What Is a CRM and How Does It Work?

Blog post image: What is a CRM and how does it work?


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Maintaining good relationships with customers is the cornerstone of every successful business, but in decades past, the process of managing and tracking customer relationships within a business was fragmented and time-consuming at best. Companies would store physical customer data in filing cabinets, rolodexes, and spreadsheets.

These methods of customer-data storage not only involved a lot of manual work, but they also meant the information wasn’t properly distributed across the business (between sales and marketing departments, for example), often leading to missed business opportunities.

With the introduction of the Internet came a wave of new marketing-technology (MarTech) platforms to help companies create, manage, and track customer relationships in the form of a customer relationship manager (CRM).

What Is a Customer Relationship Manager (CRM)?

A customer relationship management (CRM) platform is a piece of software companies use to manage interactions with customers, store information about them, and automate a number of processes connected with a customer’s journey through the marketing and sales funnels. A CRM system is an incredibly important tool for every company, helping to foster customer loyalty and forge it into healthy revenue.

What Does a CRM Do?

At the most basic level, CRM software allows marketers and salespeople to manage and analyze relationships with the company’s actual and potential customers. It enables tracking every interaction with the company and collects information about the customer. This way, when speaking to a customer, the marketer always knows who they are and sees their history with the company. This makes the interaction more personalized, increases the chances of conversion, and encourages customer trust and loyalty.

CRMs include functionalities which allow you to track customer/company interactions through various available touchpoints, including those from:

  • Contact forms
  • Search engines
  • Emails
  • Phone calls
  • Social media

The software takes care of certain processes—it can offer automation of marketers’ repetitive tasks, sets reminders for important events, and displays alerts if things really need attention. Some CRMs also offer analytics capabilities, allowing you to track the efficiency of various marketing efforts to generate leads and conversions.

CRM software, in combination with marketing automation, provides sales and marketing teams with a set of tools to manage the entire sales and marketing funnels, from lead qualification to opportunity management, forecasting, and deal closure.

An image of a typical marketing and sales funnel

End-to-end management of the sales funnel involves a combination of marketing-automation (top of the funnel) and CRM functionalities (bottom of the funnel) systems. We are witnessing the trend that many popular CRM platforms either acquire or develop their own marketing-automation systems to offer the functionality. HubSpot, for example, offers both, while other CRMs enable easy integration with other marketing-automation systems.

Here’s a list of functionalities typically offered by a CRM platform:

  • Lead management: A CRM tracks the company’s leads, allowing marketing teams to enter new leads into the system (automatically or manually) and to track and analyze data about them.
  • Marketing automation: Some CRMs like HubSpot and Salesforce offer marketing-automation functionalities to automate certain tedious tasks in the funnel. For example, the system can automatically send customers marketing emails at times set by the marketer, or publish social media posts according to a schedule. The goal of marketing automation is to keep sales leads engaged and to help turn them into paying customers.
  • Sales automation: CRMs can track customer interactions and automate selected business functions of the sales cycle that are necessary to follow leads and attract and obtain new customers.
  • Workflow automation: CRM systems help businesses optimize processes by streamlining mundane workloads, which enables employees to focus on creative and more high-level tasks.
  • Analytics: CRM solutions can offer built-in analytics tools that offer insights and help boost customer satisfaction rates. A marketer can analyze the data and create targeted campaigns accordingly. CRM analytics help to track attribution and provide insights into the quality of the customer experience, ultimately leading to increased customer satisfaction.
  • Artificial intelligence: CRM solutions like Salesforce offer AI capabilities built into their systems to help automatically recognize patterns leading to successful sales, which can help you build more accurate strategies for future marketing efforts.
  • Individualized customer experiences: You can also use a CRM to create personalized and consistent experiences for your potential customers across various marketing channels, which may help increase conversions and boost brand awareness.

We Can Help You Build a MarTech Platform

Our AdTech development teams can work with you to design, build, and maintain a custom-built MarTech platform for any programmatic advertising channel.

Off-the-Shelf CRM Solutions

There are numerous companies offering commercial, ready-made CRM solutions. The platforms come in different shapes and sizes, but are usually provided as SaaS, offering marketers a combination of sales, marketing, and customer-service functionalities.

Below are a few examples of some popular CRM systems:


Salesforce is considered the leading off-the-shelf CRM. According to the research giant Gartner, the pioneering cloud-based solution currently boasts 19.7% share of the market.


HubSpot CRM is known for offering deep insights into every prospect, allowing granular control of every part of the sales funnel. Real-time tracking of customer interaction helps to understand their needs and respond accordingly. HubSpot allows you to track the source of prospects’ visits, their interaction with emails (clicks, opens, or re-opens), and downloads of marketing materials like white papers and case studies from your site.

Hubspot allows you to install additional plugins for seamless integration with Gmail or Outlook.


Salesflare is a CRM that helps sales and marketing teams save time by automatically adding contact information to customer profiles, reduce time spent on data entry by more than 70%.


Oracle CRM handles all customer relationship management issues and business processes on a single platform and offers a variety of deployment methods.

Microsoft Dynamics CRM

Microsoft Dynamics CRM closely trails Salesforce in terms of share and sales. The platform has been growing rapidly over the last few years and is currently available either on-premises or in the cloud.


