What Is CRM? A Complete A–Z Guide to Customer Relationship Management Software

What is CRM? This is a common question many businesses ask when they want to improve sales performance and enhance customer relationships. In this article, GMO-Z.com RUNSYSTEM provides a complete A–Z explanation of CRM, helping businesses clearly understand what CRM is, its benefits, and why CRM software has become an essential tool for modern organizations.

1. Overview of Customer Relationship Management (CRM) Software

Below is an overview that helps businesses understand what a CRM system is, its role, and the key benefits of customer relationship management software.

1.1. What Is a CRM System? Who Is CRM Software For?

A CRM system (Customer Relationship Management system) is a customer relationship management platform that helps businesses connect with, track, and engage customers throughout the entire customer journey — from first contact and nurturing to closing deals and repeat purchases.

A CRM system centralizes all customer data into a single platform, enabling seamless sales management, customer service, and marketing execution in a synchronized and efficient way.

CRM software is designed for all departments involved in managing and interacting with customers, including sales teams, marketing teams, customer support, and company leadership.

Primary Users of a CRM System

• Sales teams: Manage customer information, track deals and pipelines, plan sales activities, and generate sales performance reports.
• Marketing teams: Build and execute campaigns, analyze customer behavior, segment audiences, and measure marketing and advertising performance.
• Customer support teams: Log customer requests, handle complaints, track service quality, and manage ongoing customer interactions.

Other CRM Users

• Managers and executives: Monitor overall business performance, access consolidated reports, and make data-driven strategic decisions. 

• Business development and recruitment teams: Store potential customer or candidate data, track opportunities, and manage all interactions in one CRM system.

  A CRM system is suitable for any business that wants to optimize customer relationships. It is especially valuable for companies that are scaling operations or managing customers across multiple communication channels.

1.2. The Evolution and History of CRM

The CRM system has evolved for more than 30 years, transitioning from manual customer management to cloud-based and Social CRM solutions. Below are the key milestones in the development of Customer Relationship Management (CRM):

• 1992: The concept of Sales Force Automation (SFA) emerged, helping businesses automate basic sales processes and manage leads more efficiently.
• 1993: Siebel Systems developed one of the first CRM software programs, integrating sales and marketing functions into a single platform.
• 1995: The term CRM (Customer Relationship Management) was officially introduced and quickly became an international standard.

• 1999:

  Mobile CRM solutions appeared, such as Siebel Sales Handheld, allowing sales teams to access customer data on mobile devices.

  Salesforce launched the Cloud CRM (SaaS CRM software) model, making CRM systems more accessible to small and medium-sized businesses.

• 2003-2004:

  Microsoft released Microsoft Dynamics CRM after acquiring Navision, strengthening enterprise CRM capabilities.

  Open-source CRM solutions such as SugarCRM emerged, enabling businesses to develop customized CRM platforms.

• 2006: Cloud computing gained widespread adoption with Amazon EC2 and S3, allowing companies to deploy CRM systems more flexibly and cost-effectively.
• 2008: Social CRM was introduced, integrating social media channels to enhance customer engagement and interaction.
• 2009: Mainstream CRM platforms matured, and Gartner conferences began shaping the future direction of CRM technologies.
• 2013-2014: CRM systems integrated advanced data analytics and call center connectivity, significantly improving sales performance and customer service efficiency.
• 2016: CRM became a core business system, with industry-specific CRM applications developed for different sectors.
• 2019 đến nay: CRM solutions continue to evolve with seamless omnichannel engagement. SaaS Cloud CRM systems dominate the market, accounting for over 80% of customer relationship management applications worldwide.

1.3. CRM and ERP: What Is the Difference?

CRM (Customer Relationship Management) is customer relationship management software designed to help businesses build, manage, and maintain strong, long-term customer relationships. A CRM system centralizes customer data, optimizes sales processes, enhances customer service, and automates marketing activities to drive lead generation and revenue growth.

ERP (Enterprise Resource Planning) is enterprise resource planning software that automates and manages internal business operations and resources. An ERP system creates a unified data environment across departments, covering sales management, manufacturing, human resources, finance, inventory, logistics, and project management.

