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2. What is CRM?


Establishing and maintaining good relationships with customers provided few problems in the past when businesses were small and customers were identifiable by sight rather than by an ID number or code. The Manager of the small business knew each of his customers, understood their value to him in terms of how much they spent and how often, remembered their idiosyncrasies and their preferences. Customer relationship management was a term unknown but a practice adhered to if business was to be successful.

Today, the sheer size of businesses and organizations and the wide range of customers means that good customer relationships must be explicitly managed if they are to be successful.  Thus, the concept of Customer Relationship Management or CRM has arisen. Customer Relationship Management may be defined as:


...a management strategy that enables an organisation to become customer-focussed and develop stronger relationships with its clientele. It helps piece together information about customers, sales, marketing effectiveness, responsiveness and market trends.

Soutiman Das Gupta (2005)

One way that large businesses can have at hand the necessary customer information needed to maintain good customer relationships is through the use of technology. There are, indeed, many sophisticated CRM systems that attempt to manage customer data and even the customer experience.

CRM technology enables

  • information about the customer to be stored in databases

  • businesses to analyse that data, pull out customer preferences and make clear their behaviour

  • easy access to that data across departments that may be widely geographically dispersed

  • easy access for customers in terms of online transactions

  • speedy personalized communications that enable the customer to feel valued and special even though in reality they may be just one of hundreds of thousands of customers

Diagram of CRM

The three parts to CRM – technology, processes and people

In a sense, the technology part of CRM – the database - largely equates to the information that was previously stored 'in the heads' of Managers of small businesses. But good customer relationships are about far more than that.

Processes, or key steps, have to be put into place to make sure that such data is used effectively. In fact it is the processes that hold the whole thing together.

And the people involved in any way with the customer have to be aware of those processes and preferably believe in those processes so that a seamless service can be delivered to the customer.

Process Map section

  • By definition – a business is only as successful as its processes (Phinney, 2001)

  • Each company will have a number of discrete activities that occur from the initial customer inquiry, through to completion of the sale, customer support and after sales service. These are the processes.

  • It is unlikely that any two businesses will sell in exactly the same way, using the same number of steps and the same procedures. In other words, different businesses will have different processes in place.

  • Since processes are so critical to the success of any operation or business, the need to document them carefully is critical (see section on process mapping).

The people

In the same way that it would be important for the Manager of the small business to train his staff so that they understood his customers in the way that he did and understood the benefits to the business in treating them in a certain way, so it is equally important for people in large organizations to be suitably trained in the processes and technology used.

  • No CRM implementation will be completely effective without the commitment or buy in from the people involved. Without commitment, processes may be inefficiently implemented, by-passed or break down completely.

  • Indeed, it is usually the people (or cultural factors) that define success or failure of the CRM systems, not the technology itself.

Definitions of CRM

It is clear from the previous pages that Customer Relationship Management, CRM, involves far more than technology.  It involves technology, process and people.
So, a very simple definition of CRM might be:


CRM is a business and marketing strategy that integrates technology, process and all business activities around the customer.

Feinberg & Kadam (2002)

There are, however, multiple definitions of CRM and the actual definition may vary according to the particular department or industry defining the concept.

On the next few pages we will look at CRM in HEIs and FECs. It may be that for educational institutions it feels more appropriate to use the term Partner Relationship Management. The cultural difference between the corporate world and the education sector may call for a different approach. This point is highlighted by the Corporate Projects Manager from one HEI:


Whilst we must ensure that we first and foremost we have a financially sustainable institution there are loads of relationships we foster because we measure benefits in many other ways which have more to do with our place in society our mission and our shared values. The problem at the moment is the language is very corporate and the general impression is left that what CRM is about is putting a very large vacuum hose into a clients pockets and sucking until there is nothing left but fluff. We need to be on the look out to develop our own CRM language in the sector. I think the concept of mutuality between the HEI's and Constituents is important.

Using a definition that suits your organization is important. However, whatever definition you decide upon, it is useful to keep the following quote in mind.


Keep the technological aspects of CRM in perspective as the means, not the end. Think ‘successful corner shop’ as an underlying principle. There, a working ‘memory’ of customers, supported by two-way dialogues, is what enabled effective customer relationship management.

