CRM-Systems - A Definition

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With a customer relationship management system, CRM system for short, you can, in simple terms, manage all your customer relationships. The primary goal is to provide customers with as individual and comprehensive a service as possible in order to make the relationship long-term and profitable. CRM software provides you with a predefined structure for this purpose, in order to ensure a standardized work process in managing your customers.
This means that you can use a CRM tool to carry out more than just purely administrative tasks such as storing addresses or contact data. You also have access to completely new possibilities that go far beyond this.

With CRM software, for example, existing or newly added information can be prepared in such a way that completely new knowledge about the customer is generated. For example, with just a few clicks you can create shopping basket analyses, identify cross- and up-selling potentials or determine the buying cycle of each individual customer. More complex analyses even allow you to forecast how the customer will behave in the future. This knowledge advantage can be decisive compared to your competitors, gives you an enormous competitive edge, and thus increases your sales in the long term.
A CRM system is a central component of the software architecture for the long-term maintenance of your customer relationships. One of the market leaders for CRM systems, the company Salesforce, describes a CRM system as the ideal storage location in the company to record all the information that arises when contacting prospective customers (leads) or even customers. Not without reason, CRM has unfortunately become a synonym for software.

However, it is also linked to the management approach behind it and the totality of all processes in the company that is used to conclude sales orders and manage customer relationships. All three sub-dimensions (software, management approach, and processes) are conceptual components that make a CRM system strong. If you use CRM software but do not manage your company in a customer-oriented way, you will have problems. The same applies if you use a CRM software system but do not adapt the processes in sales, marketing, and customer service accordingly.
So when you're doing business on the Internet, keep these three perspectives in mind, and when you're using CRM software, think about using all three components: software, management approach, and business processes. Only the combination of all three components makes a real CRM system.

In which areas does a CRM system make your work easier?

In Customer Relationship Management, a distinction is made between different focuses and approaches, which often result automatically from the size of your company and your particular business model. If you are thinking about introducing CRM, it depends on which aspect of your customer relationship you want to look at and improve, because this is what the design and concept of the solution are based on. In simple terms, there are three main approaches:

Operational CRM

The CRM system forms the basis for day-to-day communication with customers - whether in sales, marketing, or support. It is especially important to maintain customer history, keep address data up-to-date, and address the customers at the right time with the appropriate topics. Especially smaller companies and service providers in the B2B business often focus on this area when using a CRM system.

After all, personal contact is most important for small and medium-sized companies in order to stand out from the competition. This leads to higher customer satisfaction and a stable customer relationship and thus has a direct influence on long-term sales. This is also often the area where there is the greatest need for action, and this is also the area where the quickest and easiest way to change something is to use a CRM system.

Collaborative CRM

This area refers to the use of CRM systems for the collaboration of employees, partners, suppliers, and customers. Through the meaningful integration of different technologies, all participants can interact more smoothly with each other. Put simply, the collaborative use of a CRM system allows users to work together on projects or data sets, for example, even if they are not in the same place.

In this way, a CRM system facilitates the day-to-day work of, particularly large sales teams. The entire internal communication between sales management and sales team can be mapped. Many internal emails are no longer necessary. Reports are directly available online. All team members have the same level of information in real-time. 

Analytical CRM

In the analytically oriented use of CRM systems, key figures from a wide range of areas are increasingly being collected, analyzed and made available for customer purposes. These include, for example, information from sales and marketing, from the areas of social media, business intelligence, and, more recently, data collected using artificial intelligence (AI). 

Due to increasingly powerful analysis tools, analytical CRM is also becoming more and more attractive for smaller companies. Many CRM systems already come with ready-made reports and flexible dashboard tools, so that teams and individual employees can find all the necessary data in their daily business with just a few simple steps and can also carry out their own ad hoc analyses in the CRM system, for example, to gain new insights about customers and sales opportunities.

Why do you need CRM and a CRM system?

Customer Relationship Management stands for the targeted and holistic design of customer relationships. With CRM, all processes that affect the customer are systematically designed for optimal customer experience. CRM is an important component of relationship marketing, which is becoming increasingly important, especially in B2B sales. With CRM, a company aims to create customer relationships that are as long-term as possible, to inspire and retain customers. CRM is strongly process-driven management of customer relationships and consequently, the CRM definition of Wikipedia Customer Relationship Management characterizes as "(...) the consistent orientation of a company towards its customers and the systematic design of customer relationship processes".

