CRM Software & Systems

CRM: explained

By Rob Binns | Senior Writer | Updated: 27 July 2020

CRM means customer relationship management. In business, it’s an umbrella term, used broadly to describe how companies of all shapes and sizes manage their relationships with their customers.

What can be confusing, though, is that CRM is often used in two different contexts. 

On the one hand, it’s a strategy (or set of strategies) that a business uses to acquire and retain customers, and re-engage lapsed prospects or deals. On the other hand, a CRM system is a kind of software used by companies to manage their contacts, and coordinate their sales, marketing, and customer service efforts from a single online interface.

On this page, we’ll introduce you to what a CRM system is, and how it works. We’ll run you through the kind of teams, industries, and businesses that are powered by CRM software, and touch on how much a system of your own will cost. And, if you like what you see, there’ll be plenty of opportunities to compare providers along the way, and request tailored quotes for your business.


What is a CRM system?

First and foremost, CRM software acts as a centralised database for storing information about your customers. 

That could be anything from basic contact details and demographic info for your clients or leads, all the way to more elaborate insights – such as each customer’s purchase history, marketing preferences, and a record of how (and where) they’ve previously interacted with your business.

CRM software collates conversations from email, telephone, live chat, and social media. This, combined with the system’s ability to store files, documents, and additional resources – not to mention integrate with a wide range of third-party applications, such as email and project management software – makes it as close to an all-in-one business productivity tool as it gets.

But of course, CRM software is more than just a way to store contacts. The real value of a CRM system is what it lets you actually do with that information. 

It’s how you leverage insights and data analysis to make more sales, create targeted marketing campaigns, and respond to customer service issues with ease and professionalism.

So how does CRM work, exactly?


How does CRM work?

Most CRM systems are cloud-based. Broadly, that means that they rely on the internet to operate.

More specifically, it means that your business’ data (files, contacts, documents, the lot) is stored ‘in the cloud’, hosted on servers operated by the CRM provider, rather than on your own premises.

There’s a couple of benefits to this, including both security and convenience – who wants to have a load of expensive equipment taking up valuable office space? The main advantage of cloud-based CRM, though, is that it facilitates remote working.

With cloud-based CRM, information updates in real-time – enabling collaboration across time zones, and bringing together teams situated thousands of kilometres apart. Plus, there’s no expensive hardware to maintain or install – cloud-based CRM is accessible entirely from your web browser.

Our article on the best cloud-based CRM systems for small businesses goes into more detail about all this. You’ll also be able to compare cloud-based software with the alternative (called an on-premise solution), and make an informed decision about which one is right for your business right now.


Watch: What are the benefits of CRM?

“Investing in a CRM system has a massive effect on your profits. First of all, in terms of customer retention. Happy customers tend to invest more, and stay with you longer.”

Here’s Customer Services Manager Scott Christie of Strengthscope to tell us more.

“I wouldn’t be able to do my job without a CRM system. We would be taking between five and ten times longer doing this as a manual process.”

Could CRM benefit your business as much as it has Scott’s? Why not find out?

Simply click on one of the buttons below to answer a few questions about your business’ CRM requirements. We want to know what software you already have, what features you’re looking for, and how many of your team members the system will need to support.

We’ll then match you to a small subset of CRM suppliers that meet your needs. They’ll take it from there, and you’ll be contacted with CRM quotes tailored to your business. Get started below – the questionnaire is a breeze, and takes just 30 seconds to fill out.

Hi! Want to compare tailored quotes from top CRM suppliers?
Our form takes just 30 seconds to complete
Do you already use CRM software? YES NO

Who uses CRM?

…and how might a CRM system serve the specific needs of your teams, business size, and industry?

Teams of all functions 

Though CRM systems are necessarily complex, they can be split into three broad categories, according to the specific functions the software performs – sales, marketing, and customer service.

Different CRM providers approach the varying functions of CRM in different ways. Some suppliers (such as Zoho) package sales, marketing, and customer service features together in a single product.

Most other providers, though, separate their offerings into different modules, that you'll have to purchase separately. Freshworks CRM, for instance, has Sales Cloud for sales teams, Marketing Cloud for marketing departments, and Freshdesk for customer service agents. And, for a solution that incorporates sales, marketing, chat, and telephony, there's Freshworks CRM's Customer-for-Life Cloud.