Payne (2006)

Customer Relationship Management and HEIs and FECs

There is considerable contrast between the culture of many universities and colleges and that of other organizations when it comes to the operation of a business-to-business service (KSA Partnership, 2007). As such, the implementation of CRM is very much at an infancy stage within the educational sector and take-up has been inconsistent.

Many of the challenges facing HEIs in particular, arise from the following factors.

  • The pluralistic nature of these institutions

  • The wide variety of customer groups – eg students, business, community groups, staff

  • The wide spread of services that the institution delivers

  • The historical nature of these institutions and a culture which has allowed some departments to act autonomously, to develop their own systems and their own ways of working

  • The large number of databases that will exist across the institution, some of which will be managed centrally, some at the Department or School level, and some at a more individual level.

  • There may be duplication of information across different databases

  • Different systems may mean different ways of recording the same information

  • There may be a myriad of ways of communicating with the same clients. Only some of this may be cross-referenced.

  • Different cultures exist across different Schools and Faculties. Some cultures may be resistant to the sharing of information and collaboration.

Top tip!


We did use an external consultant (to help with training staff to be more customer focused) to support me as project manager, but we couldn’t just have employed an external consultant – they have to understand the culture. The private sector is not like the public sector and some things I knew just wouldn’t work. But we also took some risks – initially you might get a negative reaction but you do get a reaction – they notice this is something new.

To examine more carefully the practices within your own institution work through the Self-analysis checklist.

Learning from others

Without doubt, there will be challenges specific to your institution. However, it is always useful to learn from others!

Listed below are some of the issues identified and the lessons learned by institutions during the adoption and development of a CRM system. Some issues are obtained directly from the KSA Partnership study (2007) while others come from our own case studies with HEIs and FECs.

  • Have a clear CRM strategy and agreed implementation plan

  • Clearly identify what the CRM will be used for

  • Where possible, change your college / work / business processes to match the CRM rather than trying to manipulate or change the CRM to match what you do. It will be less expensive, might make you more money and you should have happier customers.

  • Have sufficient and dedicated resources for implementation, including for training and data input/cleaning/extraction.

  • It needs good communication and selling of benefits, including at individual level, to bring people on-board early.

  • The scoping process for the system with all potential users is very important.

  • It takes a long time to embed and to realize benefits

  • It is a journey/system not an instant solution. You will need to maintain and sustain management commitment, momentum and use, especially for data quality.

  • It needs to be driven from the bottom but supported from the top.

  • Deal with problems immediately (don’t let them deter, delay or fester).

  • It is a people based process involving business process development and change management, not an IT system implementation.

  • It needs to be mandatory. Turn off old systems.

  • Work closely with the supplier to understand product capability in a specific context.

  • If external consultants are being used, ensure they work closely with internal colleagues and produce documentation that will allow in-house staff to replicate work done in the future.

  • The product’s ease of use/tailoring is important, together with achieving integration with personal and corporate systems and processes.

  • Do not try to replace main systems with your CRM system. Make sure they work together rather than duplicating unnecessary information.

Top tips!


Any institution that wants to undertake a CRM project should spend time learning from a business perspective what a CRM system can and cannot do. In retrospect, a problem we experienced was that we didn’t fully understand what a CRM system would really do (other than record everything!).


It is important to spend time planning the project at a high level. Our project was planned in stages that covered implementing the system with one team before moving on to the next team. This meant that the project team never had an overview of how the organization would use the system, how data would flow, and what interactions would be needed with other systems.


It was useful to establish some business protocols for data entry to ensure that data in the CRM could be easily transferred to other databases if needed (eg agree a standard way of creating an organization contact record).

The components of CRM

Let’s look now at the components of a CRM system and how it might work in practice. Below is an example of a CRM implementation in a Local Authority (National Project Guide, 2004)

The diagram below shows how the implementation of CRM enables customers to be connected to front and back office and possible third parties.

CRM overview


The central component of a CRM solution is generally the creation of a single shared customer database – allowing information to be collected once but used many times. The sharing of this customer data across the authority, in conjunction with the functional tools provided by a CRM solution, allows the authority to make gains in both efficiency and effectiveness.

