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Article 7 min read

The ultimate guide to customer relationship management

Last updated April 5, 2024

You probably have heard the term “customer relationship management” before—but do you know how to optimize the process with tools?

If not, don’t fret; you’re not the only one. 22% of salespeople have never heard of a CRM tool. On top of that, 40% still use manual methods, such as spreadsheets and email programs, for customer data storage. Considering that CRM applications can help increase sales by up to 29%, it’s important to understand how to use this technology to nurture buyers down your sales funnel and continue the relationship once the deal has been closed.

Check out our guide on customer relationship management to learn what CRM is, why it’s important, how to select the best CRM software, and how to make the most of your CRM software.

What is Customer Relationship Management (CRM)?

At its core, “customer relationship management” is a strategy for managing potential and current customer relationships through collecting and analyzing data. You can select and implement different customer relationship management CRM process to detail how you’re going to approach your relationships with customers.

Typically, however, “CRM” refers to customer relationship management as a software (which is what we do in this article), not as a strategy. CRM tools are designed to help you efficiently manage customer data to improve relationships. Think of it as a type of intelligent database that’s built around relationships. As you insert customer info into your CRM (e.g., phone calls, emails, contact details), it not only organizes the data but also turns the data into insights.

customer relationship management

Before we dive into learning about CRM software, check out these resources to learn more about customer relationship management as a strategy and framework.

Why is Customer Relationship Management important?

By reducing inefficiencies, improving customer conversations, and offering personalization opportunities, a CRM tool helps businesses build strong relationships with current and potential customers.

  • CRM software reduces inefficiencies. Automate manual tasks, so teams are more productive and can spend more time interacting with customers.
    CRM software improves customer conversations. Streamline communication across departments, so brand messaging is consistent, and no conversation falls through the cracks.
    CRM software offers personalization. Offer more personalized experiences to your customers based on data insights, such as purchasing behavior.

Using these CRM features, businesses see greater customer retention and high-quality referrals.

For example, according to a Capterra CRM user survey, 47% of respondents cited their CRM as a major factor in customer retention. That same percentage also cited their CRM as helping to increase customer satisfaction. When potential and current customers are happy, they’re likely to not only buy your product but also refer others to your business.

Want to learn more about the value of a CRM? Check out the following resources:

Finding the best CRM for your team

Customer relationship management systems can be divided into three capability categories of CRM: operational, analytical, and collaborative. Although every CRM should have these capabilities, different companies will lean more towards a specific one depending on their needs.

  • Operational CRMs assist with managing the daily activities of company teams. For example, rather than reps having to manually create customer records, the CRM automatically inserts customer contact information into the platform. An operational CRM works well for companies with short sales cycles as these CRMs are extremely efficient.
    Analytical CRMs organize and manage large amounts of data to gain insights on the customer experience. For example, analyze past buying behavior within your CRM to determine what campaigns to roll out for certain customer segments. An analytical CRM is great for companies with heavy competition and multiple customer data points.
    Collaborative CRMs connect communication and data across a company’s sales, marketing, and support departments. This integration makes for a seamless customer experience. For example, when support members can see the conversations that sales reps are having with customers, they can offer better service that matches the reps’ messaging. A collaborative CRM is an excellent option for companies to manage pools of data across departments.

Beyond capabilities, there are many factors that go into choosing a CRM. Do you want to build your own or use a tool that’s already created? What are the goals of your CRM? How much can you realistically spend on the software? All of these are important considerations as the costs of choosing the wrong CRM are high.

Check out these resources for selecting and investing in a CRM.

How to use a CRM software

Customer relationship management software can be used by a number of departments, including sales, marketing, and customer service. Here’s how the tool is typically implemented in each department.


A sales CRM has become an essential tool for sales departments as customer activities, conversations, and tasks are spread out across sales teams. Use it to manage your sales pipeline, monitor deals, and track customer interactions and progress. Contact management, sales tracking, and CRM reports tools are all in one place with a sales CRM, so you don’t have to implement multiple point solutions.

customer relationship management

Zendesk Sell sales CRM

A sales CRM is used by both sales reps and sales managers but in different ways. Sales reps use CRMs to communicate directly with customers, while managers use the tool to monitor and assess performance data for their team.

For example, sales reps can connect with customers by phone or email, manage tasks and appointments, and keep an eye on whether or not they’re going to meet their sales quota. Sales managers can use the CRM to keep tabs on team performance and activities, complete sales forecasting, and create/review reports to see what targets were met and what areas of the pipeline need improvement.

Marketing & customer service

If you’re with a marketing department, you need to know as much as you can about customer needs. And if you’re with customer service, you need a way to quickly and easily access and answer customer questions. This is where a CRM comes in.

Marketers use a CRM to learn about leads and customers, so they are able to more effectively target them with campaigns. For example, with a CRM, you can segment customers by geography or industry. The software also allows marketers to track the effectiveness of their campaigns and determine how much revenue their marketing efforts are bringing in.

Support reps can also use a CRM to manage all customer interactions on one platform — track tickets, make phone calls, and review customer satisfaction metrics. No matter where customer interactions are coming from (social media, live chat, phone, email, etc.), your CRM should be able to create tickets based off of each interaction, so you can solve customer problems faster and more efficiently. You can also make better solution recommendations after reviewing past interactions.

Whether for sales, marketing, or customer support, a CRM is a valuable tool for all activities that involve the customer. Learn how to make the most of your CRM (specifically for sales) with the following resources:

Customer relationship management: Going above and beyond for customers

Customer relationship management is not a sprint — it’s a marathon. It takes time to develop strong customer relationships and requires a focus on improving the customer experience. However, combined with the right strategies and software, you can both efficiently and effectively manage customer relationships.

Of course, we’d like you to consider choosing Zendesk Sell as your sales CRM software. Beyond managing your customer information, our tool also provides valuable insights to improve your pipeline, sales performance, conversations, and processes.

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