CRM for sales teams

Designed first and foremost for sales teams, CRM software provides everything your sales team needs to better understand your customers, and where each one is in their journey with your business. 

With a drag-and-drop pipeline offering a 360-degree view of where the next deal is coming from, and lead scoring to help prioritise the right opportunities, CRM software is the way of the future. 

And speaking of the future, CRM’s sales forecasting feature is as close as you’ll come to seeing into it. Having accurate extrapolations of future sales allows you to plan ahead with greater clarity, and efficiently allocate resources to the right areas.

Read more: The Best CRM for Sales Teams in 2020

CRM for email marketing teams

What’s in it for marketing teams? Well, that depends on how you like to run your campaigns. Could you benefit from thousands of email templates at your disposal? From the ability to send those emails in bulk to a specific subset of contacts, grouped by demographic, interests, or purchase history?

Yep… marketing CRM software is a no-brainer.

Plus, once you’ve got your customer targeting in place, you can then monitor the effectiveness of all that planning and tailoring. Marketing CRM software allows you to view how many people opened your communications, and who clicked (and where). Additional investment unlocks more advanced features, more detailed insights, more daily email sends, and greater scope to grow your business.

Read more: The Best Marketing CRM Software in 2020

CRM for customer service teams

As we all know, growth isn’t just about acquiring new customers – you’ve also got to keep the ones you’ve already got.

Enter customer service CRM. As with CRM for sales and marketing, this software’s value lies in its ability to track. Whether it’s loyalty, customer interactions with your brand, or the performance of individual agents, the best service CRM puts your finger right on the pulse of your business.

Customer service CRM makes issue management a breeze, with ticket scoring capabilities that allow you to put the most pressing issues – or the highest billing customers – first. Better yet, CRM puts everything your service agent needs to know about a case or client right in front of them, before they’ve even picked up a phone – meaning your team always stays one step ahead.

Read more: The Best CRM for Customer Service in 2020


Businesses across all industries

Many CRM suppliers specialise in providing CRM solutions for specific industries. Just a few types of businesses that benefit from tailored CRM products are:

Use the links to jump straight to the section that's most relevant to your industry!

Law firms

With various cases and projects to manage, lawyers surely have some of the most demanding data requirements out there. Without CRM, how would they do their clients and representees justice?

To find out more about how legal eagles are streamlining their administrative demands (and to compare top suppliers), head to our guide to the best CRM systems for law firms.

Universities

From optimising recruitment and streamlining enrolment to nurturing relationships with both students and staff, CRM has changed the way educational institutes operate.

To learn more, check out our guide to the top CRM systems for higher education, updated for 2020.

Hedge fund managers

If there’s anything more stressful than managing a hedge fund, it’s making a dent in all the admin that comes with it. Sound familiar?

To learn more about how hedge fund managers leverage CRM software to foster better investor relations and improve client retention rates, explore our guide to the best CRM systems for hedge funds.

Restaurant owners

Amidst the hustle and bustle of menu planning, staff management, and long hours behind the bar, it can be easy to lose sight of what makes your restaurant tick – your customers!

Businesses in the hospitality industry use restaurant CRM software to perform a sumptuous buffet of functions, from running loyalty schemes, to re-engaging old customers with fresh new discounts and deals.

Accountants

Though numbers will always be an accountant’s bread and butter, it’s not figures and equations that lie at the heart of the industry – it’s people.

Whether as a simple, centralised place to store case information, a smarter way to establish client rapport, or as a system for prospecting new clients, accountants use CRM every day. 

Head to our guide to the best CRM software for accountants to view our hand-picked selections for the industry.

Nonprofits 

With donors, staff, clients, and the public to manage (and be kept happy!), charities have a lot of contacts to juggle. To find out how CRM software helps them do it, explore our page on the best CRM systems for nonprofits, rewritten for the new decade.


Businesses of all sizes

The nature of CRM software’s pricing plans and products makes it a highly scalable solution for businesses. Whether you’ve just started out, or are receiving your second or third round of investment, a CRM system will grow parallel to your ambitions.

Small businesses

The best CRM systems for small businesses don’t need to do everything – but they do need to get the basics right. Look for solid customer support, user-friendliness, and generous contact and data storage limits, and you can’t go wrong.

