Customer relationship management, or CRM, refers to the processes and systems used to track interaction between a customer and a company and capitalize on the relationship built through those interactions. Common examples of CRM include customer loyalty cards that track and award points for transactions and software designed to target advertisements and discounts for customers based on previous interactions.
The main goal of CRM is to increase the profitability of working with customers by developing their satisfaction, loyalty and desire to sway others toward the brand. This includes cohesive plans to help customers get discounts on the goods and services they are most likely to use and maintain cordial relationships that revolve around directly addressing and even anticipating customer needs. These elements help drive advocacy, or the customers' willingness to speak positively about the company, which in turn provides word-of-mouth advertising that further drives sales and brings new customers into the system.
Software developed for CRM helps manage essential information, including customer contact information, any relevant personal details, preferences mentioned in previous interactions, and other data that can help the business build a relationship with each customer. These tools are often shared between departments in a company. Sales, marketing and customer service departments may all have access to CRM information on existing clients.