2. Why Should Businesses Use CRM Software?

Below are the key reasons why CRM software has become an essential tool for improving sales performance, marketing effectiveness, and customer service quality.

2.1. CRM Helps Organize and Store Customer Data Systematically

Customer information is one of a company’s most valuable assets. A CRM system provides a unified, 360-degree view of customers through intuitive, customizable dashboards. Businesses can easily track purchase history, order status, service issues, and other critical customer data in one centralized platform.

Studies show that 70% of customers expect sales representatives to understand their purchase history. By maintaining a single source of truth, CRM software enables consistent, high-quality customer experiences across all touchpoints.

2.2. CRM Optimizes Business Operations and Prevents Data Loss

CRM software reduces administrative workload by automating tasks such as lead tracking, email follow-ups, note-taking, and appointment scheduling, allowing sales teams to focus on revenue generation. Most modern CRM systems offer anytime, anywhere access via desktop or mobile devices, providing flexibility and real-time visibility.

By storing all customer data in one CRM platform, businesses minimize the risk of data loss, miscommunication, and missed sales opportunities.

2.3. CRM Increases Customer Satisfaction and Drives Sales Growth

CRM automates customer engagement activities such as call center responses, SMS notifications, and personalized email campaigns tailored to specific customer segments. All inquiries, feedback, and service requests are logged within the CRM system, improving service quality and response time.

This structured approach also enables effective cross-selling and up-selling strategies, leveraging loyal customers who typically spend up to 33% more than new customers.

2.4. CRM Connects Departments Across the Organization

A customer relationship management (CRM) system consolidates purchase and interaction data, helping teams better understand customer behavior, needs, and expectations. CRM bridges sales, marketing, and customer service, improving collaboration and information sharing.

As a result, businesses can identify product gaps, refine marketing campaigns, and deliver personalized offers based on real customer data rather than assumptions.

2.5. CRM Boosts Productivity and Revenue with AI Technology

When integrated with AI, CRM software enables deeper personalization, accurate sales forecasting, and automation of tasks such as email drafting, marketing messages, and product descriptions. AI-powered CRM systems help businesses unlock the full value of customer data, reduce operational costs, and improve cross-department efficiency leading to higher overall performance.

3. How Does CRM Automate Business Operations? Practical Examples

Below are real-world examples of how CRM systems automate business processes, save time, and improve efficiency across different functions.

3.1. CRM in Sales Operations

Here’s how CRM software helps sales teams manage leads, sales opportunities, and customer interactions more effectively.

• Deeper customer insights and personalized engagement: CRM provides a comprehensive customer profile, including behavior history, product or service interactions, and engagement levels. Sales representatives can use this data to personalize calls, emails, or event invitations, significantly improving conversion rates.
• Instant access to customer information: When integrated with VoIP systems, customer information appears instantly on screen during inbound calls. This allows sales teams to respond faster, handle inquiries more professionally, and manage workflows efficiently.
• Lead scoring and prioritization: CRM automatically scores leads and prioritizes those with the highest potential. The system can also flag existing customers whose contracts are nearing expiration or who may be interested in new products, ensuring timely follow-ups and higher close rates.
• Optimized customer journey management: By automating customer tracking, CRM eliminates manual note-taking and fragmented email management. This creates a consistent, well-structured customer journey that converts prospects into paying customers while improving overall sales performance.

3.2. CRM in Marketing Activities

Below are examples of how CRM helps marketing teams analyze data, personalize campaigns, and optimize marketing outcomes.

• Deeper customer understanding through data: CRM aggregates customer data across channels, enabling marketers to identify behavior patterns, key touchpoints, and the most valuable customer segments. This insight helps optimize advertising budgets, reduce waste, predict purchase timing, and design compelling product bundles.

• Segmentation and personalized experiences: CRM ensures the right message reaches the right audience at the right time, boosting engagement and conversion rates. For example, customers who were inactive but opened a promotional email can be tagged as “re-engaged” and receive follow-up messages tailored to their renewed interest.

  Personalization significantly increases sales potential. According to McKinsey, 76% of consumers are more likely to purchase from brands that personalize, and 78% are more likely to buy again.

