Sitting down to write this article, we asked ourselves some questions: Where were we before we became the best source of knowledge about CRM and sales? What questions were we asking? What didn’t we understand? What was most important us?
That was so long ago, we can barely remember. So, we thought…
If you don’t know where to start, go back to the beginning.
This article will go to the starting point, explaining the CRM essentials.
Prepare yourself! By the end of this loooong read, you’ll know everything there is to know about CRM software: What it is, what types of CRM are out there, CRM benefits you may get, who can use it, how it works, and how to implement it.
From a complete CRM newbie to a CRM know-it-all in one guide. It’s gonna be epic!
What is a CRM?
Customer Relationship Management (CRM) is software that lets businesses effectively collect, store, and manage their lead and customer information to build and maintain relationships with them. Essentially, it’s an organised repository for customer data and all the processes associated with its management.
CRM system is a part of a bigger CRM strategy developed by a company to establish strong relations with customers and make sure they stay with a brand for a long time.
There are different factors that can be used for CRM software classification, but the most common one is the location of the solution’s servers. Based on that, we can differentiate between cloud-based CRM systems and on-premise CRM systems.
Cloud-based CRM (also known as Software-as-a-Service CRM, online CRM, or web CRM) hosts the application and data remotely, on the vendor’s own servers. The system can be accessed from anywhere in the world via the internet.
On-premise CRM is a CRM software that companies build in-house for their own usage. In this case, both the data and the application itself are located on the company’s own servers and can only be accessed from the company’s premises.
A glossary of key CRM terms
When you’re just starting your CRM journey, it’s likely that you’ll come across specific terminology that may not be familiar to you, especially if you haven’t worked in sales before. We’ve compiled a short list of the most commonly used terms that CRMs are filled with. Knowing the CRM lingo will make it easier for you to understand the benefits of CRM software and get a better idea of its functionality.
Record (or contact): In the world of CRM, contacts (or records) are people. They are profiles of all the companies, contacts, and deals in your CRM database.
Tag: Tags are extra bits of information you assign to your records to segment them.
Lead: A lead is an individual interested in your product or service but isn’t quite ready to make a purchase yet — it’s your job to nudge them towards making a purchasing decision (nurture them).
Opportunity: Whenever your lead becomes really interested in your product and might actually buy it, they turn into a sales opportunity. You can use your CRM to track the progress of your opportunity.
Deal: A deal is an opportunity that went through — either positively (a won deal) or negatively (a lost deal). Make sure you keep track of both in your CRM to know how your sales team performs and whether or not you need to adjust your sales strategy.
CSV file: CSV is an abbreviation for “comma-separated values”. A CSV file is the standard format for exporting and importing databases and spreadsheets.
Dashboard: The dashboard is the home page of the CRM system, where you can access the navigation menu and all the key information. Most modern CRMs allow you to customise the dashboard and pick the information that gets displayed there.
Pipeline: A snapshot of the sales process that allows you to see all the deals you have and their respective stages (by default, it’s usually prospect, lead, opportunity, and customer).
Activity: In the CRM land, activity usually refers to anything that’s happened in the sales funnel or the system — new deals, records, interactions, etc.
Benefits of CRM software
Depending on the CRM software you choose and the CRM features it provides, CRM software can bring your business the following benefits...
Centralise all your customer data
Modern businesses acquire customer data from a variety of sources. If you want to stay afloat and keep your business growing, adopt a multichannel approach and ensure that you generate leads from different sources.
Maintaining spreadsheets, Filofaxes, or address books with customer data is pretty much impossible. Not only does it take a lot of time and effort, but it also increases the risk of missing crucial details and, therefore, sales opportunities.
CRM software centralises business data from email, social media, phone, web forms, offline lead generation, and other sources, storing it safely in one place.
Structure your customer data
Modern CRM users can also segment their contact database, add tags, and enrich them with additional details for better personalisation of sales and marketing activities. You can also link customer records to company records or deal records.
Improve the quality of your data
CRM software automatically logs every interaction your sales reps have with customers. No details about communication go missing because they’re deemed unimportant or too insignificant to record.
Even if it doesn’t, you can still improve the quality of your data by making certain fields required in the CRM. Then, a new CRM record can’t be created without filling out all the necessary information. Doing this will both standardise your database and save you from incomplete records.
