Is CRM and CLM the Same Thing?
In the era of rapidly evolving business processes, it’s crucial for companies to foster lasting business customer relationships. Two pivotal strategies and systems are often mentioned in this context: CRM (Customer Relationship Management) and CLM (Customer Lifecycle Management). Though they might sound similar, they serve distinct functions. This article unravels their definitions, similarities, differences, and how each can benefit a business.
Customer Relationship Management (CRM)
CRM stands for Customer Relationship Management. It’s a strategy and software solution designed to manage customer interactions, streamline customer engagement, and track customer communications. CRM systems play a vital role in a company’s relationship with both potential customers and existing customers.
- CRM Systems: CRM systems gather customer data, including purchase history, sales opportunities, and customer feedback. This data-driven insight aids sales teams and business processes, ensuring a company maximizes customer retention and nurtures developing relationships.
- CRM Software: CRM software, among other CRM tools and CRM platforms, provides an analytical tool for businesses to gain insights into customer behavior, preferences, and needs. By understanding these, companies can foster greater customer loyalty.
Customer Lifecycle Management (CLM)
Now, let’s delve into the nuance of “customer lifecycle management” vs. “customer life cycle management”. Both revolve around the customer lifecycle – the entire journey of a customer from the awareness stage, through the purchase process, to post-purchase stages, and possibly onto repurchase.
- Managing Customer Lifecycles: CLM focuses on managing interactions throughout the different lifecycle stages. The aim is to understand and cater to customer needs during these different measurable metrics and stages. From the first sales process to post-purchase, businesses aim to maximize customer engagement and retention.
- CLM Software: With the help of CLM software, businesses can track customer interactions, gather customer feedback, and provide data-driven insights for better customer communication and service.
Contract Lifecycle Management
While the above “CLM” denotes “Customer Lifecycle Management”, it’s important not to confuse it with “Contract Lifecycle Management”, another CLM. This strategy and its associated CLM systems deal with the entire lifecycle of a contract – from initiation and negotiation to fulfillment and renewal.
- CLM Focuses: Here, CLM focuses on ensuring efficient management of contracts, measuring contract performance, and working to shorten processing times. The aim is to provide clear and quick resolutions for both parties involved, leading to increased profitability rates.
- CLM Platform: A CLM platform assists in monitoring contract performance, ensuring that terms are met, and managing any potential risks. It’s an essential tool for businesses that handle numerous contracts.
Why It Matters with your CRM data
Both CRM and CLM are important tools for businesses to maintain and grow their recurring revenue. While CRM focuses predominantly on managing customer relationships and interactions, CLM dives deeper into managing customer lifecycles or the contractual aspects of business relationships.
CRM solutions, like InvestGlass CRM, provide a comprehensive platform for businesses to store customer information, manage sales opportunities, and foster customer relationships. On the other hand, CLM systems and software are more suited for businesses wanting to optimize the different stages of either the customer lifecycle or the contract lifecycle.
By leveraging both CRM and CLM systems, businesses can ensure that they’re not only acquiring new customers but also maximizing customer loyalty among existing customers, thereby ensuring sustained profitability.
To conclude, while CRM and CLM might seem interchangeable at first glance, they are tailored for different business processes, with distinct measurable metrics and objectives. By understanding their unique features and functions, businesses can deploy them effectively to boost their bottom line.