American fast-food chain McDonald’s serves more than 69 million customers every day throughout the world. Such a huge customer base means exploding amounts of consumer data. Yet, the organization manages to successfully segregate this data to extract the best value out of each customer it serves, making them return to McDonald’s time and again. The secret to its success? Effective customer relationship management (CRM)!

McDonald’s CRM strategy helps the organization generate targeted marketing campaigns, launch promotions and offer personalized loyalty rewards to its customers. CRM makes it easier to gauge customer interests, measure their satisfaction levels and quickly resolve complaints. But what is customer relationship management?


  1. Definition Of Customer Relationship Management

  2. Components Of Customer Relationship Management

  3. Types Of Customer Relationship Management

  4. Benefits Of Customer Relationship Management

  5. The Power Of Communication

Definition Of Customer Relationship Management


Client or customer relationship management refers to the technology, tools and practices that organizations use to track and analyze their interactions with customers. It gives organizations a clear understanding of where they stand in terms of customer experience, how well they influence their clients and the aspects that need to be worked on. The end goal of customer relationship management is improving relationships with customers, increasing customer retention and driving profitability.

The meaning of customer relationship management has evolved over decades. Nowadays, most organizations refer to CRM software and technological tools when talking about customer relationship management. The different kinds of CRM technology available include on-premises CRM, cloud-based CRM and open-source CRM.

Components Of Customer Relationship Management


The components of customer relationship management help organizations qualify leads, manage customer needs, record interactions, automate operations and close deals. Following are some of the key components of customer relationship management:


1. Lead Management

Lead generation and management is one of the most essential components of customer relationship management. It revolves around tracking sales leads and their distribution, integrating sales and marketing approaches. Organizations are able to identify target customer groups, study client behavior, generate leads and plan engaging marketing campaigns with well-defined objectives.

2. Relationship Development

Strong customer relationships have a direct impact on an organization’s growth. Client relationship management incorporates tools and processes that facilitate gathering and understanding customer data. This is done through consistent communication channels and documented interactions over phone, social media or email. Organizations gain a thorough understanding of customer pain points and interests, and can tailor their products and/or services to customer needs. All of this leads to lasting customer relationships, driving retention and loyalty.

3. Customer Service

Customer service is another significant component of customer relationship management. Customer data collected through CRM channels are handed over to the departments concerned. Such data includes customer history, buying habits and past complaints. Employees can then appropriately respond to customer needs and deliver quality solutions, boosting customer satisfaction.

4. Workflow Automation

Often considered one of the most productive components of customer relationship management, workflow automation helps organizations reduce costs, save time and streamline workflow. Employees no longer need to perform tedious manual tasks over and over again, and are able to concentrate on other, more pressing matters. Productivity increases, the possibility of error is reduced and work culture improves.

5. Analytics

Analytics in client relationship management allow organizations to understand the evolving business market, make data-driven decisions and assess progress. Customer data gathered in the CRM database—both past and present—are analyzed through graphical representations, charts and diagrams. Organizations are able to study current trends, migrate to more profitable customer segments and generate targeted marketing campaigns.


The various components of customer relationship management correspond to different aspects of the customer journey—from customer acquisition to engagement and retention. It’s crucial to driving organizational growth, maintaining healthy customer relationships and optimizing business processes.

Types Of Customer Relationship Management


Customers are the driving force of business growth. Organizations need to have the right tools at hand to keep abreast of customer trends, assess customer bottlenecks and influence their relationship with customers at any given point.

The three main types of customer relationship management are:


1. Collaborative Customer Relationship Management

The major focus of collaborative customer relationship management is sharing relevant customer information across multiple departments in an organization. This breaks down silos and ensures all departments have access to the same information in real time, irrespective of their field of operation. For instance, the data gathered by a sales representative is readily available to the marketing team for them to develop customized campaigns.

