What is CRM? A Comprehensive Guide for Businesses

Customer relationship management software is a sales and marketing tool that organizes imported data, manages lead pipelines, and optimizes business workflows. Build custom dashboards that reflect your sales process and track every client interaction, from lead generation to deal closing, in one hub.

CRM software integrates with other tools, like calendars or email providers, and can automate mundane sales tasks while keeping the customer experience front of mind.

What is a CRM?

CRM software is a system or platform that tracks all lead and customer interactions and data. CRMs are meant to help identify and generate new leads and potential customers and then follow them through a business’s entire sales process from start to finish. This can include everything from marketing email campaigns and meeting notes to AI-generated content and sales rep performance analytics and business forecasting.

CRM software can be completely customized to fit branding, user experience, collaboration needs, and customer workflows. They’re often desktop plugins or desktop applications with mobile app versions offered, allowing sales reps and users to access that same information on the go.

Who is a CRM for?

A CRM is software for salespeople, departments, or any client-facing business looking to manage customer relationships. While it is sales-forward software, I see CRM solutions as a great tool for closing the gap between marketing, sales, and customer support departments and teams. This is because a CRM acts as a one-stop-shop for all customer information so that there is a single source of truth for the team.

A CRM can support any industry. The most popular CRM is typically generalized, meaning they’re made to fit core needs with a mix of basic and advanced features and functionalities. There are CRMs that cater to specific markets and industries, such as real estate, marketing firms, accounting firms, hospitality, technology, financial services, and so much more.

Types of CRM

Most CRM software scales to match the size, needs, and industry of the business implementing it. There are both general and industry-specific CRMs, all of which typically fall under four specific types of customer relationship management: analytical, operational, collaborative, and marketing.

Analytical CRM

Analytical CRMs take both internal and external data and turn it into actionable insights using advanced forecasting and AI features. Sales teams who want to better forecast future deals would benefit from this kind of CRM.

Operational CRM

Operational CRMs support more administrative responsibilities, customer-facing tasks, and other back-office or day-to-day duties. They are best for businesses looking for a tool to monitor customer life cycles or who need more sales automation functionality. Create custom workflows with rules that trigger activities such as updating records, sending emails, and assigning duties.

Collaborative CRM

Collaborative CRMs can facilitate company-wide collaboration between sales, marketing, and service departments by collecting and sharing customer data, such as touch points, all from one hub. These CRMs offer more advanced team management and permission features, making them great for customer support and sales teams generating and sharing leads.

Marketing CRM

Marketing-focused CRMs assist with generating and nurturing online leads through social media, email, and other channels. In addition to basic email marketing, these CRMs can create drip campaigns, run social media campaigns, or help with landing pages and website creation.

How does CRM work?

CRM software manages client contact data, supports entire sales pipelines, and coordinates marketing campaigns for both B2B and B2C businesses. CRM software collects data that matches an ideal customer profile and then generates detailed reports and leads profiles. These profiles and pipelines build out custom dashboards that continuously track individual or entire company sales progress.

SEE: How to Create Effective CRM Strategy

CRMs prioritize automating as much of the sales process as possible. This can include data entry tasks, sales forecasting, and even directly engaging with clients on a business’s behalf. They’re meant to house all client interactions in one place and consolidate communication such as form fills, emails, calls, and meetings. They can also store important documents, notes, and purchase history, allowing entire teams, departments, and businesses access to the same up-to-date data.

CRMs are meant to take the burden of repetitive tasks from sales reps, such as miscellaneous calendar scheduling tasks or meeting follow-up, so they can generate and nurture leads and close deals quickly with great service. A CRM will scale its services to meet current needs while also spotting opportunities for growth and adjustments to get the business where it wants to be.

Benefits of CRM

Even small businesses who start out using simple sales tools, spreadsheets and calendars will eventually need to adopt a CRM to help monitor growth and maintain clientele. Generally, CRMs are worth the investment for their help with automating and streamlining a sales process. For any industry and any size business, having one main tracking and pipeline management software that can integrate with your existing tech stack can be game changing.

Some standout benefits of implementing a CRM are:

• Create effective workflows: Automate a variety of tasks through third-party integrations, like sending emails, calendar reminders, and even customer service touchpoints.
• Monitor progress: Track team or individual milestones through a CRM dashboard and monitor engagement patterns with leads.
• Solidify data segmentation: Import and organize large and complete sets of data, making it more accessible and understandable for all employees.

Drawbacks of CRM

Choosing and implementing a new CRM into an already existing sales process and organization can be a challenge. Learning the software and then fine-tuning it to match specific needs can take time. Some more significant drawbacks to using a CRM can include:

• Can be expensive: Allocate a healthy budget since CRM software can be a big investment, especially for smaller businesses.
• Expect a software learning curve: Dedicate time to deploying new software to a team since CRMs can integrate with different applications and sync across software.
• Occasional technical difficulties: Expect technical difficulties such as customer profile duplicates or delayed information syncing.

Popular CRM providers

The most common CRM providers cover a range of ideal use cases, industries, and geographic locations. Some of the top providers include:

• HubSpot CRM: Utilize live chat software, AI email writing tools, company insights, and dashboard-building functionality.
• Zoho CRM: Implement robust automation with detailed analytics that can be personalized to match client needs.
• monday CRM: Manage client and internal communication and workflows from a single hub.
• Pipedrive: Create custom pipeline stages with actionable sales tasks and monitor performance with heightened privacy and security around data.
• Insightly CRM: Forecast future deals with their advanced sales lead tracking and opportunity management.
• Creatio: Automate custom workflows and build out unique sales processes with no coding and robust support, including courses, videos, and playbooks.

Factors that influence CRM pricing

CRM pricing is typically based on tiers of support and features. The main factors that influence pricing include how many users you want to have access to the software and what specific features or integrations you require. Some of the more advanced features you want might only be accessible through purchasing a higher support tier.

It’s an industry standard for most CRM software to offer lengthy free trials or demos for clients to test drive the platform themselves before committing to a larger purchase. If you’re okay with a more scaled-back version of CRM software, some providers have a free version of their system available to use long term.

Should your organization use a CRM?

When deciding if your business should use a CRM, first consider your company’s current pain points and general goals. If you want better communication and cross-department strategy, look into a collaborative CRM. If you want to focus on lead generation and sales pipeline growth, a marketing CRM would fit your needs well. This will help narrow down your choices when it comes to selecting a CRM system for your organization.

If you think your business could benefit from a combination of CRM types, I suggest opting for a more general CRM with various core features. The same goes for industry-specific CRMs that cater directly to your business needs. For example, if you want a real estate and property management CRM or a recruitment and staffing CRM, there is software on the market with unique features that support those business types.

Frequently asked questions (FAQs)

What are the different types of CRM?

The four different types of CRM are analytical, collaborative, operational, and marketing CRM systems. It’s important for me to mention that most generalized CRM solutions fall into more than one of these categories. I suggest considering your business needs and industry to determine which is a better fit for your organization.

What is the main goal of customer relationship management?

The main goal or purpose of managing all customer relationships is to provide both current and potential customers with a unified experience of your business and brand. This is done through consistent marketing campaigns, trackable follow-through, and data-backed insights into sales rep performance and customer satisfaction. All of these are features and benefits provided by CRM solutions.

When does a business need a CRM?

Just because you’re a startup or small business doesn’t mean you can’t greatly benefit from a CRM solution. No matter your business size or market, any organization that openly engages with customers can benefit from a centralized hub of information, activity tracking, and the data integrity a CRM can provide.