• Optimization through testing: CRM supports A/B testing for campaigns, including promotions, messaging, content formats, and contact frequency. Data-driven insights from these tests help marketers identify the most effective strategies, maximizing ROI instead of relying on intuition or guesswork.

4. Types of CRM Systems

Below are the most common ways to classify CRM systems, based on different criteria. Understanding these categories helps businesses choose the right CRM solution that fits their size, industry, and operational needs.

4.1. CRM Systems by Technology Platform

CRM systems can be categorized by underlying technology platform: on-premises, cloud-based, open-source, or integrated.

• On-Premises CRM: An on-premises CRM system is installed and operated directly on a company’s internal servers. This type of CRM software gives businesses full control over their data and system infrastructure, ensuring a high level of security, stability, and customization.

  However, on-premises CRM systems typically require significant IT resources for deployment, maintenance, and upgrades.

• Cloud CRM (SaaS CRM Software): Cloud CRM, also known as SaaS CRM software, stores data on the service provider’s servers and is accessed via the internet. This CRM platform is quick to deploy, easy to use, and highly scalable.

  Cloud-based CRM systems are ideal for businesses with limited IT resources, as they offer flexible subscription-based pricing (monthly or annual) and automatic updates.

• Open-Source CRM: Open-source CRM software provides access to the source code, enabling businesses to customize features to their specific requirements. This type of CRM system is suitable for organizations with an in-house IT team capable of installation, configuration, and ongoing system management.
• Social CRM: Social CRM integrates social media platforms into the customer relationship management (CRM) system, enabling businesses to track customer interactions and feedback across channels such as Facebook, Instagram, Zalo, and other social networks—beyond traditional sales management.
• Mobile CRM: Mobile CRM applications are designed for smartphones and tablets, allowing sales and marketing teams to manage opportunities, track customer interactions, and complete tasks anytime, anywhere. This type of CRM tool is especially valuable for field sales teams and remote work environments.

4.2. CRM Systems by Business Model

CRM systems can also be tailored based on business type, such as B2B, B2C, SMEs, or large enterprises.

• B2B CRM: B2B CRM systems are designed for businesses that sell products or services to other businesses (Business-to-Business). These CRM platforms focus on long sales cycles, account-based management, deal tracking, and relationship building with multiple stakeholders.
• B2C CRM: B2C CRM systems support businesses that sell directly to individual consumers (Business-to-Consumer). These CRM solutions prioritize customer segmentation, marketing automation, omnichannel engagement, and personalized customer experiences at scale.

Each type of CRM system comes with different strengths and limitations in terms of security, functionality, and integration capabilities. Businesses should select a CRM based on company size, industry, and real operational needs to maximize effectiveness.

5. How a CRM System Works: The CRM Process Explained

Below is an overview of the CRM process, from lead generation to customer care, analysis, and loyalty building illustrating how CRM systems work in practice.

Step 1: Sales Consulting (CRM Sales)

This is the first stage of the CRM workflow, where sales teams identify and engage potential customers who have a demand for the company’s products or services.

Key activities include sending emails, telesales outreach, quoting, contract signing, transaction processing, and accounts receivable reporting.

• Role of the Sales Team: Sales representatives are responsible for identifying business opportunities (opportunities/deals), managing leads, contacting prospects, and driving deals toward successful closure.

• Role of the Account Manager: Once a contract is signed, the Account Manager takes ownership of customer management and execution. Their responsibilities include consulting clients, managing delivery plans, collecting payments, and handling outstanding balances.

  Account Managers typically manage a moderate number of clients, focusing on long-term relationships and identifying new business opportunities within existing accounts.

Step 2: Marketing Communication 

A CRM system enables businesses to collect comprehensive customer data, including demographics, purchasing behavior, preferences, and interests. This data is used to segment customers, identify needs, and develop effective marketing and communication strategies.

CRM software ensures that customer information remains accurate and up to date, reducing unnecessary outreach and optimizing customer engagement processes. As a result, marketing teams can improve creativity and analytical performance, while sales teams can easily track interactions, update data, and adapt sales approaches for each customer.