Some CRM systems also offer advanced contact management functionality like duplicate prevention. Whenever you add a new contact to the database which matches an existing one, the system notifies you and gives you the opportunity to merge contacts.
Increase the security of your data
Leading CRM systems are built in compliance with data privacy and security laws and vendors do their best to implement technology to further secure the data you store, protecting it from hacker attacks and malware.
Thanks to permission access management, you can also limit the data certain people from your organisation can view and edit.
Better manage communication with customers
Thanks to sales pipeline visualisation and other sales pipeline management functionality, sales reps always know when to reach out to leads and customers. Create different views of leads and customers that need to be followed up on, that haven’t been contacted in a long time, or that live in a specific location.
With database segmentation and complete customer records in your CRM, you can craft better offers that your leads won’t be able to turn down.
Increase the productivity of your sales team
Salespeople spend just 37% of their time actually selling. The other 67% is wasted on administrative tasks such as manual data entry; the tasks that don’t contribute to closed deals and the bottom line
CRM software with sales automation solves this problem. Modern CRM systems can automatically capture leads, move them down the sales funnel based on certain criteria, and get a deal close to closing with minimum sales rep interference. This lets your teams focus on other, more important, money-generating tasks.
When sales reps are busy doing something they enjoy and not repetitive strenuous work, they tend to feel more positive about their job and, therefore, experience an improvement in their mental health. And there isn’t a more productive employee than a happy one!
Finally, CRM software helps to minimise switching between tabs . Collaborative functionality such as tasks and mentions gives sales reps an opportunity to work on converting leads from within the same system.
Improve customer service and customer support
CRM systems make it easy for the customer support or customer success team to communicate with customers and solve their problems efficiently.
This is because CRM software stores all the details of every customer interaction in a database, where the rep talking to the customer can access it during a support call. By knowing all the intricacies of every particular case, they can offer a quick fix promptly.
CRM software also helps customer support reps react to requests quicker. You can set up automated notifications and task assignment on a round-robin basis, based on trigger events, kicking the process off immediately.
Finally, it also makes your onboarding activities more efficient. If your CRM system supports drip email marketing, you can set up a sequence of onboarding emails and send them out to new users of your product immediately after they sign up.
Increase customer retention
CRM helps to achieve a higher quality of communication with customers, produce better-personalised offers, and better customer service. All of this helps to increase customer satisfaction and minimise customer churn.
It also standardises the customer journey for every lead that enters your sales pipeline, decreases user friction, helps identify disengaged customers early, automates assessment calls, automates subscription renewal, and helps identify reasons for churn of other customers.
Finally, CRM software helps to build and maintain stronger relationships with customers. You can set tasks, reminders, and even automated emails to remember all the important dates, anniversaries, and holidays to congratulate your customers with.
Find out how to reduce customer churn with the help of CRM strategies in this article!
Enjoy easier sales reporting
Sales reporting is an essential part of the sales process.
Unfortunately, it’s also tedious. CRM software offers sales reporting functionality that automates the process and creates clean, reliable reports for you in a couple of clicks.
You can customise those reports and pivot the information that is of interest to you at any given moment. CRM provides a standardised reporting process that includes everything you want it to, with no human error getting in the way.
Besides, CRM systems with email marketing functionality - email tracking in particular - help assess the effectiveness of your email marketing campaigns and the impact they have on your sales pipeline.
Make better data-driven decisions
With access to clean, relevant, and reliable reports, you can make better-informed decisions. By seeing what works and what doesn’t, you can tweak your strategy and focus on the activities that have the highest ROI.
Align sales and marketing teams
Sales and marketing teams both get real-time access to all the information about leads and customers in a CRM database.
This gives marketers a better understanding of customer behaviour. They can dig deeper and find the downsides of their strategies, discover customer pain points, and re-think their strategies way before it’s too late.
The sales team, on the other hand, knows exactly what brought each lead into the sales funnel, crafting a better-personalised line of communication to convert faster.
All in all, CRM software allows businesses to optimise their workload, prioritise leads, find better approaches to them, craft more valuable offers, and build better relationships. It leads to an immense increase in sales.
Research suggests that CRM software can improve sales by up to 29%
Work from anywhere
In-person meetings are extremely important for the sales process: they help establish a robust relationship, get to know your lead or customer better, and, therefore, allow you to excel at value-based (or solution) selling by adjusting your offer for maximum personalisation.