Professional CRM thus serves this purpose:

  • Establish a company-wide business strategy to systematically manage all relationships and interactions of the company with existing and future customers
  • strengthen customer loyalty
  • Increase sales and profitability
  • Reduce costs 

CRM comprises the establishment and consolidation of long-term profitable customer relationships through coordinated and customer-specific marketing, sales, and service concepts with the help of modern information and communication technologies. The CRM philosophy is basically simple and consistent: the customer always comes first.
With the increasing challenges, the importance of CRM in companies is becoming more and more important. Because in the ever more intense competition, it is crucial to maintain and secure customer relationships. Even in the digital age, it is usually cheaper to maintain an existing customer relationship than to win a new customer.

With a CRM system, you can, therefore, monitor the signals on the customer side (e.g. behavior, communication) in a customer relationship and continuously measure the value of the customer relationship, e.g. expressed as total turnover achieved over the entire duration of the customer relationship. This value is also called Customer Lifetime Value or CLV in CRM. To this end, the CRM system in sales is increasingly being linked with corresponding inbound marketing software on the marketing side to ensure a holistic customer experience from the first contact with a potential customer.

What do CRM systems achieve in practice?

With a CRM tool, sales, marketing, and customer service shape the relationship with your company's customers across all channels. The CRM software supports field sales force, internal sales force, and customer service at every stage - from the preparation of the sales transaction to the closing of the sale and throughout the entire duration of the customer relationship. A professional CRM system decisively supports companies in maintaining their customer relationships. With a CRM tool, every employee in sales, customer service, and marketing can, in principle, keep a constant overview of ongoing customer interactions, because it organizes the contacts between companies and customers.

But what actually makes a CRM system successful in practice? What is CRM software used for? Why should every company - no matter how big it is - have a suitable CRM tool? The answer lies in the daily processes of a customer relationship.

Your company and your employees generate huge amounts of data every day. Every time a sales representative picks up the phone to talk to a customer or service a prospect, they experience something new and potentially valuable. But what happens to all this information? Perhaps the information is recorded in a notepad or on a laptop. Or the employee may not write down the new information at all. In these cases, without data capture in a CRM system, important details of a customer relationship can be lost or forgotten. Meetings and telephone conversations may not be followed up, and the decision on what to focus on maybe more like a guessing game than a consistent and fact-based decision. In the worst case, the employee leaves the company.

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How to plan and implement a CRM system

Unfortunately, it is not enough to simply buy and implement CRM software. Because such a tool, unfortunately, does not yet give your company the distinction "customer-oriented". In order to achieve this, your company will probably first have to turn some things around and put some processes on a new footing.

Change Management: A CRM system is only half the work

A CRM system helps you to simplify daily contact with customers, partners, and suppliers. But only if it is also used and customer orientation is "lived" in your entire company. Admittedly, buying CRM software that is not quite inexpensive and integrating it into your own system landscape is of little help at first, to be honest. After all, customer relationship management is actually a complete corporate philosophy that requires a rethink from product to customer orientation. This starts with service, continues through sales and marketing, and ends with the CEO, who must make it clear to his employees that customer-oriented action is now the be-all and end-all of everyday work.

It is therefore essential that a CRM project is supported by management and carried "from top to bottom". It is the management's task to convey to employees through training and workshops how important it is to work on a functioning CRM project, to get involved, and ultimately to use the system to its full potential. If every employee is still only "cooking his own little soup", even the best idea is doomed to failure. That's why it is important to involve everyone involved in the project from the very beginning. This shift from a product orientation to customer orientation must be successful when introducing a CRM system. Otherwise, every project is doomed to failure from the outset.

The most common mistakes when implementing a CRM system

Time and again, we hear that CRM projects fail or are only insufficiently used. There are many reasons for this. But they are easy to avoid if you know where the pitfalls lie:

