If you’re considering customer relationship management software (CRM) for your business, then you’re on the right page! In this handy guide, we answer any and every question you may have about how CRM works and how it can help your business.
Read on to learn what CRM software is used for, what it does, and why you should invest in a CRM for your business today! Plus, we’ll teach you about the different types of CRMs out there, how your teams can benefit from it, and how to choose the best CRM for your needs.
What is CRM?
CRM stands for customer relationship management software and is a platform software businesses use to close more deals and build better relationships with customers, leads, and other contacts. Understanding the CRM basics is the first step to improving your customer relations.
CRM systems enable businesses to:
Collect, store, manage, and analyze contact information
Track customer interactions and sales processes
Automate elements of their sales process and outreach
Visualize their sales and customer data through reporting
And more
What does this mean for you? Understanding how CRMs work enables you to better understand and manage your relationships with prospects, leads, and customers so you can grow revenue more efficiently.
CRM isn’t simply an address book. It empowers your team to build relationships more effectively and provide the best customer experience from evaluation to purchase. Customer data is the building block of CRM systems. Sales, marketing, and customer service teams, among others, find many CRM uses for features such as:
Contact management: CRM software stores and organizes customer contact information. This includes categorizing and segmenting contacts, as well as tracking their interactions with the business. Contact management is a core function of CRMs.
Pipeline management: CRMs help sales teams define their sales processes and pipelines. With all of your pipeline information in one place in your CRM, your sales team always knows what the next step in the sales process is and where each lead is in the pipeline at any given time.
Sales automation: Sales teams use CRMs to automate aspects of their sales processes. This way, CRMs help sales teams become more efficient and enable them to spend more time on the most impactful activities. CRMs can automate tasks such as assigning leads to sales representatives, moving leads through pipelines, sending emails, and reporting results.
Customer service and support: Customer service and support is a key function of CRM software. CRMs help customer support teams keep track of customer requests and interactions, automate aspects of their processes, and analyze customer service data. This creates a more organized and efficient customer service and support experience.
Analytics and reporting: CRM software offers analytics and reporting capabilities that allow businesses to monitor sales, support, and marketing performance, customize reports to understand the client lifecycle better, and visualize their data. Advanced analytics and reporting can help businesses better engage customers and allocate resources to improve ROI through their CRM software.
Integrations with other tools: CRMs offer integrations with other tools such as martech, accounting software, ecommerce systems, communication tools, and data storage or customer management systems. Integrations make CRMs even more useful and help you to keep your data consistent across all of your tools.
Channel attribution: Bonus points if your CRM has channel attribution (like Nutshell). Channel attribution helps you understand which of your marketing efforts are driving the best leads and the most closed deals. With this data, you can make better decisions on how to allocate your marketing budget.
Meeting scheduling: Some CRMs, including Nutshell, include tools that help streamline scheduling meetings with leads and customers. With Nutshell’s Scheduler tool, you can send meeting invitations from within your CRM and automatically collect attendee information.
Sales, marketing, customer support, and other teams can use CRM to improve their customer relationships, close more deals, and drive more revenue. In the past, only the largest companies could afford CRM software, which was complicated to learn and implement. Today, businesses of all sizes can access easy-to-use, affordable CRM software options.
There are many different types of CRM software with unique capabilities, including operational, collaborative, and analytic CRMs. CRM software is a valuable tool that can vary in complexity based on the needs of your business or industry.
Both simple CRMs and professional CRMs support companies in managing their customer interactions and improving relationships, growing sales, and automating processes and workflows. Understanding how CRM works for your business can help you choose the right one.
Below are a few different CRM types:
Operational CRM systems
Operational CRMs automate and streamline day-to-day operations or business processes. The ability to streamline sales, marketing, and customer service processes makes operational CRMs highly functional for businesses. Operational CRM systems manage contact or customer data, sales pipelines, interactions with your business, and other key process-driven information.
By collecting customer and process data, operational CRM software can track the sales pipeline, support lead management, and automate sales, marketing, and customer service tasks. Automated operations and process workflows through an operational customer relationship software allow staff to focus on less repetitive tasks in their day-to-day work.