However, when you’re out of the office, running around the town (or the globe, for all it matters), it can be difficult to keep all the information in one place and remember it in detail. You need a dedicated space to promptly update your information about deals “on the go”.
Thanks to CRM software, you no longer have to depend on your memory when working “in the field”. Modern CRM solutions offer mobile versions of the system that can be accessed via any device connected to the Internet.
Beware, though! You can only leverage this benefit of CRM software if you invest in a cloud-based CRM system. Let’s take a closer look at how on-premise CRMs and cloud-based CRMs compare.
Cloud-based CRM vs. On-premise CRM
There are both advantages (✅) and disadvantages (❌) to cloud-based CRMs...
✅ No software licensing costs
✅ Data is stored and handled externally; no new overheads
✅ Upgrades and maintenance are handled externally
✅ A small cost for services
✅ Data can be accessed from anywhere in the world
❌ You don’t have complete control of your data and systems
❌ The possibility of security breaches
❌ Lack of autonomy in upgrades
❌ Reliant on the quality of your CRM vendor’s customer support
Likewise, there are both advantages and disadvantages to on-premise CRMs...
✅ A greater degree of control of the system and its data
✅ Better security; data is protected from ransomware and hackers
✅ Initial investment pays off over time
✅ Can be custom-built to meet all the business needs exactly
❌ The system can’t be accessed from anywhere you want
❌ Expensive initial investment
❌ You’re responsible for the security and backup of your data
❌ Requires dedicated IT staff for maintenance and support
Back in the day, it was also possible to differentiate between five types of CRM systems, depending on the functionality they offer: Analytical CRM software, operational CRM software, collaborative CRM software, campaign management CRM software, and strategic CRM software.
These categories are dated and the majority of good modern CRM vendors offer software that combines a wide-range of features. They enable all of those processes.
Key functionality which the best CRM systems provide…
- Contact management
- Lead management
- Opportunity management
- Email marketing functionality
- Marketing automation
- Sales automation
- Reports and dashboards
- Sales analytics
- Sales forecasting
- Mobile CRM
- Collaborative functionality
- Integration with third-party apps and solutions
Who can use CRM?
- The sales team uses CRM software to build and manage sales pipelines, qualify leads, analyse past sales performance and forecast the future ones, create reports, craft better offers, and convert leads into paying customers faster.
- The marketing team uses CRM software to segment their audience and run more successful personalised campaigns. On top of that, CRM data allows marketers to identify their ideal customer profile, map the customer journey, figure out the optimal number of touchpoints and maximise impact at each of them. As a result, businesses increase the number of marketing qualified leads (MQLs) and nurture leads more effectively.
- The customer support team uses CRM to standardise the onboarding process, enable a proactive customer success approach, establish and foster relationships with clients, speed up the response time, and offer more accurate solutions to customer problems. This becomes possible thanks to the fact that CRM allows storing and organising every detail of customer interaction so that it can be found promptly upon request.
- The C-Suite relies on CRM data to make more informed decisions about business strategy, product development, new markets, fixing bottlenecks, and more
Managers and top managers benefit from CRM, too.
CRM data can be useful for keeping tabs on the team as you can see what each of your subordinates is caught up with at any moment. Moreover, you can also a detailed overview of the tasks completed over a certain period and see which actions lead to success and which ones hinder the sales process. Then, you can use this information to conduct performance appraisals, calculate commission, coach your team, and lay out the goals for the next period.
But what types of businesses need CRM?
The answer is simple. You can benefit from implementing a CRM solution regardless of the industry your business operates in. Real estate, construction, consulting services, SaaS businesses, digital marketing agencies… You name it! Everyone benefits from having their database organised and their business processes structured.
As for the size of your business… Do small businesses really need CRM?
Long gone are the days when CRMs used to be big boy-only software. There are thousands of CRM solutions for businesses of all sizes. You can find a system for solopreneurs, tiny startups, SME businesses, and large enterprises. It all comes down to the functionality your CRM offers and how well it can be customised to bend around your specific business needs.
Find out more about the difference between small business CRM and enterprise CRM.
How does CRM work?
To understand the power of a CRM system you need to see how it works.
Here’s a quick overview of how CRM can help you handle sales from the moment before your lead enters your sales pipeline until after the purchase is made. CRM is a full-cycle solution!
Getting data into your CRM system is easy. Existing data is taken care of with manual import, either from another CRM system or a spreadsheet. It’s a quick export, import job, and it won’t take any more than five minutes.