  • CRM is seen purely as an IT project: The CRM software alone does not help your company's lived customer orientation. It can only support your customer-centric business philosophy.
  • There is a lack of a customer-centric view: If you don't anchor the topic of customer orientation across all departments in the company, even the best CRM system is of no use to you. The customer should always be the focus of your entrepreneurial thinking and acting. All employees in customer contact should pull together here.
  • Insufficient support from top management: If the executive floor does not support a CRM project, it is doomed to failure from the outset. Because not only the purchase of the CRM system is connected with money. The philosophy behind it, the training of the employees, and the possible new orientation of the company philosophy also cost time and nerves.
  • Change management is neglected: Many people do not realize that in order to focus on the customer, some processes, procedures, and actions in the company often have to change. This is a lengthy and also strenuous process, which often first has to be anchored in the minds of the employees.
  • Business processes have not been redesigned: In order to develop the full potential of a CRM system, some procedures and processes have to run differently than before. Many things can be done faster and more efficiently with the help of software. Nevertheless, the use of a CRM tool is often a break with the previous way of working.
  • Underestimating the difficulties of data integration and data mining: To get a CRM system up and running, your data must first be properly prepared and then migrated. This is easier said than done. Even when the data is available, there is often a lack of knowledge to analyze it meaningfully and draw the right conclusions. If necessary, get external support in-house, such as the experts from Thought Leader Systems.

What CRM systems are there?

Whether you choose a cloud solution or an in-house or on-premise solution is generally not crucial for success at first. Because you don't go to a vendor and ask for a cloud solution, you go for the solution that best fits your needs. Nevertheless, it is also a question of principle.

For example, OnPremise solutions are currently only being developed for special areas or for older programming environments or systems. The integration is often more difficult here and also adaptations in the respective program language can be a challenge. But of course, powerful solutions can also be found here. You only have to clearly evaluate whether you have the agility to handle up to four new product releases per year with your own IT. You may also encounter difficulties with in-house solutions when integrating with other, existing software solutions in the company. This requires translation software that links the systems together. In any case, the advantages of such on-premise solutions are the costs: in general, the core investment in an in-house solution is cheaper than a cloud solution in a five to seven-year view.

A cloud solution saves your resources - at least in the short term - because it does not require your own IT capacities to support the system. Here, you should pay particular attention to ensuring that the legal data protection regulations are observed. With a cloud solution, it is also urgently necessary that data entered offline can be stored temporarily. However, the greatest challenge with such systems is the so-called multi-cloud combinations, i.e. solutions with different hosting: combining different manufacturers with each other requires a considerable technological and data protection effort. It is essential to clarify such important details in advance, otherwise, the overall costs and performance situation could be significantly affected.

CRM systems: The ten largest software providers

The market for CRM systems is growing continuously. At present, you have an estimated 600 serious solutions to choose from - and the trend is rising. Whoever has the choice is therefore also spoilt for choice. Here you will find a small overview of the most important players in the market:

  • Salesforce CRM: In the first place for years is the CRM specialist The American customer management specialist helps companies of all sizes to accelerate their sales, automate tasks, and make intelligent decisions. Salesforce CRM includes lead and contact management, opportunity management, workflow rules and automation, customizable reports and dashboards, and mobile applications.
  • Microsoft Dynamics CRM: Catching up on CRM is also a challenge between software giant Microsoft. Microsoft Dynamics is a software with which tasks from sales, marketing, and service can be carried out. The platform has a wide range of functions and can be used to improve accessibility and collaboration and to automate processes within a company. Dynamics CRM can be integrated with other products, such as Office 365, and can be implemented in the cloud, on-premise, or in a hybrid way.
  • SAP Sales Cloud: SAP Cloud for Sales is a cloud-based suite of sales-oriented applications from SAP. It enables companies to integrate with systems such as SAP ERP and SAP CRM. The offering includes a suite of systems that are designed to manage customer-centric processes such as marketing, sales, and customer service. These systems are represented by individual cloud solutions and serve to optimize various customer needs within the customer lifecycle.
  • Sugar CRM: SugarCRM began as an open-source program. However, the company decided some time ago to stop further development of the open-source version. SugarCRM no longer makes the source code of newer versions available to the public. The company is now fully dedicated to the hosted version, for which customers pay monthly subscription fees. SugarCRM is suitable not only for acquisition but also for service, support, and marketing. The basis for this is a high degree of adaptability of the software, which, however, also means that increased administrative effort is required for the initial setup and maintenance of SugarCRM.
  • HubSpot CRM: The free CRM system is the core component of enterprise software, which also includes three paid versions, each with a specific specialization. One of the great advantages of this software is the high level of integration of these versions, which present themselves together under one interface and access the same data records. The three "hub" versions are thus more likely to be additional packages for CRM than stand-alone programs. HubSpot wants to be a complete solution in its field, making additional software unnecessary. As a cloud app, HubSpot is not installed locally but runs on a server of the provider. The user uses the software in the browser.

