What is CRM? [The Complete Guide for Beginners]

When was the last time you had to remember someone’s phone number to call them?

CRM, which stands for customer relationship management, is a solution reminiscent of such a change. It's essentially an IT service, much like the service provider of your smartphone sim card. Just like how online CRM software stepped in to obviate the need to memorize phone numbers, CRM serves as an organization's engagement strategy. It manages a company's interactions with current and potential customers by utilizing data analysis about customer touchpoints to improve business relationships. This cloud-based CRM technology, just like your phone contact list, allows a team member to have all the needed info at their fingertips including emails, products they're interested in, and more.

CRM, accessible through online IT services and provided by your chosen IT support, acts like a searchable phone directory or a place where all necessary customer information is stored. It is akin to a pipeline of information, specifically focusing on customer retention and driving sales growth. This cloud-based CRM system, much like remembering a phone number, makes the process convenient and organized. One can easily view the CRM pricing and decide which package suits their organization's needs the best.

Some people don’t even know their spouse’s cell phone number, even though they talk to them every day. Once the data, such as emails, is inputted into their phone, a similar activity occurs within the CRM technology of the organization. Their service providers become a tap or click away, overcoming the barrier of disorganization. Keeping every team member connected with the customer at all touchpoints, just like a button-press away on their phone.

And now, all you need to do is say their name into your phone and the voice search AI takes care of the rest. Such advancements in CRM technology have prompted organizations to opt for automated solutions in managing customer relationships through cloud-based CRM systems. These products are a vital part of any business's IT services.

Automation has permeated every nook and cranny of our communications infrastructure. Yet, many businesses are still relying on dated strategies and legacy systems to manage their customer communications. The need for online CRM software is ever-growing as businesses are constantly battling for resources with service providers offering more efficient solutions that modernize communication with customers.

That means they are slow to follow up. Their messages aren't personalized, and more time is wasted on outdated processes. Cloud-based CRM systems, an integral IT service, came in as a strategy to rectify this very problem, turning companies into well-organized units.

CRM was the largest software market in 2017, and the trend will steadily continue to grow as more companies realize the benefits of CRM technology integration. According to HubSpot, engaging customers by providing customer touchpoints with CRM, which is a strategic resource, increases the odds that they’ll buy more products by 20 to 40%.

Despite their widespread availability, and even with the prevalence of free, open-source CRMs, not every business is taking advantage of online CRM software. A few years ago, 18% of salespeople didn’t even know what CRM pricing was and shockingly, 40% of salespeople were still using dated resources like Microsoft Excel or Outlook to store their lead data. Switching to a dedicated CRM service provider can greatly enhance productivity and customer satisfaction.If you’re struggling with outdated processes or frustrated with your current software's ability, it’s time to get up to speed with cloud-based CRM systems. A pipeline of resources and CRM tools is readily available to help every team member, especially your employees, get started with CRM. These useful tools will change your business activities, effectively simplifying and organizing them.

The term “CRM” stands for “customer relationship management.” As a concept, customer relationship management is a method of using data and analysis to optimize your company’s interactions with both your customers and potential customers. CRM is particularly focused on sales growth and customer retention—a strategic component pivotal for any organization's success. A good CRM solution keeps track of customers' history and experiences with your business, enabling you to respond to their needs effectively. In this era, efficient CRM technology, such as the ones offered by online CRM software, plays a paramount role in connecting various customer touchpoints.

Although it may not make sense grammatically, you’ll often see and hear the term referenced as “a CRM” or “the CRM.” In this context, a CRM is a type of software that helps you manage your customer relationships. This solution, or rather, CRM solution, has become a staple system across businesses and service providers globally, helping improve customer retention rates and maximize return on investment out of your marketing budget.

When they first hit the market, you had to install CRMs on your business computers with a hard copy like any other type of software. But today, most CRMs are cloud-based tools you can log into with an account. As the business world has become so complex and interconnected, CRM providers have expanded their software’s capabilities to include customer segmentation, thus enabling email campaigns and aiding customer support teams in resolving issues more rapidly. These CRM tools keep a record of your employees' activities while providing the ability to answer important questions regarding customer interactions. In the digital age, Customer Relationship Management (CRM) systems have become an indispensable solution, playing crucial roles in growing businesses and ensuring the security of customer information.

Some of the most popular CRM systems include:

Operating at the basic level, CRM systems are much like a digital Rolodex. They safely store the vital data of all your contacts, ranging from their email addresses, phone numbers, names, job titles, and more, within a secure IT infrastructure. Easy access to this data greatly helps beginners efficiently handle customer interactions, elevating their customer support teams to provide superior service.