Data sharing between departments through collaborative CRM tools also facilitates a seamless customer experience. Customers don’t need to repeat themselves every time they are transferred to a new department within the organization. The employee they are conversing with can easily pull up relevant information on past interactions with the customer and deliver quality solutions much faster.

2. Analytical Customer Relationship Management

Organizations turn to analytical customer relationship management to effectively analyze customer data collected over time and shape a growth strategy. The tools and techniques of analytical CRM systems interpret, segregate and process large blocks of data to yield valuable insights on customer behavior, buying patterns, conversion rates, profitability and the current business scenario.

Equipped with this information, organizations are able to identify high-value customers, common customer complaints and the kind of leads and campaigns that generate maximum profit. Analytical customer relationship management is also instrumental in highlighting existing flaws in the current business approach and examining how quickly customer issues are being resolved. Data mining is an example of an analytical CRM process.

3. Operational Customer Relationship Management

Operational customer relationship management centers on automating and streamlining an organization’s business processes related to customer management. From lead generation to sales forecasting and campaign management, operational CRM systems incorporate tools that govern the entire customer journey, including touchpoints.

Sales automation, marketing automation and service automation are a part of operational customer relationship management. Removing time-consuming and repetitive manual tasks, these boost internal productivity and help organizations maximize cross-selling and up-selling to increase revenue.


While the three primary types of customer relationship management are interrelated, each has its own unique advantages. Organizations can opt for a combination of all three types or choose one that best meets their business needs and objectives.

Benefits Of Customer Relationship Management


We now know what is CRM and understand the meaning of CRM, its components and its types. Now let’s look at a few ways in which compelling customer relationship management benefits organizations, big or small.


1. Organization

Client relationship management heightens organizational efficiency by allowing businesses to organize, optimize and streamline every aspect of the customer journey through automation and analytics.

2. Personalization

Consumer data stored in a CRM system helps organizations personalize interactions, generate one-to-one marketing emails and consequently boost return on investment (ROI).

3. Customer Segmentation

CRM tools analyze trends in consumer behavior for categorizing customers according to shared interests and spending patterns. Effective customer segmentation enables organizations to direct their offering to the right market.

4. Customer Retention

Client relationship management allows organizations to map the entire customer lifecycle to gain an overview of customer interactions. This understanding facilitates optimization of touchpoints, improving the overall customer experience. Satisfied customers are more likely to return.

5. Faster Communication

Not addressing customer complaints or queries in a timely manner can be detrimental to business. With customer relationship management, employees can readily access stored consumer data to resolve problems faster, respond to frequently asked questions with ready-to-use templates and monitor response time to make necessary adjustments.


Customer relationship management gives organizations more clarity in terms of their business operations, highlighting ways in which they can boost profitability and reduce customer turnover in the long term.

The Power Of Communication


Ongoing communication is critical to effective customer relationship management. Technological solutions can simplify processes. But in the absence of meaningful client communication, organizations will fail to keep up with changing customer expectations and productivity will take a hit. The goal is to connect with customers on a deeper level. This makes them more likely to trust the brand, and remain loyal and engaged.

Harappa’s Confident Communication Program is designed for anyone who wants to communicate with impact. With a skill map of must-have “Thrive Skills”, the program is built on a Learn-Practice-Feedback-Repeat approach that drives immediate change. Professionals are trained in persuasive communication, active listening and connecting with audiences. They develop positive body language and learn to make compelling arguments, structure ideas and speak with confidence.

Built on Harappa’s 10 on 10 pedagogy, the program comprises a carefully curated selection of academically robust and application-oriented concepts. These include Aristotle’s Appeals, the Pyramid Principle, Power of Three, Mindmapping and the Cornell Note-Taking Method.

The 15-week program aims to achieve transformative outcomes from professionals whose roles require frequent communication. They’ll learn to articulate the most important ideas with precision, decode core objectives and tailor messages to the audience and synthesize ideas together into a coherent narrative.

Equip your employees with the power of compelling communication. Sign up your organization for a demo today!

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