In the business world, Customer Relationship Management systems are used to optimize a company's sales by focusing its resources on those who are likely to buy. They are also used to improve customer satisfaction and lower costs by providing self-service options. In most cases, businesses are looking to sell more by reaching new customers or expanding business with existing customers.

In order to do this properly, CRM systems track, automate, and personalize all aspects of client interactions across all communication channels, including website, phone, in-store, e-mail, and social media such as Twitter, forums, and blogs. Every time a customer touches the organization in any way, the interaction is logged. This information is used to better understand the relationship with the client, to ensure that all interactions are designed to maximize the long-term profitability of the client to the business, and to attract new customers. Typically, Customer Relationship Management systems focus on tracking and enhancing customer interactions in the marketing and sales funnel workflow for new and returning customers, and later improving after-sales support. Depending on the industry and the company, CRM systems and techniques might also be used for tracking and enhancing relationships with other stakeholders, such as regulators, shareholders, or media.

The ideas developed for Customer Relationship Management systems in the business world have been adapted to the needs of the non-profit world in Constituent Relationship Management systems. While increased donations may parallel higher business sales, there are generally differences in terminology and processes. For example, good Constituent Relationship Management systems are designed to account for pledges, recurring donations, soft credit donations, and the portion of ticket or product prices eligible for political or charitable tax receipts.

More importantly, Constituent Relationship Management will go far beyond mere financial goals and measurements. Most non-profits measure success in non-financial ways, such as the following:

These organizations will have critical non-monetary measures of success beyond increased revenue and lower costs. They may include metrics based around education, service, advocacy, participation, case resolution, or other outcomes relevant to non-profit missions. Consequently, tools for managing constituents must go wider and deeper than financial metrics alone.

Despite these differences, Constituent Relationship Management systems are still fundamentally similar to Customer Relationship Management systems as they aim to support the growth in numbers and depth of engagement of contacts with an organization.

In the business world, one way this is done is by keeping existing customers happy, in order to avoid the high costs of new client acquisition. Similar strategies and techniques apply in the non-profit world, given the generally higher cost of acquiring new donors, activists, volunteers, or members, as compared to retaining existing ones.

Another good strategy in business is to aim to increase the volume of business received from existing clients. For example, you might identify one-time purchasers or low-end customers and seek to communicate the value of more expensive products (up-selling), or why they would want additional related products (cross-selling). It may also be achieved by focusing on increasing repeated business from customers who return more frequently for the same product (for example, to watch movies more frequently).

Non-profit organizations benefit from this same strategy, both in fundraising and in non-monetary appeals. For example, fundraisers typically aim to increase the recency (that is, how recently each donor has donated), frequency, and monetary value of gifts from their donors.

For non-monetary contributions, non-profit organizations generally measure constituent activity and communication. For example, they may seek to increase the actions of existing organization activists, such as appeals sent, educational programs attended, or shut-ins voluntarily visited. They also benefit by encouraging constituents to undertake actions that require more co-operation with the organization, or result in more impact, such as calling a radio call-in show to support a legislative position, in addition to signing a petition, visiting their elected representative as well as sending him or her a letter, and so on.

Increasing the number and depth of interactions can often involve targeting clients with shared characteristics, such as those who have made several recent low-cost purchases, or small donations for a special treatment such as an offer, a special ask, or other follow-up communication.

Another objective may be to ensure that those best suited for a product or service receive such a great experience interacting with your organization that they recommend it to others.

In the for-profit sector, this may involve sales personnel or systems using the purchase history of an individual or a company to respond strategically by offering appropriate discounts, cross-selling or up-selling suggestions, and so on. For example, a long-term customer might be offered a discount when he shows up at a website, a computer buyer might be offered small items at checkout time, including games for a previously purchased game system, or a client who has made premium purchases might get a more expensive range of products. After-sales support personnel would be provided with the whole record of attempts an individual might have made to resolve a problem, as this often helps narrow down an issue and avoid irritating requests to repeat actions. A complete customer record might show that an individual with a tough problem is considering a major purchase, or that they have had a history of making unauthorized technical changes to the product that might have impaired its functionality and voided its warranty.

In the non-profit world, parallel examples would include the following:

Similarly, technical support has parallels in non-profit case management. Imagine how much a non-profit serving at-risk youths could benefit from being able to easily pull up the records of someone calling in about depression, when those records reveal a caller has a history of suicide attempts? The extent to which you can capture, and later retrieve, such data for a constituent may significantly impact your ability to serve them effectively.

In all of the preceding business and non-profit examples, a tiny organization with a single staff person, serving a small constituent base, would be challenged to recognize the individual, remember the history of interactions with them, and act appropriately by providing a discount. More difficult challenges would include calling up someone who had stopped coming in, going the extra distance for someone who needs it, or curtailing resources dedicated to a relationship not related to the mission of the organization. Technology helps to scale these appropriate behaviors to situations where many staff members and volunteers have been involved in the interactions with the client or customer. It can help in situations where some of the staff members or volunteers may not have the best memory, and may not have the best judgment as to how to respond to the situation. The proper tools also help your organization retain institutional history through the inevitable staff turnover.