Step 3: After-Sales Service (CRM Services)

The goal of CRM Services is to increase customer satisfaction, strengthen loyalty, and drive additional revenue. Key activities include:

• Technical support: Answering questions, resolving issues, and guiding customers on product or service usage.
• Customer care: Handling complaints, feedback, and providing after-sales support.
• Remarketing: Sending promotions, special offers, and information about new products or services.
• Revenue growth: Upselling, cross-selling, and customer referrals.

Effective CRM service management helps build long-term customer relationships. When customers are satisfied with post-sales support, they are more likely to continue using the product or service and recommend the business to others.

Step 4: Customer Data Analysis (CRM Analysis)

CRM Analysis involves evaluating customer data to gain insights into behavior, needs, and priorities. The objective is to generate actionable insights that support CRM strategy optimization and enhance the overall customer experience.

Step 5: Customer Loyalty and Retention

The ultimate goal of customer relationship management (CRM) is customer retention and loyalty. Businesses can implement loyalty programs, discounts, reward points, and exclusive offers to encourage repeat purchases and referrals.

The Two Core Stages of the CRM Process

A complete CRM system typically operates across two main stages:

• Pre-sales: Attracting and converting potential customers
• Post-sales: Relationship management, customer care, and loyalty building

To achieve optimal results, businesses must establish clear CRM processes, execute them consistently, and monitor performance regularly.

6. Common Challenges When Implementing a CRM System

Many businesses face significant challenges when implementing a CRM system, ranging from employee resistance and data integration issues to unclear objectives. As a result, CRM implementation failure rates can reach up to 50%.

Key Challenges

User resistance: Employees who are used to legacy workflows may resist adopting a new CRM software. Concerns about complex interfaces, lack of proper training, or increased workload often lead to low user adoption.

Data and system integration: Customer data is frequently scattered across departments, making it difficult to synchronize with existing ERP systems or other tools. Successful integration often requires experienced IT resources and careful system planning.

Costs and resource constraints: Hidden costs such as system upgrades, data migration, and employee training may exceed initial expectations, while tangible business benefits may not appear immediately.

Additional Challenges

Lack of cross-department collaboration: When marketing, sales, and customer service teams operate in silos, the effectiveness of the customer relationship management (CRM) system is significantly reduced.

Unclear goals and strategy: Without a clear CRM strategy and measurable objectives, businesses struggle to evaluate ROI and align CRM initiatives with business outcomes.

Solution: To implement CRM successfully, businesses should establish a detailed roadmap, invest in proper user training, and select a CRM provider that offers strong implementation and ongoing support.

7. Advanced AI Applications in Modern CRM Systems

With breakthroughs in artificial intelligence, AI-powered CRM systems are transforming how businesses manage customer relationships. AI enables process automation, deep customer data analysis, personalized experiences, behavior prediction, and enhanced engagement.

AI also helps identify new business opportunities, optimize marketing strategies, and deliver 24/7 customer support through chatbots, ultimately increasing customer satisfaction and business performance.

Key AI Use Cases in CRM

• Customer behavior prediction: AI analyzes historical and real-time data to predict customer needs, preferences, and purchasing trends, enabling more accurate business decisions and personalized services.
• Automated customer segmentation: AI automatically groups customers based on behavior, interests, and interaction patterns, helping businesses deploy targeted outreach and personalized service strategies.
• Personalized customer experience: AI recommends relevant products, services, and content for each customer, increasing satisfaction, engagement, and brand loyalty.
• Marketing campaign optimization: AI identifies trends, analyzes customer behavior, measures campaign performance, and continuously improves marketing strategies for higher ROI.
• Sales management automation: AI automatically updates customer data, forecasts buying intent, and optimizes sales workflows, allowing sales teams to work more efficiently.
• Enhanced customer service: AI chatbots and virtual assistants provide 24/7 support, answer questions instantly, and deliver accurate information, significantly improving the customer experience.
• Sentiment analysis: AI evaluates customer feedback and interactions to understand emotions and expectations, helping businesses refine products, services, and service quality.