National Project Guide (2004)

A unified view of the customer

The advantages of a unified view of the customer, compared with the more traditional approach are also illustrated in the following diagram from Rodgers and Howlett (2000).

Traditional structure

Traditional customer view

  • Silo of information

  • Different views of customer, even in front office

  • Limited communication among departments

  • No transparency through supply chainain

Unified view of the customer

Unified view of the customer Characteristics:

  • Departments linked around same data can be tied to marketing campaigns

  • Visibility across enterprise

  • Better customer service

  • More effective front- and back-office operations

A case-study is available describing how CRM has been used successfully within an HEI to provide a unified view of thestudent through the integration of student records, finance and personnel systems.

CRM and other industries

Although the cultures and working practices of other organizations may be quite different from those of HEIs and FECs, it can still be useful to look at how they have implemented CRM and the benefits they have obtained. The examples that follow are taken from the banking, airline, hotel and amusement park industries.

The Banking Industry

Banks are a long way along the CRM route, recognizing the need to target customers effectively and to identify the value of particular customers and the investment needed to gain their loyalty. 

They use technology

  • to collate accurate, up-to-date information on customers

  • to target products and services to coincide with the life-stages of customers.

  • to provide greater customer access to products and services (24-hour banking)

They need effective processes:

  • to ensure transactions are safe

  • to reassure customers that their transactions are safe

  • to consolidate multiple records for individual customers

  • to alleviate distress when errors do occur eg the AIB banking group assigns to groups of customers designated Relationship Managers to deal with grievances and to provide a more personalized service

Case study: CRM usage in the banking industry

The Airline Industry

The airline industry is extremely competitive and while safety record, image, price and flight convenience are undoubtedly influences on passenger behaviour, it is service that is the real differentiator (Enterprise Information, 2005).  

The airline industry uses technology

  • to allow customers to find out travel information such as flight availability and cost of flight.

  • To allow customers to book flights online

  • To allow customers to check-in online at any time and from anywhere.

  • To collect information about individual customers preferences and buying behavior

  • To identify profitable customers

  • To build loyalty by rewarding profitable customers

  • To increase sales

The processes that allow the airlines to implement all of this are only apparent to the customer when technology fails! The people element may become apparent when the technology and the processes fail! So, for example, when Terminal 5 failed, blame was placed on

  • Technical errors (technology)

  • Mechanical failures (technology)

  • Lack of system testing (processes)

  • Poor communication(processes)

  • Complacency (people)

  • Refusal to listen (people)

  • Lack of training (process)

  • Inadequate contingency plans (process)

Case study: CRM usage in the airline industry

The Hotel Industry

Customer service has always been a high priority for the hotel industry.

The hotel industry uses technology

  • Develop sophisticated websites that allow potential customers to view their facilities

  • To enable online booking

  • To collect information about individual customer’s preferences

  • To use the data they have collected to offer loyalty packages to profitable customers.

Processes have to be in place to ensure that all staff from manager to receptionist, from kitchen staff to cleaner all have the necessary training and information to provide a seamless, consistent and individualized service to their customers.

The people element becomes apparent when individual members of staff fail to show commitment to the processes designed.

Commitment can be encouraged by other processes that enable staff to feel valued and rewarded.

This is less easy to overcome, however, when there is a conflict of interest, as can occur between franchiser, management company and owner of hotel.

Case study: CRM usage in the hotel industry

The Amusement Park Industry

Even Mickey Mouse uses CRM!

Case study: CRM usage in the amusement park industry

Key points to remember about CRM

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Good Customer Relationship Management involves people, processes and technology

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The IT infrastructure integrates disparate customer data and enables a better understanding of customers

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Efficient processes are essential if the data is to be used effectively

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Well-trained and committed staff ensure the smooth running of the system

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Partner Relationship Management may feel a more appropriate term to use than CRM. Choose a definition that suits your particular institution

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Be aware of cultural constraints

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Learn from others who have travelled further down the road of CRM

Now that you are familiar with the concept of CRM we shall look at it in more detail in the context of Higher and Further Education.

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