What is CRM?

Today’s CRMs, however, provide much more value than just being a digital Rolodex. The best of them can integrate flawlessly with almost all your other sales, marketing, and even third-party analytical tools, offering solutions that potentiate the maintenance of a smoothly running business.

Experts mainly categorize CRM into three types: Operational, analytical, and collaborative. Some CRM systems combine all three types, constantly emerging with new and thrilling applications, much to the delight of their users.

Operational CRM software is tailored to streamline and optimize business operations. Achieving this primary function through automation— a computer technology that performs a task or a sequence of tasks with minimum human intervention—CRMs can efficiently support various business processes such as sales, marketing, help desk support services, billing, and even HR. These processes, especially sales, marketing, and customer services, form the core functions of an operational CRM.

Marketing automation tools, a crucial ingredient of CRM systems, track visitors on your website, noting their actions and any data they put into form fields. This technique, which operates under the umbrella of contact management, enables you to discern who is interacting with your marketing assets and what their motivations might be. It equips you with detailed customer experiences information for each site visitor, allowing you to market to them more effectively and efficiently manage your marketing budget.

Drawing from a comprehensively designed dashboard, your CRM manages the data collected to customize your messages when conducting email campaigns and other forms of outreach, eliminating tedious manual processes. CRM features also come in handy in managing the sales cycle, especially when making calls or engaging in chat sessions with potential and existing customers.

On the sales side, automation tools facilitate the creation of workflows, scoring of leads, and automated reminders for follow-ups, thereby improving customer retention rates and bolstering return on investment. Through these CRM features, it's easier to manage the sales pipeline, track calls and chats, thereby maximizing productivity and enhancing customer experiences.

• HubSpot CRM
• Salesforce
• Oracle CRM
• Zoho
• Sugar CRM
• Agile CRM
• Pipedrive

Customer Service automation tools filter customer activity and immediately notify your agents of new tasks while providing immediate responses to customer queries. This boosts the efficiency of your customer support teams through real-time chat communication. You can even automatically update a customer's account data with minimal data entry. The expanded CRM capabilities, including integrated sales tools, can significantly streamline this process, resulting in better team productivity and contributing to successful customer acquisition.

The key to using a CRM system successfully lies in its ability to harness and manage data, an aspect that surprisingly, up to 73% of companies overlook according to Forrester. Modern CRM solutions like MailChimp have evolved to fill this gap, doubling down on sentiment analysis tools to extract invaluable insights, particularly from data obtained from chat sessions and calls, throughout the sales cycle.

The analytical component of a CRM performs automatic data collection at specific touchpoints and correlates it with different contact profiles. For example, if visitor A arrives at your website, your CRM may record their IP address. Consequently, armed with insights derived from their data, your system might greet them with a personalized dashboard, enhancing their customer experience.

Operational CRM Software

However, the most critical tools for analytical sales and marketing CRM software are segmentation and analysis tools. By harnessing your customer behavior tracking data, you can segment different contacts, leads, and customers based on various criteria, thereby enhancing customer acquisition strategies and improving your team's productivity.

Lastly, for analytics, you need a way to measure the success, or otherwise, of every action taken. This is pivotal in calculating the ROI of all your efforts, managing your sales pipeline, and improving overall customer experiences. Your CRM can compare contact data with campaign data, action point data, and other figures to give you a clear snapshot of how your campaigns are faring in relation to your metrics and KPIs. Modern CRM solutions, laden with sophisticated features, can provide valuable insights into customer behaviors, preferences, and responses in various stages of the sales process through sentiment analysis.

In a legacy business model, most departments are siloed leading to inherent challenges. In other words, your marketing, sales, and customer service teams may all be part of your business operations, and crucial to customer engagement, but they might as well work at different companies. There is little communication between them and they each have their own initiatives and processes. CRM solutions, as part of an overarching CRM strategy, aim to bridge this gap and enhance productivity by bolstering inter-departmental communication and collaboration.

In some of the worst cases, there may even be distrust and finger-pointing between the departments. This calls for strong managers to oversee the integrative processes and establish a tighter collaboration.

As bad as this is for your company and your culture, it’s even worse for your customers. Most customers expect a seamless and uniform experience when they interact with a business, whether they’re reading an email or speaking with a customer service rep. This is where customer interaction comes into play, reinforcing the need for rapid and reliable responses. Strong customer data management practices, supported by CRM solutions, can help to meet these expectations reliably.