Key functionality to look for in an operational CRM:
Contact management
Sales management
Marketing automation
Service and support tools
Collaboration tools
Workflow management
Customization options
Integration with other software
Analytics and reporting
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Better-defined processes for sales, support, and more
Increased efficiency through automation
Analytical CRM systems
Analytical CRMs focus primarily on gaining insights into customer behavior and preferences through data collection and analysis. Analytical CRMs commonly incorporate reporting and analytics technology such as predictive analytics and data mining.
Through advanced reporting and visualization tools, analytical CRMs allow businesses to better understand their customers’ behavior and lifetime value. Analytical CRM systems provide valuable business intelligence through lead scoring and revenue forecasting, among other data analytics processes.
Ultimately, analytical CRMs enable you to manage your customer relationships and KPIs through the storage and analysis of data.
Key functionality to look for in an analytical CRM:
Sales forecasting
Pipeline management
Marketing automation
Integration with data analytics tools
Lead scoring and prioritization
Customization options
Why businesses benefit from analytical CRMs:
Improved decision-making
Better forecasting
More effective customer engagement
Nutshell includes tools for sales performance reporting, lead volume monitoring, sales forecasting, and more. Explore Nutshell’s reporting features.
Collaborative CRM systems
Collaborative CRMs facilitate communication between key team members, such as sales reps, marketers, C-level executives, and anyone else involved in the growth of a business.
Through real-time data, valuable customer insights, and process information, collaborative customer relationship software helps team members in various departments stay on the same page.
Collaborative CRM software often includes shared calendars, task lists, customer communication logs, 360-degree customer data, and document libraries. Integrations with productivity tools are a key aspect of collaborative CRM systems.
Key functionality to look for in a collaborative CRM:
Contact management
Collaboration and communication tools (team messaging, calendars, task managers, document sharing)
Strategic CRMs: Strategic CRMs are used to develop and execute long-term customer relationship management strategies. They can be used to track long-term customer value, customer retention, customer loyalty, and customer lifetime value. Strategic CRM software can segment customers based on these attributes and track the cost of acquiring new customers.
Cloud-based CRMs: Cloud-based CRMs are hosted on remote servers and accessed through the internet. Cloud-based CRMs may include the functionalities of collaborative, operational, and analytical CRMs. Businesses use cloud-based CRMs to access their information from anywhere without having software installed on a specific computer. Most modern CRMs are cloud-based, though some specialty CRMs may require downloaded software. For most businesses, a cloud-based CRM is essential to the operation of their campaigns and business strategy.
Social CRMs: Social CRM systems are specifically designed to integrate with social media channels. Social CRMs gather data from social media platforms and integrate it with data about customer interactions on other channels. These CRMs also make it easier for businesses to communicate with customers through social media.
Mobile CRMs: Mobile CRMs take the key functionality of the various customer relationship management software types and provide it through a mobile application. Mobile apps make CRMs a more practical solution for most small businesses. Most modern CRMs offer a mobile app.
AI-powered CRMs: As artificial intelligence technologies become more widely available, CRMs are beginning to integrate AI into their functionality. With AI, CRM users can automate more elements of the sales process, quickly find the data they’re looking for, and generate insights into their relationships and campaigns. Explore Nutshell’s AI capabilities.
Looking for a CRM with artificial intelligence to power growth?
Nutshell Business has what you’re looking for, with features to supercharge your team’s productivity.
CRM software allows businesses to manage, analyze and leverage their interactions with customers or potential customers. CRMs integrate your customer data into a centralized platform which allows sales teams to manage, analyze and predict the behavior of potential clients.
The storage of key customer data gives CRM users insight into their sales pipelines and customer behavior. CRM software is essential for businesses looking to manage customer interactions and relationships.
Without a CRM, businesses are in the dark about how their customers engage with their sales team, marketing campaigns, and customer support teams. When businesses don’t understand their customers, they struggle to compete.
What does a CRM system do?
When your business first started, tracking customers by email, address books and spreadsheets made sense.
But now your company is growing—and more growth means more opportunity to change how you run your business. Right now:
Spreadsheets are hard to update, interpret, and keep in sync with your team.
Valuable customer information hides in your employees’ inboxes.
Notes get lost or thrown away.
Customer communication is inconsistent between your employees.
The real problem is that your most important data is spread across multiple systems and people, making it difficult to leverage your information and collaborate on sales.
This is where CRM comes into play.
