CRM Systems: The Guide to Customer Relationship Management
Jess served on the founding team of a successful B2B startup and has used a wide range of sales and marketing tools over the course of her 15-year career. She uses her industry knowledge to deliver the best answers to your questions about sales tools and sales management.
Jill is a writer at Fit Small Business specializing on Customer Relationship Management (CRM) software.
This article is part of a larger series on CRM.
A customer relationship management (CRM) system is a business tool that helps organizations manage their lead outreach and sales processes, and improve their relationships with customers. It is generally equipped with functionalities for lead and contact management, sales automation, pipeline monitoring, and business performance reporting. In this article, we explore the reasons why you should use a CRM and what it can do for your small business.
What is a CRM System?
At its core, CRM systems are shareable customer databases meant to aid teams in streamlining their various sales, marketing, and service activities to strengthen their relationships with their customers. CRM tools can be purchased as a standalone system like Salesforce or Pipedrive. Alternatively, it may be built into other kinds of software as a value-added service such as Mailchimp , which is primarily an email marketing tool, or Nextiva, a voice-over-internet-protocol (VoIP).
Why Your Business Should Use a CRM System
Customer relationships are the foundation of a successful business, but building good relationships takes time and effort. It entails various activities, such as constant communications, continuous re-engagement, understanding what your customers want, and meeting their expectations when providing products and services.
CRM tools help you streamline your sales processes and customer communications, ensuring nothing falls through the cracks. Some of the challenges you can avoid when using a CRM platform include difficulty in managing an influx of customers and leads, not having enough visibility into your customer data, being unable to accurately monitor your teams’ performance, and wasting time manually creating reports.
Top Advantages of Using a CRM
A CRM solution simplifies your customer relationship management process. It is equipped with tools and features that automate some aspects of your business operations and make customer interactions more efficient and effective, as well as improve your overall customer satisfaction score.
Some of the benefits of using a CRM system include simplifying sales processes, increasing your team’s productivity, and giving you centralized and easier access to customer information. It also provides data-backed insights for better decision-making and improved collaboration among your different departments—particularly sales, marketing, and service.
While using CRM entails some investment, it also provides businesses with tangible benefits.
CRM Software Costs
CRM systems can cost anywhere from free to more than $100 per user, per month, depending on the type of CRM and the features included in each package. Free and low-cost CRMs that range from $8 to $15 per user, per month usually support a limited number of seats and have lower data storage capacity. These also include only the basic CRM functionalities, such as contact management, lead management, and pipeline management.
CRM packages for mid-range companies can range from $50 to $150 per user, per month. These usually offer additional features for lead generation, collaboration, and reporting. Others offer more extensive CRM integrations. More advanced plans for large enterprises can cost as much as $300 per user, per month. The most expensive CRM tools include deeper customization options as well as highly sophisticated analytics and reporting tools.
Pro tip: Some CRM providers advertise low per-user fees, but there are often additional fees for training, onboarding, and implementation. Some options also have separate charges for support. Ask your provider about these items before committing to a CRM plan to ensure that the package you choose meets both your needs and budget.
Types of CRM Systems
Many new salespeople ask, “What does CRM stand for?” While CRM is an acronym for customer relationship management, there are three fundamental types of CRM: operational, analytical, and collaborative. While they have different sets of functions and purposes, each one of them has the same goal: to improve customer relationships and consequently grow your business.
Operational CRMs do this by automating your business and sales processes to save you time and effort. Analytical CRMs focus on gathering data and analyzing it to help you deliver better service to your customers. Collaborative CRMs, on the other hand, bring together your sales, marketing, and service teams to help you better understand your customers’ needs.
Industry-specific CRMs
Most of the popular providers are general-purpose CRMs that offer businesses a centralized location to manage customer data and interactions. However, some businesses benefit from using industry-specific CRMs. These CRMs provide more niche and specialized tools to help particular business types move customers and prospects through sales cycles more quickly.
Businesses that need industry-specific CRMs include companies in the insurance, healthcare, real estate, hospitality, mortgage, call centers, and construction industries. CRMs for these industries typically have processes and ready-made tools that need minor customizations. For example, a CRM solution for the real estate industry will usually have features for payment collection, lease contract management, and integrations with popular real estate marketplaces.
While general-purpose CRMs provide a more generic set of features that are universally helpful, some companies will benefit from using industry-specific CRMs that offer niche functionalities.
Integrating Your CRM With Other Business Tools
Software integrations connect various tools to sync essential customer data and allow them to flow in one or both directions. Integrating your CRM with other business applications your team is using helps facilitate more integrated customer data management and avoid information redundancies. For example, if a team member updates a customer’s contact details, it will automatically update the same information in all apps.
In addition, integrating your CRM with other apps is crucial in managing your customer relationships, especially if you need specific functionalities only certain software can provide. These may include some of the most popular CRM integrations, such as customer service or help desk, social media management, email marketing, and accounting.
Integrating your CRM with other business tools that you use can help scale the collective power of your software ecosystem.
Essential CRM Functionalities
Different CRM providers have their own set of features and highlight the special functionalities that sets them apart from other software. However, there are certain fundamental CRM features that should be included in their lineup of features, which users should look out for no matter which provider they are considering.
Creating Your CRM Strategy
A CRM strategy is a plan of action for business organizations to process their customer data from sales, marketing, and service teams, and use them to improve their products and services to better serve their customers. It is essential in strengthening customer relationships, driving business sales, increasing team productivity and collaboration, and improving the overall customer experience.
Creating a CRM strategy can be summarized in six steps—from reviewing your business goals to defining your team’s KPIs.
Implementing Your CRM
Implementing CRM software requires careful planning—especially if you want your team to utilize it. While most CRMs are designed to work out-of-the-box, you still need to take several aspects into consideration to get your CRM up to speed and make the most of your investment.
Steps included in implementing CRM are assembling your CRM team, establishing your goals and objectives for using the software, identifying data that needs to be migrated, and integrating third-party apps. You also need to train your team on how to use the system to increase CRM adoption and maximize its benefits.
We summarize CRM implementation in eight steps–from assembling your CRM team to measuring CRM adoption among your team members.
Top CRMs for Small Businesses
The best small business CRMs provide a unified platform for managing and collaborating on sales, marketing, and administrative activities. They also have essential CRM features including lead generation and management, sales automation and forecasting, email marketing, omnichannel communication platforms, and robust reporting tools.
Below are our top picks for the best CRMs for small businesses.
Small Business CRM | Recommended Use Case | Starting Price* |
|---|---|---|
 | Best overall for small businesses needing a robust CRM with free and affordable plans | Free or $15 per user, per month |
 | Best CRM for social media integration and inventory management | Free or $14 per user, per month |
 | Best for users who want an easy-to-use system with visual sales pipelines | $14.90 per user, per month |
 | Best CRM with a built-in phone for in-app calling | Free or $39 per month for up to 5 users |
 | Best scalable, free CRM for unlimited users | Free or $45 per month for up to 2 users |
 | Best small business CRM with advanced features like lead generation, customizable reports, and case management | $25 per user, per month |
*Based on annual pricing
For a closer look at the features, strengths, and weaknesses of each provider mentioned above, read our guide to the best CRMs for small businesses.
Bottom Line
CRM systems may seem overwhelming—and sometimes like overkill for your business. However, using a CRM often make the difference between providing timely and informative follow-ups and allowing deals to slip through the cracks. This makes the tool well worth the investment for businesses of all sizes, provided your entire team commits to keeping data up to date and is thoroughly trained on its expected use.
