Simple Definition
Customer Relationship Management (CRM) software is a tool used to collect, manage, and report on the data that is essential to a business. CRMs often serve as the source of truth for data with all related and connected external systems.
“A CRM system gives everyone — from sales, customer service, business development, recruiting, marketing, or any other line of business — a better way to manage the external interactions and relationships that drive success.”
What does the definition actually mean?
While every organization and its process is unique, every business or nonprofit…
Has to promote itself with Marketing to potential Leads (the demand) who may want what the business is offering (the supply)
moves the Leads into the sales pipeline when they become Opportunities, by adding items to a cart on a website, entering a store, or setting up a consultation, for example.
has Contact with a person individually as a consumer, or on behalf of a business or organization.
interacts with Accounts (i.e., customers, vendors, partners, employees, donors) to exchange one or more items (i.e., products, services, money, promotion).
What would a real-life example look like?
What has just been described in four points are the core data objectives of a CRM for a department to follow a journey and pass the data through to each step in a business’ pipeline. This pipeline could be anything (i.e., subscribers, fundraising donors, accounting services), but here is a real-life example…
Lead example: a consulting service gets a referral, they capture that contact information as a Lead in their CRM, and all the information about the client’s information from their first meeting, in order to determine if this is a valid revenue opportunity, and qualify the Lead.
What is a Lead?
Opportunity example: that same consulting service since qualifying the Lead now promotes it to the pipeline so the potential sales can be forecasted with the close probability percentage as the client moves through the steps in the selling process, until closed by the signing of a contract if won, or marked as lost if no agreement was made between both parties.
What is an Opportunity?
Contact example: the data points from the contact information captured on the Lead is mapped to a record specifically assigned to that Contact, and is related to the Opportunity in the pipeline, as well as the Account (company, see next bullet point). By relating the Contact to the Opportunity and Account, the Contact serves as the primary point of contact for the deal
What is a Contact?
Account example: the Account in a CRM is the Company that the Contact is engaging the consulting company’s service for. If the Contact is a person without a company, then the Account is that person acting as a company, that is a specific scenario handled differently by varying CRMs.
What is an Account?