8. GMO-Z.com RUNSYSTEM: A Smart CRM Solution for Businesses

GMO-Z.com RUNSYSTEM is a member of Japan’s GMO Internet Group, with over 20 years of experience in technology and digital transformation. The company delivers advanced solutions such as CRM, eKYC, OCR, AI chatbots, and big data analytics, serving both Vietnamese and Japanese markets.

WOWCRM – A Next-Generation CRM Platform

WOWCRM is the next-generation CRM platform developed by GMO-Z.com RUNSYSTEM. Integrated with AikoAI, WOWCRM automates sales processes, provides comprehensive customer data analysis, predicts future needs, and personalizes customer experiences.

WOWCRM can reduce manual work by up to 40%, increase productivity by 70%, and meet stringent security standards required by the banking and financial sectors.

Key Features of WOWCRM

• Intelligent AI (AikoAI): Automates data entry, follow-up scheduling, quotation generation, and next-best-action recommendations.
• 360-degree customer data management: Consolidates transaction history, interaction behavior, and predictive insights, enabling fast, data-driven decision-making.
• Enterprise-grade security: Strict access control and compliance with high-level security standards in the finance and banking industries.
• Flexible system integration: Seamlessly integrates with core banking systems, LOS, AML, and other internal platforms to streamline operations.
• Highly customizable: Customizable interfaces, workflows, and reports tailored to each organization’s specific needs.

Real-World Applications

WOWCRM has been successfully implemented at Vietnamese banks such as BAC A BANK and ABBANK, automating up to 90% of sales processes, reducing data entry time by 40%, and significantly improving customer management efficiency.

As a “Make in Vietnam” CRM solution, WOWCRM plays a key role in accelerating digital transformation and supporting sustainable growth in the financial and banking sector.

Frequently Asked Questions (FAQs)

What Is a CRM Tree?

A CRM tree is a visual model that represents the core components and functions of a customer relationship management (CRM) system. It typically includes stages such as lead management, customer relationship building, opportunity handling, and post-sales support. This model helps businesses manage customer data and processes systematically, improving operational efficiency and customer experience.

What Is a CRM Strategy?

A CRM strategy is a comprehensive plan for managing and optimizing customer relationships. Its goal is to increase customer satisfaction, loyalty, and revenue through personalized interactions and optimized sales, marketing, and customer service processes.

Building a CRM strategy involves setting objectives, analyzing customer data, defining the customer journey, implementing CRM tools, and continuously monitoring and optimizing performance.

What Does CRM Stand For?

CRM stands for Customer Relationship Management.
It refers to both a business strategy and a set of tools that help organizations manage customer data, automate sales and marketing activities, improve customer service, and maximize revenue through personalized engagement.

How Does CRM Benefit Different Types of Businesses?

CRM solutions are flexible and scalable, benefiting businesses of all sizes and models:

• B2B companies: Manage contacts, transactions, and payments to maintain strong relationships with partners and long-term clients.
• B2C businesses: Enable fast customer outreach, personalized messaging, and marketing automation to boost sales.
• SMEs: Cloud-based CRM systems, including free versions, help small and medium-sized businesses compete with larger enterprises.
• Large enterprises: Support complex workflows, advanced analytics, and automation to increase productivity and revenue.

Who Can Use a CRM System?

A CRM system is suitable for any organization or individual managing customer relationships—from startups to large corporations.

• Sales teams: Manage leads, opportunities, and deal history
• Marketing teams: Analyze data, run personalized campaigns, and measure performance
• Customer service teams: Resolve issues quickly using complete customer profiles
• Managers and executives: Track reports, revenue, and employee performance
• Administrators and support teams: Configure systems and manage access

CRM systems are used across industries, from education and retail to B2B and B2C, enabling unified data management and improved business performance.

CRM Online vs. CRM Offline: Pros and Cons

Both are customer relationship management tools, but they differ in deployment and usage.

Understanding what CRM is and implementing it correctly can significantly improve customer experience and optimize sales and marketing processes. If you are looking for a powerful, easy-to-deploy CRM platform tailored to Vietnamese businesses, WOWCRM by GMO-Z.com RUNSYSTEM is a strong option, combining AI, automation, and intelligent data utilization to deliver sustainable performance gains.