In addition to these "top dogs in the CRM market, there are also smaller providers that now have a large fan community among CRM users and enjoy great popularity:

  • Highrise CRM: With this solution, you can manage your customers and contacts. It is perfect for small businesses, nonprofit organizations, and freelancers, and provides you with a central database where you can store all information about your customers as well as your notes and emails. It can also track your deals and offers. It also allows you to share status updates on a project or deal with your sales team or the entire company.

  • Zoho CRM: The browser-based cloud solution with mobile apps helps companies access data flexibly at any time. Zoho CRM primarily combines sales communication with online marketing and integrates social CRM directly into social media. For example, a visitor display helps to improve your presence and present products. Service and support can also be managed through tasks and activities.

  • Pipedrive: Pipedrive is a web-based CRM solution that enables companies to plan their sales activities and monitor business. Developed using an activity-based sales methodology, Pipedrive streamlines every action that transforms a potential business into a successful sale.

  • ActiveCampaign: ActiveCampaign provides relevant tools for communication and customer relations: E-mail marketing, marketing automation, sales CRM, and messaging.

  • Bitrix 24 CRM: With Bitrix24 CRM you have a database with information about your customers and contacts that maps your entire communication with customers and the complete customer history. Events or activities, be it calls, messages, or appointments, are logged so that you can plan your further actions, including tasks integrated into the CRM.

CRM solutions from smaller providers - even those not mentioned here - usually do not come off worse in terms of performance and quality than those of the big ones. The only art is to find the right provider for you in the software jungle. In any case, it is important that the chemistry is right and that the solution is neither completely overdone nor too small for your requirements and can be expanded with additional functionalities in the future. Full-service providers such as Thought Leader Systems will be happy to support you in selecting the right CRM system for your individual requirements.

How to set up a solid CRM strategy

When you're ready to implement a CRM system, you can't just buy the next best software. You need to think about several factors that are critical to the success of your CRM project:

  • Define idea: Before you get started, you should first consider what direction you want to take with your new CRM strategy: For example, do you want to improve the relationship and communication with your customers? Do you want to optimize collaboration with customers, employees, partners, or suppliers? Or do you want to make analyses about the behavior of your customers in order to better understand them? Should it perhaps even be a combination of all of these? Feel free to ask your employees where there is a need for optimization in their daily work and record everything. This will help you to better estimate the effort involved.
  • Determine the budget: Determine an approximate budget that you can spend on your CRM project, and it's best to plan for sufficient buffers. Remember the more complex your project, the higher this sum should be.
  • Set the goal: Then it's time to get down to business. Now fill your ideas with concrete life. This is best done with a so-called "specification sheet". Creating a requirement specification is an important milestone on the way to a successful CRM project. Here, concrete requirements are described which the future software should absolutely fulfill. In this way, you not only define your goals but also make your own work easier. Because the requirements specification is virtually a complete catalog of requirements that describes your individual wishes for a CRM solution as precisely and comprehensively as possible. When selecting a suitable CRM provider, it serves to compare your requirements with the solution approaches of the software providers. It can also serve as a basis for further orientation in the project during the project phase. If you have problems with this, feel free to call in an external service provider such as Thought Leader Systems, who will help you put your requirements on paper. This investment is worthwhile and can avoid subsequent errors.
  • Choosing a provider: Service providers such as Thought Leader Systems will also be happy to help you choose the right software. Unfortunately, the following applies here: Whoever has the choice is spoilt for choice. Providers of CRM tools are now a dime a dozen. If you don't have a competent advisor at your side, there is unfortunately only one thing that helps: Search for one yourself. For example, relevant forums will help you. Also, various market overviews usually depict the industry focus of the individual providers and the most important functionalities of the individual CRM systems. Of course, the Google search will also help you. Your industry may be very specific. Therefore it makes sense to search for a CRM provider who has already worked with similar companies and industries.

You should also consider the vendor's local partner network, which can provide on-site support during and after the implementation of the CRM software and may offer additional services such as education or training. After all, a CRM tool is fairly useless if your employees aren't trained in how to use its features and how useful it is. Thorough training is one of the important factors for a good acceptance of the CRM system. After all, it should not only show the users how the system works but also how everything is connected and how a user can contribute to the general organizational process. In fact, training helps a company to work together towards a specific goal.

How data integration into the CRM system works

Once you have decided on a provider and thus also on a CRM system, there comes a time when your data must be merged, possibly supplemented with additional data and made available across the company. This is first of all a relatively large conceptual effort. It is important to be aware of what you want to do with this data in the end, how which information has to be transferred and in what form it is needed: A distinction must be made here between two main types of data: On the one hand, there is master data, that is, basic information about customers, articles, vendors, and so on. On the other hand, there is transaction data, which provides information about calls, complaints, orders, sales or payment behavior etc.