For new data coming into your CRM, you can place a lead generation web form on your website and have all the submissions automatically roll into your database. You can have the CRM automatically create new records from incoming emails. Connect your CRM system to social media, such as LinkedIn, and capture leads from there. Or integrate your solution with Facebook Messenger and Intercom and pull leads from chats.
Each customer record in your CRM system contains detailed information about customers and leads that live in your database. You can customise the fields for contact cards to include exactly the information you need. For example, NetHunt CRM allows you to add any field such as first and last name, job title, location, deal size, associated company and deal records, email address, social media accounts.
Records are placed along a sales pipeline, which is a visualisation of your sales process. A sales pipeline offers an abundance of benefits for a business. It presents a picture of the health of your business, telling sales reps exactly what they need to do in terms of where customers are on their journey. You build your business around your sales pipeline, and you’ll wonder how you ever did it without one.
Different steps along the sales pipeline can be automated with CRM. You can set up a workflow to notify you about every lead that enters your sales pipeline and automatically assign them to a sales rep. That way, you can start lead nurturing.
Alternatively, you could delegate lead nurturing to your CRM system. Create a lead nurturing sequence that would handle the process automatically until you get a response from the lead.
Here’s an example of an automated lead nurturing sequence in NetHunt CRM…
Use CRM software to score your leads. You can also add tags to the leads that enter your sales funnel and segment them.
Whenever you communicate with leads, your interaction will be recorded in the contact record. For instance, NetHunt automatically links all the emails to records. You can also add notes to remember important details of your communication and refer to them in the future.
If you need assistance from other members of your team, you can mention them in the contact record or assign a task. The person you tagged will be on to it as soon as possible thanks to system notifications.
Step by step, you’ll be moving the lead down the sales pipeline, taking them from one stage to another up until the deal is won. Or you can have the system do it automatically based on an algorithm you set.
Even after the purchase is made, you can still benefit from CRM software. CRM systems help to automate the post-sales push and ensure you turn your one-time customers into returning ones. It’s called relationship management software for a reason!
How much does a CRM cost?
In the past, when the CRM software market wasn’t so competitive, a CRM solution was an expensive tool. Today, as the market grows and more vendors enter it offering all kinds of generic and specialised CRM systems, customer relationship management becomes significantly more accessible.
As a rule of thumb, CRM pricing depends on the features a CRM offers. The more features and extra modules a CRM offers, the more expensive it gets.
There are also different subscription-based pricing models for CRMs:
- Flat-rate pricing: a single product and a fixed set of CRM features at a fixed price per month.
- Tiered pricing: packages with various features that are available at various price points.
- Usage-based pricing: a base rate with an additional usage rate.
- Per-added-module pricing: a base rate for the standard CRM; functionality can be expanded upon request for a higher price. Per-user pricing: a fixed price for every user of the CRM. Currently, it’s the most widespread pricing model in the CRM software market.
How to implement a CRM system
Not all CRM systems provide you with all the functionality we’ve mentioned above. You need to approach the CRM-choosing process wisely before investing in a solution that fits your business best.
Here's a CRM implementation checklist, especially for you...
- Identify the purpose of implementing a CRM system
- Define the problems that your business is facing
- Find out which departments need CRM
- Get feedback from your team and identify their goats for using a CRM
- Plan the budget for both CRM software and its support
- Create a list of must-have CRM features
- Think through the integrations that you may need in your CRM
- Think about your company's future; define the level of CRM scalability
- Conduct research, filter out all the unsuitable CRMs
- Test CRM systems with a free trial
- Look through the reviews of the suitable CRM software
For a more detailed guide on how to choose the right CRM for your business, check out our article!
Once you decide to commit to a system you like… It’s time to get your team to use it!
To successfully implement CRM software at your company and leverage all the benefits it brings, you need to...
- Have your CRM vendor onboard your employees and show them how to use all the features of the CRM
- Put CRM training on the team member onboarding agenda for everyone who joins your company
- Migrate all the data from your previous data management system to the CRM
- Assign an in-house CRM manager that would help people with their CRM-related problems and requests
- Educate teams of the benefits of up-to-date CRM and prompt them to use it
- Automate as many of your business processes as possible using the CRM
- Regularly the success of your CRM implementation and adjust your strategy for better results
Find detailed steps about CRM implementation in our article.
And just like that… You understand exactly what CRM is. Congrats!
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