We were running on spreadsheets and that was becoming unsustainable.
Adam K. Founder & CEO
The benefits of using a CRM for sales
There are numerous benefits to using a CRM for your business. Here are the main ways CRM software gives your team an advantage.
1. Consolidate all your data into one easy-to-access location
CRM software centralizes your customer data so that everyone at your company can access all the information they need from one platform.
Contact information
Look up customer email addresses, phone numbers, mailing addresses, websites, and social media accounts.
Communication history
Track all interactions through email, phone calls, online chats, and customer support tickets.
Customer history
Reference the length of customer relationships, purchasing history, and how customers find your business.
2. Sell more, faster
Having to do manual data entry is one of the biggest productivity-killers for sales reps. CRM automates many of these repetitive admin tasks, so your team can spend less time typing and more time selling.
CRM also helps you build a standardized sales process, which gives your team a step-by-step roadmap for closing deals and helps to reduce the length of your sales cycles.
With a sales process, you can…
Constantly improve your sales methods.
Sales processes provide the data you need to identify the root cause of stalled deals, take steps to address the problems, and ensure that your team focuses its efforts on the activities that generate the most revenue.
Accurately predict your sales
Having a more accurate sense of your win rate allows sales managers to dependably forecast how many sales their team will close from a given number of leads and set realistic revenue goals.
Get new hires up to speed quickly
A standardized sales process makes training sales reps fast, simple, and nearly foolproof, by showing salespeople what they need to do at every stage of the sale. Even rookie sellers can make an immediate impact once they learn the CRM basics in your sales process.
Provide a better customer experience
When a sales rep rushes a prospect into a sales stage they’re not anticipating, it can kill the deal and damage the relationship with the buyer. A sales process ensures that sellers don’t advance the sale until the buyer is ready to move forward.
We have built an amazing sales process in Nutshell that has led to us having around a 30% close rate for all our leads.
Matthew W. Product Manager
3. Stay focused on your customers
By having access to information on customer interest and behavior, your sales reps can pursue the right opportunities at the right time, or collaborate with your marketing team to deliver targeted and useful content to your prospects. Selling becomes a more personalized experience that’s focused on the customer.
CRM data also helps you anticipate your customer’s needs before they reach out to you, and your support team can keep your customers happy by solving their problems as soon as they arise.
Any team within your organization that interacts with customers can greatly benefit from using CRM, including your sales, marketing, support, and management teams.
CRM helps sales
Sell smarter
CRM software allows sales reps to manage their deals and conduct all their sales communications from one central location. By integrating your CRM with your organization’s business tools—including email, calendar, and marketing automation software—your sellers don’t have to waste time and effort switching back and forth between programs.
CRM software also provides full insight into the status of every deal in progress, and helps sales managers coach their team, establish quotas, and track individual sales rep performance.
Never drop the ball
With a CRM, you can automate reminders for your team to reach out to leads at the right time so that potential customers are never lost. Seeing the upcoming actions for every deal removes the guesswork and stress from a sales rep’s day.
Stay in the loop
Modern cloud-based CRM platforms can be accessed from any device, which means your deals aren’t all stuck in the office. With mobile CRM access and smartphone notifications, salespeople won’t miss anything important, whether they’re on a plane, at a client site, or walking into a meeting.
Invest in what’s working, and stop what’s not
Instead of guessing, a sales manager can track the reasons for why deals are won or lost. By analyzing their CRM’s customer data patterns and sales reports, sales managers can determine which methods are effective and which need to be improved.
CRM helps you track how prospects find your business—through online searches, trade shows, or specific marketing campaigns—so that you can determine where you’re getting the biggest return on your marketing investment.
By having access to your company’s sales interactions, your marketing team can better understand your prospects’ concerns and commonly asked questions, and use this information to create more relevant content.
Keep customers engaged
CRMs capture a wealth of valuable data that your marketing team can use to nurture prospects into customers and customers into advocates.
Modern CRMs also integrate with numerous marketing tools so that marketers can create effective email nurturing campaigns, landing pages, forms, and advertisements to keep prospects moving steadily through the funnel.
Knowing the history of previous conversations with each customer enables your support team to deliver excellent customer service every time. By providing access to detailed customer notes and interactions, CRM lets your support team see the person behind each ticket.