After that, the question arises as to how the data should be retrievable later: In real time? Is it enough to compare data once a day or several times a week? Can the information still be stored in a data warehouse or do more complex methods need to be used? Data warehouses do indeed offer the possibility of regularly archiving and retrieving company-specific, historical, and therefore unchangeable data. But our fast-moving times require equally fast reactions: Data warehouses will probably be replaced more and more by real-time data platforms in the future. This means that companies will then no longer be dependent on materialized data, but will be able to collect this data directly from the sources at the time of the query.

Who will advise you on your CRM system?

When you need help with your CRM solution-whether it's implementation or expansion-you need to look for specialists. Here you have the option of employing experts in-house or looking for external service providers.

If you decide on the in-house version, you will have to look for one or preferably several specialists who are familiar with the topics of corporate strategy, change management, and software. However, these "egg-laying woolens" are hard to find. A one-man show is often hard enough to get a CRM project up and running as quickly as possible.

External service providers offer another option. They can help you define your goals, choose the software, integrate data, host, and all the other "stumbling blocks" that inevitably arise in complex CRM projects. For the individual tasks, individual experts can be called in or so-called full-service providers who provide consulting, integration, and hosting from a single source, such as Thought Leader Systems.

If you decide on the external variant, you are guaranteed a high level of service quality and availability. This can hardly be achieved by a single employee in your own company. In addition, resources for individual projects can be scaled directly if required. External service providers also ensure continuous availability and operability - without the risk of vacation or illness.

Another advantage of service providers: You can select them directly according to your requirements. After all, the requirements for a CRM system and its implementation vary depending on the industry. The manufacturing industry, for example, requires functions for product and quotation configuration and service processing, while the consumer goods industry requires point-of-sale management with visit and tour planning. We recommend a partner with reference projects in the respective industries.

How and when does Thought Leader Systems help you with your CRM system?

The introduction of a CRM system and thus a CRM philosophy at the same time is not an easy task and does not happen overnight. If you don't have any experience with the subject, you can't avoid getting help in-house - preferably from an experienced full-service provider with years of expertise in CRM projects, such as Thought Leader Systems.

Who is Thought Leader Systems?

We at Thought Leader Systems have our roots in both medium-sized companies and internationally operating corporations and can look back over several decades in leading positions in the free economy. Our business model consists of strategy development, innovation, psychology, IT, marketing, sales, content management, and public relations. Our team consists of technology specialists with advertising psychologists and communication experts. We all help you with your individual customer management to achieve a unique position in the market - also internationally.

How does Thought Leader Systems help with CRM-systems?

Both the development of a CRM strategy and the selection and use of CRM software requires a great deal of experience. As a full-service provider, Thought Leader Systems is at your side with advice and practical support for CRM. If desired, we can help you develop a CRM strategy and put it into practice - from the development of a CRM vision to the selection of a suitable CRM tool, to integration, hosting, and training of your employees. If desired, we can offer you everything from a single source or individual partial services - depending on your individual needs:

  • Development of a CRM strategy
  • Consulting for the selection of a CRM system
  • Creation of a specification sheet
  • Lead management and creation of Buyer Personas
  • Data migration and data integration
  • Seamless integration of your CRM-tools into your IT landscape
  • Change management
  • Training your employees
  • Hosting

We are partners of the leading providers of CRM systems such as Salesforce, Microsoft, HubSpot, or SAP. Here we select together with you the best option for you and adapt the CRM system individually to your wishes and needs.

But our service does not stop there. Because we do not regard Customer Relationship Management as the mere introduction of software. Rather, Thought Leader Systems advises and helps you comprehensively with the individual development or expansion of your CRM philosophy, which is seamlessly embedded in sales, marketing, and service. Because we want your big ideas to prevail, ideas that make other people's lives better.

In doing so, we support your company with all the means at our disposal - whether with brains, strategy, consulting, or software. Develop your impact and be recognized and appreciated by us as a thought leader in the market.

So contact us with regard to CRM systems if :

  • you want to take your customer management to a new level and you don't know how to
  • your new requirements exceed your existing CRM solution and you are looking for new possibilities
  • you don't want to constantly fight for the position in the market with your customers, but striving for permanent differentiation and a unique position as a thought leader in the market.
  • you don't want to call in too many external experts but you want a full service from one source