At this stage, prospects are aware of a product or service, but not all are in the interest or exploration phase yet, or are not ready to commit to a sale.

Exploration

If a sales organization uses email automation, the customer relationship management system will determine from contact form data whether a lead requires nurturing through other marketing campaigns or direct sales follow-up to drive interest in a product or service. Prospects receive pre-written, automated messages (either from the marketing team or a sales rep) tailored to each phase of the buyer's journey until they are identified as a high-quality lead.

Expansion

If the lead has been categorized as high-quality, and the prospect is actively looking to commit to a quick purchase, automated CRM systems or sales leaders may assign an account team or rep to set up a discovery call. On this call, they’ll ask questions to qualify the lead further and better understand the sales opportunity.

Commitment or dissolution

After qualifying a lead, account teams will track each call in the CRM system and include notes and the next steps from the discussion to work towards a purchase commitment. They can also identify where each lead or account is in the sales pipeline and add a target deal size for the opportunity. This information can then be used to develop sales plans for each lead or target account. Progress will then be tracked in the CRM system until a deal is closed or the customer decides not to make a purchase and walks away.

Diagram for workflow > Awareness: Leads are categorized and qualified into the CRM system. > Exploration: Short-term prospects are assigned to account reps for immediate follow-up. > Long-term opportunities are nurtured via automated sales and marketing tactics until they become high-quality leads. > Expansion: Customer interactions (e.g., discovery call details) and follow-up insights are inputted and stored online for on-the-go access to move customers toward purchase consideration. > Commitment or dissolution: Pipeline data and proposal insights are used to develop sales plans to close deals and grow CLV. Or to keep for future sales opportunities when deals are lost.

Different types of CRM tools and use cases

Below are some customer relationship management tools and use cases sales teams can consider when selecting the right solution for their business.

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On-premise sales CRM

Large sales organizations may create and host their own CRM solution managed and hosted on-site by an IT department. The strategic benefit is only they have access to their customer data.

 

However, an on-premise CRM solution requires the organization to be solely responsible for managing software updates and maintaining a high level of security – so that information is not stolen or lost. There might also be development delays (depending on available IT department resources) when businesses want to integrate other platforms into the CRM to automate sales and marketing processes, improve team collaboration, and increase data analytics capabilities.

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Cloud-based or on-demand sales CRM

Cloud-based CRM solutions are developed by an outside software-as-a-service (SaaS) platform team and don’t require hardware or special installation instructions to get deployed quickly.

 

Reputable cloud-based solutions follow the most up-to-date security protocols and offer third-party integrations so businesses can safely customize the product to their needs.

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Social media CRM

This term refers to integrating third-party social media platforms into an on-premise or cloud-based CRM solution. The strategic benefit is that sales and marketing teams can make it even easier to communicate with customers — wherever they prefer to be contacted. 

 

In the case of LinkedIn Sales Navigator, sales teams can also integrate first-party user profile data, along with insights on their LinkedIn activities, with platforms like HubSpot, Microsoft Dynamics, and Salesforce. Account reps and teams can quickly identify highly qualified leads and target accounts and send unlimited direct messages that they can personalize for an individual's specified role and interests.

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Marketing CRM

Marketing customer relationship management platforms help teams collect new lead and prospective account information — typically generated through inbound marketing strategies (e.g., content marketing, social media, and live events or webinars). That data is then shared with sales leaders and teams for direct follow-up — especially when the lead has been qualified as high quality, often through automated email campaigns.

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Potential CRM challenges (and how to solve them)

There are always challenges associated with each CRM solution and its integration opportunities.

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Some CRM systems are more complex than others

The more complex a CRM system becomes, the more internal resources or money it will require to keep it running smoothly. It’s best to start with the basics and add new integrations or customer relationship management services as businesses scale.

Their costs will vary based on company size and needs

The customer relationship management platform’s cost will vary based on the solution provider, specific features required, and the number of users (or seats) a business assigns to its sales team. Basic platform usage is often billed monthly per user, and companies can adjust their plans and feature or integration add-ons as needs change over time. 

Cybersecurity threats must be considered

Cybersecurity threats and personal data privacy are always a concern when shopping around for the best customer relationship management software solution. When evaluating different tools for customer relationship management, ask each solution provider about their privacy and security policies to compare the best plans and avoid potential data breaches. 

 

If a sales organization wants to build an on-premise solution instead, ensure the IT department has the resources and time available to keep the platform up-to-date with the latest security requirements for collecting and storing customer data – along with new integrations and features that are on par with SaaS customer relationship management services.

Maximize CRM usage with automation and social integrations

Customer relationship management strategies, platforms, and systems allow sales organizations to collect, categorize, and store lead and account information in one place. The baseline benefits include logging customer outreach and support, better sales and marketing team collaboration, and improved data analysis for sales planning and forecasting. 

 

These benefits can be enhanced strategically through third-party CRM integrations to automate repetitive tasks, gain deeper customer insights using social media and AI, and build a highly efficient customer relationship management system for faster sales growth and better customer support, satisfaction, and retention.

 

Consider that LinkedIn Sales Navigator has CRM integrations with companies like HubSpot, Microsoft, and Salesforce, helping to ensure up-to-date customer information directly from your existing contacts list. For instance, using LinkedIn Sales Navigator allows sales teams to better understand customer needs and challenges, paving the way for more personalized, warm lead introductions. This data also helps account reps and teams to nurture and build better customer relationships over time.

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