Solve customer issues faster
Faster response times to support requests means a more enjoyable and satisfying customer experience. In order for that to happen, customer data needs to be a click away.
CRM links important customer information—including products purchased, customer history, and previous interactions—to each support ticket so that you can solve your customers’ issues quickly and more effectively.
Consolidate all customer communications
In addition to logging email conversations and phone calls, CRM can be integrated with online chat tools so that all support-related customer chats are saved in your CRM. Your support team can review these saved chats in the future, or send saved chat summaries to customers after completing service requests.
Having access to data on sales opportunities, trends, and forecasts is critically important to crafting your company’s immediate and long-term action plans.
Business leaders can use CRM data to identify which markets and products are the most profitable, and evaluate how to adjust strategy in order to reach their goals.
Optimize team performance
CRMs keep business leaders up to date on the health of their business, and whether each team is on track to reaching department goals.
Real-time sales reports can help company leadership identify inefficiencies in the sales process, the return on investment for marketing campaigns, and if any customers aren’t receiving proper support.
Companies often begin their CRM search when their sales communications start to get messy—and by then, they’ve already lost opportunities and revenue due to disorganization.
To ensure that you’ll get the most value out of your CRM investment, ask yourself the following five questions before committing.
1. Do I have a sales process?
CRM is designed to complement your current sales practices. If your company doesn’t already have a standardized customer management system for converting leads into customers, take some time to think about how your sales team generates leads and what activities your reps complete to close them. Then, outline a step-by-step sales process for your team to follow.
2. Do I know what I want to solve?
What customer-facing problems need improvement at your company? Do you struggle with sales growth, customer retention, upselling, or customer satisfaction?
Define the issues you experience when interacting with your customers. That way, you can concentrate your efforts immediately on creating solutions after migrating your company’s systems onto the CRM.
With Nutshell, we have been able to better track our contacts, emails, and quotes, and save our employees hours of repetitive data entry!
Clinton A. COO
3. Do I have complete buy-in?
Low user adoption is often cited as the main reason for failed CRM initiatives, so getting your entire team on board is absolutely crucial. Company leadership needs to commit to transitioning business data onto the CRM, and sales reps and team leaders need to commit to using it consistently and regularly.
To achieve complete buy-in, demonstrate exactly how the CRM will bring value to each position at your company, and make sure to involve your sales team in the decision process; if your salespeople don’t enjoy the way the CRM looks and feels, they’re not going to use it.
I like that every member of my team can access the same information rather than having multiple databases in internal email contact lists.
Katie P. Marketing Communications Specialist
4. How many customers do I manage?
The number of customers you currently manage is a key factor to consider when deciding whether to invest in CRM software. As your customer base expands, tracking interactions and opportunities manually becomes more difficult, increasing the risk of missed sales and declining customer satisfaction. A CRM system helps you streamline communication, manage relationships effectively, and personalize interactions, regardless of whether your customer base is small or large.
5. What is my growth trajectory?
Every company aims to grow and increase revenue, which often involves expanding its customer base. Preparing for future growth with a CRM not only saves time and resources but also helps you maintain strong, professional, and personalized relationships as your business scales. A CRM ensures that your growth is seamless and well-managed, allowing you to focus on building lasting customer connections.
For small business sales teams, some CRM benefits are nice to have and others are absolutely essential. These eight items should be non-negotiable when researching CRM software solutions.
1. Can it track all team and customer communication?
Interactions with your customers can span email conversations, phone calls, and online chats. Your CRM should be able to capture and centralize all communications in one location so that you know the next action to take and never lose important details.
The best CRMs make it simple to enter customer data, follow customer interactions across teams, and find the information you need quickly. Pro tip: Before you choose a CRM, confirm that it can import communication history from the contact management tools you currently use (i.e., spreadsheets or a previous CRM).
2. How easy is it for your employees to use?
Sales reps aren’t software experts, so your CRM should be as user-friendly as possible. The best CRM out there is the CRM your team will actually use. Ideally, the design and interface should be intuitive enough so that everyone at your company can learn the system quickly and start using it right away.
Which CRM has the features you need?
Our interactive worksheet compares the benefits offered by Nutshell, your existing contact management solution, and any other CRMs you’re currently evaluating.
