Customer management is synonymous with customer relationship management (CRM), though the latter is more commonly used.
Similarly, CRM and customer service are commonly used business terms. But they aren’t interchangeable. The goal of CRM is to nurture strong, productive, loyal customer relationships, while customer service focuses more narrowly on resolving inquiries and helping customers get the most value out of the products and services they buy. However, by optimizing interactions customers have with your company, both processes contribute to a stronger customer experience (CX).
In this post, we’ll further define customer relationship management and customer service, identify some of their major similarities and differences, and share how CRM can improve your overall customer experience.
What is customer relationship management?
Customer relationship management—or customer management—is an overarching concept, referring to how a business approaches its interactions with potential and existing customers. It goes beyond contact records and sales automation, focusing on building authentic relationships.
A customer relationship management system—also called a CRM system or a CRM—is a software solution designed to facilitate that approach. So, beyond streamlining sales, the overarching customer relationship management definition encompasses any activities that help you establish strong customer relationships, build customer loyalty, and ultimately increase sales and profits.
Marketing, sales, and customer service teams use the data within CRM systems to
- Create a complete understanding of the customer and their buying habits.
- Deliver personalized engagements that help build lasting connections with customers.
- Improve the overall customer experience and increase customer lifetime value.
CRM systems help achieve these goals by gathering, linking, and analyzing all collected customer data—contact information, interactions with company representatives, purchases, service requests, assets, and quotes. The system then lets users access that data and understand what happened at each touchpoint—a complete customer profile that can help nurture a solid customer relationship.
In addition to the benefits it brings for customers, CRM data can also be used to inform incentive compensation, sales forecasting, territory segmentation, campaign design, product innovation, and other activities. This is one of the many reasons why a data-driven customer relationship management strategy is critical to optimize sales, marketing, and service.
What is customer service?
Customer service refers to the assistance an organization offers to its customers before or after they buy products or services.
This customer service definition includes offering product suggestions, troubleshooting issues and complaints, or responding to general questions. Beyond conversion and sales, customer service focuses on strengthening the experience a customer has with your product.
Each customer service interaction is an opportunity to grow your business. Great customer service is a competitive differentiator that drives brand loyalty and recognition. To provide great customer support, it’s necessary to move beyond just addressing problems. You need to anticipate problems and show your customers solutions before they think to ask. This is where your CRM strategy comes into play.
What’s the role of CRM in business strategy?
Now that we have a better understanding of each concept, let’s look at the role a CRM system plays in helping you execute customer relationship management and customer service strategies more efficiently.
Provide a great customer experience
To break through the noise and deliver outstanding customer service experiences, your CRM needs to help you go above and beyond customer expectations.
- Seamlessly connect all service touchpoints throughout the customer journey.
- Offer customers a wide range of choices to engage with you in the way they want—anywhere and anytime.
- Give the one, correct answer through best-of-breed knowledge management or automated, personalized advice.
Build and maintain strong relationships
CRM software helps you access and use data to understand your customers, so you can keep pace with rising customer demands and build relationships that last.
- Centralize information for improved access to customer data.
- Create and manage multiple sales pipelines for quickly converting new prospects.
- Leverage AI and machine learning to help service teams rapidly complete repetitive tasks.
Deliver frictionless customer service
Give your customers more reasons to stay with you by using a CRM solution to offer premium customer service.
- Provide accurate, timely service to customers through their preferred channels.
- Predict, improve, and augment the service experience using automation and intelligence.
- Access past engagement data to provide the most relevant service.
- Identify opportunities to provide proactive service, addressing issues before they arise.
With effective customer relationship management and best-in-class customer service, you can provide experiences that grow your business—and your bottom line.
Make CRM a central part of your business strategy
Want to learn more about the importance of CRM software? Explore our Oracle Advertising and CX suite.