They want you to know who they are and what they need immediately, and they won’t tolerate it if you’re missing information or they must wait while you process requests. With the advent of artificial intelligence, customer needs can be anticipated, greatly improving the efficiency of these processes.

Collaborative CRM software brings all your teams together into the same system, sharing dashboards, analytics, and tools, so you can create a more seamless customer experience. This unified view facilitates greater productivity across your sales teams and more effective customer support, making the most of CRM capabilities for customer acquisition and retention. Have you ever wanted your sales team to write for your blog? Or, incorporate their valuable sales process insights into your campaigns? Your teams can also collaborate on campaigns when working under a collaborative CRM system. Furthermore, they can streamline and manage their work using workflow automation, keeping track of numerous tasks, subscriptions and managing interactions across social media channels.

Analytical CRM Software

Every CRM is different, but most of them share a lot of the same concepts, so much so that these terms have become standard in the business lexicon. Nonetheless, defining them will help you understand how they each relate to your CRM software. Understanding these terms is a prerequisite in efficiently using CRM apps to manage your customer relationships.

An object is simply a data point in your CRM. For example, it could be a contact you have stored in your database, or even a piece of contact information associated with a contact, such as a phone number. Objects may change over time depending on how your customers move through the buying cycle, and with workflow automation, these changes can be tracked more efficiently.

Any individual whose contact information you have in your database is a contact. They could be a lead, a business partner, a supplier, or even your mom. With the help of CRM solutions and sound CRM strategy, your sales teams can have a clear view of the contact's status and their interactions with your business across various platforms, including social media channels.

Collaborative CRM software brings all your teams together into the same system, sharing dashboards, analytics, and tools, so you can create a more seamless customer experience. This unified view facilitates greater productivity across your sales teams and more effective customer support, making the most of CRM capabilities for customer acquisition and retention.Have you ever wanted your sales team to write for your blog? Or, incorporate their valuable sales process insights into your campaigns? Your teams can also collaborate on campaigns when working under a collaborative CRM system. Furthermore, they can streamline and manage their work using workflow automation, keeping track of numerous tasks, subscriptions and managing interactions across social media channels.

Every CRM is different, but most of them share a lot of the same concepts, so much so that these terms have become standard in the business lexicon. Nonetheless, defining them will help you understand how they each relate to your CRM software. Understanding these terms is a prerequisite in efficiently using CRM apps to manage your customer relationships.

Collaborative CRM Software

An object is simply a data point in your CRM. For example, it could be a contact you have stored in your database, or even a piece of contact information associated with a contact, such as a phone number. Objects may change over time depending on how your customers move through the buying cycle, and with workflow automation, these changes can be tracked more efficiently.

Any individual whose contact information you have in your database is a contact. They could be a lead, a business partner, a supplier, or even your mom. With the help of CRM solutions, your sales teams can have a clear view of the contact's status and their interactions with your business across various platforms, including social media channels.

To marketers, a “conversion” may occur when a website visitor fills out a form or clicks on a CTA. To salespeople, a conversion may only occur when a lead has been qualified through CRM apps. Either way, a conversion is when an object in your database converts to something else — usually a status further down the buying cycle.

Experts debate about how best to classify leads. But one thing is for sure: Leads are contacts who have shown some interest in your business. By analyzing this customer data, extracting insights and applying them in your sales process can enhance the efficiency of your sales teams' productivity. They can manage their subscriptions and keep track of leads and contacts better with CRM apps.

Leads in your CRM will most likely have converted on one of your marketing assets at some point, thus giving you their contact information. Leads are worth pursuing, either with more marketing materials or with a sales call. Consequently, CRM solutions integrated with workflow automation can come in handy in managing such a process effectively. Specifically, an account is a company you wish to sell to. You may have several contacts in your database who are part of the same account. Each step of the customer journey is meticulously tracked, allowing your sales reps to effectively manage their interactions.

In a CRM, keeping account information allows you to perform account-based marketing (ABM) more effectively. Utilizing a CRM platform, you can sell to multiple contacts across a single company and keep your campaign cohesive at the same time, ultimately driving up customer satisfaction. Workflow automation in CRM makes this process even more streamlined.

Terms You Should Know

If a lead is very interested in what you have to offer, they may become an opportunity. Some CRMs, let's call them CRM apps, break the process down even further into marketing-qualified leads (MQLs) and sales-qualified leads (SQLs) to get a better understanding of which opportunities are ready for a sales call and which are not.

