CRM advantages and disadvantages

07 October 2021

Have you ever heard this abbreviation during a business meeting and wondered what it meant? It is quite possible that your collocutors were also not entirely aware of its meaning. The answer proves to be ambivalent and indicates a common misunderstanding of CRM nature.

CRM - what is it?

For starters, the sole abbreviation must be developed. The full name is Customer Relationship Management. However many people think that it refers to an IT tool which enhances customer service, the definition covers a much bigger area.

CRM is the whole philosophy and direction of the company's operation, which sets values ​​and goals towards contact, good relations and customer satisfaction. So customer relationship management can mean anything the company does on behalf of its customers.

CRM examples

Before we move on to the technological aspects of the customer service, it is important to mention other actions within the philosophy. Such a list may prove to be a perfect guidebook for businessowners who strive for higher company status and better opinion among customers. These actions are listed below:

  • Satisfying customer needs,
  • Detailed information for the client and answering their questions,
  • Adapting to the client's cultural values,
  • Implementing new strategies and continuous customer service improvement,
  • Managing all types of customer relationships,
  • Creating customer relationship management models,
  • Balance between acquiring clients’ loyalty and gaining new ones,
  • Accelerating marketing processes, sales, feedback and problem solving.

CRM - IT system and tool

All mentioned activities are linked with the pro-consumer policy, however, CRM may be also understood as a tool of its operation. On one hand, these types of solutions can automatize the immediate contact between contractors through different channels (that is e.g. messengers, e-mail, answering machine). On the other hand, they support the sales process, redirection to payment platforms, sending e-mails, etc. They also facilitate one-side contact, which the seller undertakes through creating groups for mailing, sending newsletters and notifications for respective groups of customers. CRM, basing on given guidelines, is able to group and save customers on lists using databases. Furthermore the owner may decide how often the actions must be taken, e.g. in terms of notification sending. Speaking of the databases, CRM makes a number of back-office activities possible, such as searching for information obtained from clients and performing analyses. The construction of such a system must of course protect personal data and operate in accordance with the GDPR.

Taking into account the capabilities of CRMs and the scope of enhancements offered, one may establish three types of tools: communication (customer interaction service), fron-office (sales operations service, support) and back-office (the ability to perform analysis on the obtained data).

CRM - advantages

The fact that customer satisfaction is a key factor of corporate success does not have to be explained. However, CRM doesn't just aim at that. It surely facilitates the growth of the company, while attracting more buyers, while also servicing those already acquired. This is all thanks to scalability, which allows one to gradually increase CRM scope used by a given company. In companies with already expanded customer base, it is easier to upsell, through systematic reminders about the services. Customers, with whom the seller is in constant contact, usually trust the company more and after some time are likely to repeat the purchase. The financial benefits of the CRM become in such a case much easier to be calculated: one just needs to check who responded to the offers sent in notifications. A little bit more difficult to calculate, but important nonetheless, are the features for customer service employees. In case when there are more than one problems to be discussed, it is necessary to switch the client on the line from one specialist to another. But when the system itself directs the client to the right departments (e.g. purchasing, technology, service, complaints, account settings), the problem can be solved faster and without any nervous situations.

The largest advantage of analytical part CRMs is surely more accurate profiling and determining target customers’ features. Collecting data (but only those acquired lawfully from the users) allows better offer tailoring and building better remarketing strategies. Nothing is as frustrating as unmatched advertisements – especially that the clients expect more from the companies they have already made purchase in.

CRM – disadvantages

While we are already talking about advertisements, they might become one of the biggest disadvantages of both CRMs and the whole strategy of relationship with clients. The problem is not only in badly targeted offers, but also in their frequency. Even a product which the customer is really interested in, may become their curse when they see it all the time. It is important to always stay moderate in such actions and avoid blatancy. There is a very thin line between keeping in touch with the customer and nagging them intrusively.

A very serious disadvantage of CRMs is in some cases the lack of integration with other company systems, which hinders proper data circulation. Acquired information give even better opportunities for analyses, but only if there is migration possible to corporate BI tools. Trade and accounting departments in turn must acquire all trading data online. It would be difficult to copy all those data or type from one programme to another. Therefore, before deciding to buy a certain CRM, it is worth checking to what extent does it integrate with corporate ERPs. An even better option is to buy a customer service module as an addition to the prevailing corporate documentation flow system. There are companies who offer IT tools of such kind and usually their clients are satisfied with having all tools and features in one environment.

Dehumanization of sales may pose another important problem emerging in case of CRM expansion. While younger generations are already used to the omnipresent technology and pay less attention to it, the older ones still consider human contact as an added value of trade processes. Those people who did not have contact with technology from the very young age, usually gain trust for the salespeople through phone conversations and meetings. Therefore, if the company’s target client is not very young, it should balance automatic and personal trade contacts. It is enough to remain available for clients on the line, make available to order a phone call and quickly (without the use of bots) answer text messages.

How do companies benefit from CRM?

CRM tools: Above all, it makes formalities faster. Those most repetitive activities within trade process also get shortened which can be performed automatically and do not need supervisor’s approval. Answers for the most frequently asked questions, sending e-mails, notifications, filtering clients with acquired data etc.

CRM philosophy: Trust and a feeling of being important to the seller. If the company embraces the client-bound strategy, it gains buyers’ loyalty very quickly. Positive opinions and personal experience of shopping in a given place usually discourage clients from seeing purchase as a form of gambling (will it be successful or not?). If taking care of the buyers is really the company’s aim and value, the clients will quickly realise that they can always stay in touch with the company and any returns won’t be a problem.

To make any profit out of all these CRM values, one must remember about two things: firstly, it is important to choose one, good solution that will benefit all company departments, not only those related to trade and service. Secondly, balance is necessary when it comes to automation and the frequency of contact with clients. They must feel important to the seller, but not embattled.


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Kornel Grzywocz

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