SugarCRM is a leading open-source CRM solution. It’s a lightweight platform founded in 2004. The solution is incredibly popular among small businesses and offers both on-premises and cloud-based deployment options. Pricing ranges from $35 to $150 per month per user.

Is an Off-the-Shelf Solution Good for Your Business?

Pre-built CRM solutions like those listed above are created to meet the expectations of most businesses. However, the features they offer may prove irrelevant to the needs of your organization.

Every extra feature comes at a cost, not only money-wise, but also in the form of a steep learning curve for marketers. Excess always leads to complexity; after all, it will take a lot of time for people to learn the new system’s functions. Developing a custom CRM solution is a way to get rid of all the distractions which compromise your sales team’s productivity.

It is very unlikely that your company will need every single feature an off-the-shelf CRM can offer. What’s worse, you have to properly configure and deploy the whole software package, even if the features you desire are only a fraction of the system.

As evidenced above, many software vendors such as Salesforce, Oracle, and Microsoft offer enterprise CRM systems. However, there are a number of inherent problems with out-of-the-box solutions:

  • High ongoing costs
  • Excessive features that aren’t used by your company
  • Difficult integration with existing company systems
  • Limited extensibility and customization of features
  • Minimal or no control of your data
  • Varied GDPR-compliance standards (some CRM’s interpretation of the GDPR and other privacy laws will likely be different than yours)

Building a Custom CRM

A CRM system is an easy way to quickly start tracking your customers and automate marketing workflows. The decision to go for a custom solution should be based on the consideration of certain factors.

The general problem is that ready-made CRMs, albeit functional and reliable, come with a number of unnecessary or overrated features. While your business may benefit from an off-the-shelf system is some way, sometimes what you really need is a platform carefully built to your company’s needs.

The development of a CRM system that seamlessly integrates with your business requires the participation of the developer and the client to help put together a workable, high-functioning CRM system that can integrate with existing systems of the company.

CRM platforms are becoming the bread and butter of business today, and building your own provides some serious business advantages.

Benefits of Building a Custom CRM

  • Stripping down excess features. With a custom-built solution, you get exactly what you want without any of the superfluous functionalities you may never use. The development can focus on the features you really care about. A lightweight and effective customized CRM can cost only a fraction of the off-the-shelf price, but be better integrated with your business at the same time.
  • Getting the exact information the way you want it. A custom CRM can be built around your business and your processes, and not the other way round. You can generate even the most granular reports, which provide a fuller view of your customers and your business.
  • Better control over the feature roadmap. Control over the technology and development process of the application gives you the power to control what features will be implemented next, and to what deadlines.
  • Lower cost. Off-the-shelf CRMs are not cheap—Microsoft Dynamics CRM costs around $5,000 for the server software and around $1,100 per user, or $65 per user per month in the case of its in-cloud version, Microsoft Dynamics CRM Online. While the initial cost of building bespoke software may be even higher, the investment will pay off in the long term. Since the software is designed and developed to your specific needs, there is no need to purchase additional add-ons when a new feature is required. A custom CRM enables you to easily add new users without the need to purchase separate licenses for each additional user.
  • Data ownership. As most CRM systems are hosted in the cloud, the data you collect is stored in the vendor’s databases. While there are ways to easily access your data (e.g. via APIs), it’s still not 100% owned by your company. This can be a real issue for large companies that require ownership of their data and have strict data-protection policies. By building your own CRM, you can fully control your data and store it in on your own databases.
  • Better integration with existing systems and platforms. From sales to customer service to technical support, your daily operations will be able to run more efficiently when the system is integrated across multiple departments. By pulling data from various sections of the company, you can achieve a customer view beyond the singular perspective of individual departments.
  • GDPR compliance. As mentioned above, one company’s interpretation of the GDPR and other privacy laws can differ from another’s. A recent report from Demandbase found that 80% of marketers were concerned that their MarTech vendors might expose their company to GDPR legal risks. Taking your marketing technology in-house allows you to build your CRM platform in accordance to your company’s legal policies and also assists with complying with the GDPR—for example, being in control of responding to user-rights requests, such as the right to access or delete their data.

The CRM Platform Development Process

The process of building a well-integrated custom CRM solution comes at a cost beyond the price. It requires relentless focus on, and understanding of, the existing business processes of your company.

Since the CRM-development process involves active participation of the client, it is also a great opportunity to take a step back and decide which processes in your company are working and which aren’t. Granted, the development itself may take more time and attention of the company’s workers, but the resulting product will be one that accurately meets the requirements of your company and reflects its processes, accurately mapping the customer journey down the funnel.

Read more about a typical CRM platform development process here.

The Future of CRMs

Modern CRM systems are evolving and starting to offer functionalities beyond what they currently do compiling customer data across different channels. We are seeing social media integration, AI, holistic profiling, and much more.

By partnering with a company offering custom CRM development, you can expect that the resulting CRM solution will be scalable and ready to grow along with your company by closely reflecting its processes and seamlessly integrating with existing systems.

This is also an opportunity to tap into emerging technologies and become the trailblazer with competitive advantage in the industry—long before the off-the-shelf vendors catch up.

We Can Help You Build a MarTech Platform

Our AdTech development teams can work with you to design, build, and maintain a custom-built MarTech platform for any programmatic advertising channel.

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