Your CRM software should be accessible and provide a user-friendly experience from all devices including mobile phones, so that you can connect to your deals wherever you are.
4. How well does it adapt to your current sales process?
Implementing a CRM doesn’t mean changing the way you sell. A CRM platform should easily mold to your current practices while adding time-saving automation tools and customization to help you sell more efficiently.
5. Can it import your existing customer data?
No one starts from scratch. Be sure that the CRM you’re considering makes it easy to import existing customer information so you don’t have to spend weeks manually typing in your current leads, prospects, and clients.
I didn’t have any clue what “CRM” was, and many of the programs I was looking at required a business background to decode the user manual. Nutshell was intuitive. Knowing how to use my iPhone and Facebook seemed to be the only background I needed to get started!
Take a close look at how the CRM pulls customer data for its reports. What insights can it draw from your customer behavior, interactions, and team activity? Can the reports be exported and shared? How easy is it to customize the CRM’s reporting to find the information that’s most important to your team?
7. Does it integrate with the tools your business uses?
Your CRM platform should allow you to manage all of your sales activities and customer data from one place. By choosing a CRM that easily integrates with your email, online chat, and document sharing programs, you’ll no longer have to spend your day switching back and forth between applications and browser tabs.
8. Can I really afford this?
Per-user prices can be misleading. For many CRMs, those low monthly costs don’t reflect all the hidden charges that you might be stuck with along the way.
Are there required fees for onboarding and training? Do you have to pay extra for additional contacts or reporting ability? Are there overage charges for data storage? All of these extra costs can blow up your annual CRM spend, so make sure you do your research in advance.
A major selling point for us was Nutshell’s integrations. About 70% of our communication is done through Google Mail, so as you can imagine, a seamless integration between our email and our CRM was absolutely critical.
Stephen S. VP of Marketing
9. How customizable is it?
Every company has its own unique needs and goals, which is why it’s crucial to choose a CRM that aligns with them. A CRM should offer customizable options to adapt to your specific business processes and workflows. A one-size-fits-all solution may not be suitable for your business and could hinder your growth.
With a customizable CRM, you can tailor key features such as pipelines, data fields, reports, and workflows to match your operations, ensuring the system works seamlessly for your business.
10. Trial period or demo
The best way to choose which CRM would work for your business, is to give it a try. Many CRM softwares provide a trial trial or demo session. A free trial allows you to explore the platform’s features and usability without having to commit beforehand. You can also identify how well the CRM integrates with your current tools.
A demo session also provides you with the opportunity to ask questions you might have and gain a better understanding of the CRM ensuring you make an informed decision. You will quickly be able to determine whether the CRM truly has what you are looking for and whether it’s a CRM that will work for your business and your team.
As a review of the most common questions about CRMs, check out these FAQs:
What is a CRM system?
A CRM system is a tool designed to streamline and optimize how you manage interactions with your customers. It centralizes customer data, allowing you to track leads, nurture relationships, and improve customer satisfaction.
What are the benefits of a CRM?
The benefits of a CRM business system are multifaceted. By implementing a CRM system, you can expect improved customer relationships, enhanced communication, and streamlined processes. These systems facilitate personalized interactions, better sales management, and increased productivity. Furthermore, they provide insightful analytics for smarter decision-making and a significant boost to your bottom line.
How much does a CRM cost?
CRM costs can vary significantly based on factors such as the features, scale, and the provider you choose. While prices differ, there are options to fit various budgets, from scalable plans for small businesses to enterprise-level CRM software solutions. CRM pricing is typically based on the number of users and calculated on a monthly or annual basis.
What are the common challenges in CRM adoption?
To maximize the benefits of your CRM, it’s essential to understand the common challenges businesses face. A lack of proper training can result in ineffective CRM use and low adoption rates. Additionally, your team may resist new software due to comfort with existing processes. Overly complex systems can also overwhelm employees, compromise data accuracy, and hinder productivity.
What’s next?
Now that you know how CRM brings value to your business, what to consider when evaluating different CRMs, and if your business is ready to adopt one, it’s time to start evaluating your options and learn if Nutshell is a good fit.
Try Nutshell free for 14 days, or use our contact form to reach one of our CRM experts. We’ll be happy to answer any questions about how Nutshell could drive the growth of your business.
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