CRM and SRM: More Alike than Different?

customer relationship management

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What is CRM?

For those working in sales, CRM or Customer Relationship Management is a staple. For the layman or the customer, it seems like a very complicated concept. To put it simply, CRM is software that manages a company’s customer relations and activities. A lot of companies (specifically the company’s department that deals with customers) use this software to store and track two types of customers – customers who are already patronizing the company and the ones that could be attracted.

CRM deals mostly with data and with customer data, something that a company can do with a lot of things. CRM software should be able to three important things with data – organize, synchronize and automate. Customer data can be in the field of sales, customer service, marketing or technical support.

CRM for small business and corporations are readily available. Some CRM systems are free, online and very simple to use. Others are very detailed, exclusive and sophisticated. It is a program that can be designed depending on a company’s structure and needSRMs.


Apart from a one letter difference, SRM (or Supplier Relationship Management) differs from CRM in many ways. Unlike CRM, SRM deals with a company’s suppliers and the relationship between two companies or businesses. There are also many fields of differences. In one area, SRM has to be part of the company – like an office or department. It cannot be just software or any kind of tool.

Since SRM involves working with suppliers, there is a need for strategic planning and managing interactions with all suppliers. Compared to CRM, SRM requires a more thorough understanding and collaboration between two parties. It is also very likely in SRM that the two parties involved have a reciprocal relationship.

Components of both CRM and SRM are also different. CRM involves tailored marketing, customer service, building brand loyalty, subscription, rewards and promos to retain or attract new buyers. On the other hand, SRM needs an organizational structure and governance as well as a supplier engagement model, values measurement, joint activities and systematic collaboration with the supplier. It also requires technology and systems like databases – akin to CRM.


crm and srm

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Given in their names, both CRM and SRM lead to the same goal – maintaining important relationships for the company. Even if the receiver of such relationship is different, there is an additional underlying similarity. CRM uses data about their customers to increase their profit. Data is also very important for companies in SRM – supplier data is critical in the supply chain management and the procurement process.

The element of engagement is also present. With these similarities, it can be argued that some CRM strategies can be used for SRM in the context of procurement.

One strategy is collaboration. With CRM, a company collaborates with its customers/clients to improve its services or products. The same way can be applied to suppliers. Companies can engage suppliers to provide more quality materials or a variety of products and services that it can use. In addition, a company can ask a supplier to modify its product or service line in accordance to a company’s policy. One policy example is producing environmental friendly products.

Another strategy can be integration using technology. There are various CRM programs that help identify and classify customers. A similar program can be used with suppliers. This can be a powerful and efficient tool when it comes to organizing suppliers with different categories and filters. Searching and gathering information about a supplier can be easier and efficient.

Rewarding suppliers can also be a good tactic derived form CRM. Companies give a lot of rewards in different forms. The most popular rewards system is a point-based subsystem i.e. when a customer buys a certain store or product they are rewarded with points that can be accumulated. The same method can be applied for suppliers. If they present a desirable product or service, they can be given rewards. The forms of rewards can be another contract for that company, etc.

Providing reliable and genuine information is also a good strategy when working with both suppliers and customers. Customers reserve the right to be told about the products and services they are planning to purchase. Informed decision and transparency builds the trusts between sellers and buyers. The same can be said for a vendor and a buyer in a procurement context. A company that fulfills the customer roles wants the best product or service, without any compromise. On the other hand, a seller who doesn’t provide accurate information about its product and services can be terminated from a contract and worse, excluded from participating in future procurement activity.

What about you? Have you tried using a CRM or SRM software? Share your experiences below!

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