Objects

Campaigns can house a series of deployed marketing assets, as well as metrics for the entire body of the campaign. This data can be efficiently organized and tracked using CRM apps and workflow automation, also enabling real-time tracking of campaigns on social media channels and managing subscriptions effectively.

Contacts

In a CRM, keeping account information allows you to perform account-based marketing (ABM) more effectively. Utilizing a CRM platform, you can sell to multiple contacts across a single company and keep your campaign cohesive at the same time, ultimately driving up customer satisfaction.

Conversions

If a lead is very interested in what you have to offer, they may become an opportunity. Some CRMs, let's call them CRM fs, break the process down even further into marketing-qualified leads (MQLs) and sales-qualified leads (SQLs) to get a better understanding of which opportunities are ready for a sales call and which are not.

Leads

Campaigns can house a series of deployed marketing assets, as well as metrics for the entire body of the campaign. Through your CRM fs, you can launch multi-channel marketing campaigns to effectively track its ROI, for example. Of course, you could also launch a sales campaign or a customer service campaign.

Workflows consist of a series of tasks that you have automated in your CRM platform. They are made up of triggers and actions. The actions will not occur unless they are triggered first, creating a seamless customer journey.

Accounts

For example, if a lead qualifies themselves as working at a company with over 200 people, this may trigger a specialized email campaign for those types of companies to be sent to them, facilitated by the CRM platform.

API stands for “application programming interface.” An API is simply a set of programming standards that let you access a cloud-based software application, making the work of your sales reps more efficient.

Opportunities

CRM companies will often release their APIs so other companies can develop software that integrates with their own system, or vice versa. This way, such companies can build partnerships, reach new markets, and provide more value to their customers, thereby increasing customer satisfaction.

Campaigns

For example, if your company swears by the efficacy of Google Analytics, you won’t want to give it up just because you’re integrating a new CRM. Instead, you can find a CRM that integrates with the Google Analytics API, maintain your company's commitment to customer satisfaction.

Workflows

It has even been foretold that by 2022, when it comes to enterprise software spend, the CRM platform would take the top spot as the single largest revenue area.

When you consider the fact that sales representatives spend less than 36% of their time selling owing to complex customer journey patterns, you know there has to be a better way.

APIs

A CRM should save you from having to keep track of prospects on paper, but this is just its core functionality. A CRM wouldn’t even be a CRM if it didn’t help you manage your contacts, create calendar reminders, manage tasks, and create basic reports.

A CRM should also contain key features that help you build more efficient processes, make better use of your time, and achieve more desirable business outcomes. The best CRMs should also include tools for digital marketing, sales automation, and customer service optimization, making the life of your sales reps easier and increasing customer satisfaction.

At the most basic level, your CRM should have the following features:

Best-in-class CRMs may also include some of the following features:

What are the Key Features of a CRM?

When you consider the fact that sales representatives spend less than 36% of their time selling, you know there has to be a better way.

A CRM should save you from having to keep track of prospects on paper, but this is just its core functionality. A CRM wouldn’t even be a CRM if it didn’t help you manage your contacts, create calendar reminders, manage tasks, and create basic reports.

It should also contain key features that help you build more efficient processes, make better use of your time, and achieve more desirable business outcomes. The best CRMs should also include tools for digital marketing, sales automation, and customer service optimization.

At the most basic level, your CRM should have the following features:

• Custom reporting
• Contact interaction tracking
• Document storage and delivery
• Mobile access (usually through an app)
• Social media integration
• Email integration
• Workflows
• Quotes and deals management

Best-in-class CRMs may also include some of the following features:

Call tracking and call center managementSocial media marketing automation toolsEmail marketing automation toolsCustom website formsWebsite integrations (or its own content management system)Ecommerce integrationsA blogging platformReferral trackingProduct trackingSales automationHelp desk management tools

In most cases, a CRM provider will allow you to select from a list of 3-5 CRM packages depending on the size of your company and your needs. Each package will unlock a certain number of features in the system.

Enterprise companies may buy the most expensive package available, but smaller businesses can often do just fine with a smaller package.

Some providers will work with you after you’ve implemented your CRM. However, there may be premium costs associated with this type of consultation. That’s why many companies seek out help from agencies and other third-party consultancies.

Make the Most of Your CRM

If you're considering a new CRM for your business, you’ve got a lot of choices. There are hundreds on the market.

Simply selecting a CRM is hard enough. Onboarding it, integrating it into your existing systems and training your entire team to use it is a different story. In the end, you need to draw value from your CRM so you can realize true ROI.

It can be difficult to leverage a CRM for beginners. So schedule a call with us today to discuss your technology stack and your other marketing needs.

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