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The Difference Between Customer Service and CRM

Terms common to modern business are often used interchangeably. For example, it is pretty routine for companies to speak of customer service and customer relationship management (CRM) as though these were the same thing. They are not. They are two different ways of dealing with customers intended to create two separate outcomes.

This post is all about understanding CRM. Take special note of the fact that building solid relationships with customers requires more than just good CRM software for small business. It takes an entirely different mindset among all of a company’s team members.

Customer Service As a Function

Customer service is defined by Investopedia as “the process of ensuring customer satisfaction with a product or service.” To look at it another way, P2 Automation describes customer service as the process of working with customers to complete basic transactions. Staff members manning the phones at a travel agency are performing customer service when they accept payments over the phone.

The most important component that defines customer service is duration. Customer service takes place in the moment. It is in the here and now, designed to complete an immediate task in the short term. So while high quality customer service is necessary to retain customers, it is still short term in its implementation.

CRM As a Strategy

Customer relationship management is less a function and more a strategy for maintaining customer loyalty. Again, it is about more than just CRM software for small business. Effective CRM starts with recognizing customers as human beings rather than just names and numbers in a database.

The point of CRM is to work closely with customers at every point of contact. Your very first point of contact actually occurs when a person is first identified as a potential customer. From there, CRM is applied at every interaction between company and customer to ensure the customer is always taken care of.

Examples of CRM strategies include keeping records of communications, tracking purchases, maintaining long-term histories on each customer, and getting customer input.

Just the mere idea of maintaining customer histories demonstrates that CRM is a long-term strategy. Once a company begins CRM, there is no turning back. Effective CRM requires an active decision to commit to it for the long haul.

Data Is the Key

Another significant difference between customer service and CRM is data. In fact, this may be the biggest difference of all. Short-term customer service doesn’t require a lot of data above and beyond what is necessary to solve the problem at hand. On the other hand, CRM requires a constant stream of data that touches every point of customer contact.

This is where a company’s choice of CRM software for small business becomes critical. Effective CRM requires an effective software package capable of collecting and maintaining the right data.  CRM software starts with basic contact information and then expands from there. Note that data points differ from one business to the next.

The Customer Experience

In wrapping this post up, let’s tie CRM together with one of the latest trends in business: the customer experience. A general definition of the customer experience describes it as CRM from the customer’s perspective. In other words, customer experience is all about managing the customer relationship so that every interaction a customer has with the company is a positive one.

If your company uses the ‘customer service’ and ‘customer relationship management’ terms interchangeably, perhaps it’s time for a rethink. They are not the same thing. Moreover, thoroughly understanding both and getting a handle on them goes a long way toward maintaining the right kind of customer experience.