Did You Know?

91% of businesses with more than 11 employees use CRM software.

Medium-sized to large businesses

As your business expands, though, you’ll need something a little more heavy-duty. Here’s where you’ll want to demand 24/7 customer support, as well as more advanced analytical capabilities.

That includes sales forecasting and revenue cycle modelling, as well as email tracking and business intelligence. To do all this – and so much more to boot – you’ll want to invest in the best analytical CRM software for medium-sized to large businesses, chosen by our experts.


The world’s biggest companies

Don’t assume that the globe’s most admired and influential businesses are immune to the charm of CRM, either.

Both Amazon and Apple have built superlative CRM strategies around brand-building, customer loyalty, and creating a synergy across a plethora of products and platforms. 

With vast sets of customer data at their disposal, both Apple and Amazon have forged reputations built on providing tailored offers and recommendations for consumers… while adding to their own immense wealth, of course.

And the big brand case studies don’t stop there. The likes of Tesco, Coca-Cola, McDonald’s, BMW, Zara, and more have all leveraged CRM to gain fame and fortune, while fostering a familial fondness for their products and services. 

Put simply, CRM is what’s helped them to become the best.

Hi! Want to compare tailored quotes from top CRM suppliers?
Our form takes just 30 seconds to complete
Do you already use CRM software? YES NO

How much does CRM software cost?

CRM is typically charged on a per user, per month basis. This fee can be anywhere from as low as £10 per user, per month, to as high as £240 per user, per month.

Read more: How much does CRM software really cost in 2020?

How much your CRM system will cost depends on several factors:

  • Features: CRM providers usually offer several plans, or ‘tiers’ of pricing. Each one unlocks more advanced features, with the cheapest plans also the most functionally limited.
  • Capacity: As the prices increase, so too will the amount of contacts, files, and data your CRM system is able to store.
  • Product: While CRM for sales and service teams is the most affordable, marketing automation modules are typically at the higher end of the pricing scale. Most marketing CRM is offered at a fixed monthly rate, rather than on a per user basis. This makes it a good deal for larger teams… but not so much for small businesses.

Luckily, if you are on a more restrictive budget, there are free CRM software options available. Be warned, though – with CRM, you always get what you pay for. 

And, when you pay nothing for the software, you can expect your sparkling new free CRM to come hamstrung by a severe lack of features, poor storage capacity, and lacklustre customer support. Avoid, if you can.


How can you use CRM effectively?

To effectively use CRM to grow your business, it’s vital to understand that both strategy and software play a part – and that they’re inseparable.

To achieve your CRM goals, you’ll need a CRM system. And, to get the most out of your investment in that CRM software, you’ll need a strong awareness not only of the outcomes you’re after, but how you plan to approach them, too.

Our guide to CRM strategies should help you get started with this, while you can avoid the major pitfalls by exploring our guide to common CRM problems… and their solutions.


Get tailored quotes from leading CRM suppliers

Comparing quotes and pricing plans from a range of different CRM providers (without going mad) isn’t impossible… but it is time-consuming. Trawling the web, making notes, drowning in a sea of tabs and spreadsheets… who’s got the time, energy, or patience for that?

Rhetorical questions aside, there is an easier way to get the best deal for your business. 

Simply take 30 seconds to provide us with a few details about your business’ CRM requirements. You can do this through our quick questionnaire, in which we’ll ask things like:

  • Do you already use CRM software?
  • How many users will the software be for?
  • What do you need your software to do?
  • What contact management solution are you already using?
  • What’s your postcode?

Don’t worry – we won’t store this information for any longer than we need to in order to provide you with tailored quotes from leading CRM suppliers – including Salesforce and Maximizer – in the UK. 

Details about your exact needs will be passed on to these providers, who’ll be in touch to offer detailed quotes crafted to the specific needs of your business. It’s free, too – though you’ll have to be based in the UK to be eligible.

Rob Binns Expert Market
Rob Binns Senior Writer

Rob writes mainly about the payments industry, but also brings to the table industry-specific knowledge of CRM software, business loans, fulfilment, and invoice finance. When not exasperating his editor with bad puns, he can be found relaxing in a sunny (socially-distanced) corner, with a beer and a battered copy of Dostoevsky.

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