How Does a CRM Work?

For businesses to succeed, they need to maintain a good relationship with their customers. This means collecting, managing, and analysing the right information without consuming too much time.

That’s where customer relationship management software (CRM) comes in handy, but how does a CRM work exactly?

A successful CRM application can automate repetitive tasks that took employees a long time in the past. It utilises technologies to help manage customer relationships, from collecting data to integrating with other company systems.

In today’s article, we’ll go through the typical workflow of a CRM and why it’s such an essential software for businesses.

How Does a CRM Work?


In simple words, a CRM helps better understand and manage the business’s relationships with potential customers, leads, and existing customers. As a result, it enables you to provide the best customer experience possible and grow your business more efficiently.

Primarily, a CRM isn’t just a virtual filing cabinet. The work of a CRM software involves a combination of technologies and strategies to manage customer relationships. Here’s how the process goes:

1. Acquiring and Recording Leads

The first step involves collecting information about potential customers who’ve shown interest in your products or services. This includes data collection and real-time updates using various sources, such as online platforms, social media interactions, and contact forms.

All these data get stored in a centralised database within the CRM system. This database provides a unified location for all the lead-related information.

2. Notifying Marketing Teams To Interact With Leads

Once the CRM system acquires leads, it notifies the relevant marketing executives responsible and equips sales reps with valuable information. This notification acts as an alert to remind them to initiate personalised contact with the lead as per schedule.

The CRM system facilitates direct interaction with leads via integrating with other systems. For example, it can send targeted emails or initiate phone calls via Computer Telephony Integration (CTI) links.

3. Keeping Records and Managing Customer Documents

The CRM system performs a comprehensive record-keeping process for every interaction. This includes recording and storing all documents, calls, or messages within its database.

Such a process ensures no piece of information goes missing. It also helps retrieve the history of interactions with customers as valuable insights for future engagements.

So, you can think of a CRM as a centralised storehouse for customer documents. Whether internally or through a link to external resources, it ensures all essential documents are easily accessible to all team members.

4. Lead Scoring and Finding a Suitable Sales Team for Each Prospect

Lead scoring involves evaluating and categorising leads based on their potential value throughout the customer lifecycle.

Such customer segmentation helps put leads in order and guide them through the sales pipeline. As a result, it ensures sales teams focus on the leads that have higher conversion potential.

Once the CRM system scores all the leads, it allocates the most suitable sales teams or personnel to handle them. Such a technique considers factors like geographical location, product expertise, or previous success with similar leads.

Not only that, but the CRM system also sends reminders to sales executives about scheduled interactions with prospects. Consequently, it ensures that follow-ups and engagements occur at the right time, maximising the chances of conversion and optimising the sales process.

5. Confirming and Processing Orders

After a successful engagement, the CRM system moves the qualified leads through the sales pipeline. As such, it automates the generation of invoices, facilitating efficient order processing and sales management processes. Plus, it helps with scheduling shipments.

Furthermore, the role of the CRM system extends to sending order status alerts. It can do that through utilising communication channels such as SMS, emails, and telephone calls. Doing so ensures continuous and transparent communication throughout the entire process.

6. Handling the Post-Sales and Follow-Up Phase

In the post-sales phase, the CRM system logs service requests, prioritising customer satisfaction. It offers a comprehensive customer overview for the executive handling the request, including past interactions, purchases, and other service requests.

After the initial sale of service interaction, the CRM system monitors any follow-up action that needs attention. Then, it passes on relevant information to the customer service teams for proactive customer engagement.

How CRM Integrates With Other Systems

Systems integration

CRM systems can integrate with other systems, enabling them to collaborate with different tools, platforms, and databases. Besides the previously mentioned integration with sales, marketing departments, and customer support systems, CRM is useful for many other tasks.

1. Telephone System Integration

As previously mentioned, CTI allows for a seamless connection between CRM and the telephone system. Such an integration enables functionalities such as click-to-call, call logging, and call analytics directly from the CRM interface.

For instance, the CRM can capture and store call details, including duration, timestamps, and outcomes, providing a comprehensive record of communication with customers. Such a feature facilitates seamless contact management.

2. Email Clients Integration

Integrating CRM tools with the emailing system facilitates easy communication, ensuring customer interactions are recorded and accessible. It allows for tracking email interactions within the CRM interface, including sent emails, received emails, and their associated details.

Furthermore, the CRM system synchronises contacts between the CRM and email clients to ensure consistency and avoid duplication of information.

3. Document Editing Integration

Integrating the CRM system with document editors allows for storing and accessing documents directly within the CRM. This ensures that all relevant files are readily available during customer interactions.

4. Integration With Other Systems

The CRM system can be linked to many other platforms and systems to further enhance your business’s performance. This includes e-commerce platforms to help track customer purchases, enabling businesses to adjust their strategies depending on actual buying behaviour.

Not just that, but CRM can also integrate with financial systems to ensure accurate billing and invoicing. So, it’s like connective tissue within organisations, making collaboration between departments easier.

A Final Thought

No doubt that Customer Relationship Management (CRM) is a valuable tool that helps businesses manage their relationships with their customers. It automates various repetitive tasks that would otherwise consume a lot of time.

So, how does a CRM work exactly?

From the initial step of acquiring and recording leads to notifying marketing teams, keeping records, and lead scoring, CRM streamlines business processes for a more personalised experience.

Overall, a CRM isn’t just a software. It’s a strategic approach that empowers businesses to build lasting relationships with customers and promote continuous improvement.