What is CRM software? Everything you need to know

What is CRM software?

Everything you need to know

Remember these?

Illustration of a rolodex

The Rolodex was the original CRM system.

information symbol

What does CRM stand for?

Customer relationship management.

If you’ve never seen a Rolodex before, the idea is simple—you put people’s business cards or contact information in a rotating file. When you need to get in touch with someone, you look them up. It was a simple way to store personal contacts.

But customer relationship management tools have come a long way. Today, CRM software can turn your business productivity up to 11.

CRM systems store lots of information and help your marketing, sales, and other teams access it. They make communication, automation, team management, and other tasks more efficient.

That means two things:

Your team is more productive, and you provide a better customer experience.

And that ultimately means more revenue for you.

But we’re getting ahead of ourselves. Let’s talk about CRM, and then we’ll get into the benefits of CRM software.

What is customer relationship management?

CRM is a process.

Think about all the touchpoints a customer has with your business. They see your marketing first, and then get in touch with sales. You might have an implementation team. Then come customer success, account management, customer support, and so on.

That’s a lot of contact with a lot of different people.

CRM, in a nutshell, is the process of keeping track of all that contact. And making it as effective as possible.

An effective CRM process means any employee talking with the customer has all the information they need. That might include things like purchase history, current implementation status, previous communications, and so on.

It also ensures that the customer talks to the right employee without having to be passed around the phone system. And it can mean more efficient invoicing, omnichannel communication, and meeting scheduling, depending on your business needs.

So what’s the point of all that? What is CRM used for?

In the end, it comes down to creating a better communication experience for prospects, leads, and customers. And when customer experience is set to become the #1 differentiator of companies, that’s a big deal.

Now that you have an idea of what CRM is, let’s get down to what we’re here to talk about.

What is CRM software? A basic overview

Customer relationship management software is a tool for making CRM happen. You can think of it like a modern Rolodex. But exponentially more powerful.

It’s a single app that helps you manage your customer relationships. And it makes every part of the process easier and more efficient.

(Note: from here on out, we’ll use “CRM software” and “CRM” interchangeably.)

Here are a few of the things that a CRM can do for you:

  • Maintain a database of your customers (with updated information)
  • Keep track of every interaction you have with each customer
  • Make it easier to email, call, and text your customers
  • Automate communication and follow-ups
  • Manage employees’ tasks and project
  • Create detailed reports on your CRM process
  • Integrate with the other software you use to run your business

There’s more, too. But don’t think that CRMs are huge, unwieldy pieces of software that require enterprise-level tech support and knowledge to run. The best CRMs are simple, and they’re easy to learn.

Here’s an example of how your company might use CRM software over the course of a client lifecycle:

  • Icon of a contact database
    A customer is automatically added to your contact database when they download a lead magnet
  • Envelope icon
    Your CRM sends an automated series of emails to nurture the lead
  • Missed call icon
    Your sales team uses the CRM software to place a call, but the lead doesn’t answer
  • Reminder icon
    The software delivers an automated reminder a few days later to make sure your inside sales rep doesn’t forget to follow up
  • Shopping cart icon
    The customer decides to buy, and their status is updated in the CRM
  • Manager icon
    An account manager is automatically assigned
  • Speech bubbles icon
    Your implementation team reaches out to the customer to see if they need help setting up your product or service
  • Calendar icon
    The CRM software checks the account manager’s calendar and automatically sets up a welcome call
  • Question mark icon
    The customer submits a request for technical support a few months later, and your support agents see exactly what product the customer has and a full list of the features they use
  • Bolt icon
    Future requests to support deliver this information automatically, so your support agents deal with the requests faster
  • Envelope icon
    Automated check-in emails are sent from the account manager’s email address on a regular basis
  • Reminder icon
    After a specified amount of time, the account manager is reminded to start up- and cross-selling
  • Email icon
    If the customer doesn’t repurchase or resubscribe, the account manager is notified and a re-engagement series of emails is automatically sent
  • Folder icon
    This entire process is documented and included in automated reports to the sales team manager

All of this can be handled by your CRM. And if there are items where you need another piece of software (like a tech support package or customer success monitoring system), the CRM can integrate with it and pull in the relevant information.

Notice how many times you saw “automatically” in that list. It’s a lot.

That kind of automation saves a ton of time. It could easily be in the hundreds of hours over the course of a year. That’s money you’re saving.

Let’s take a look at a real-world example of time-saving automation. Foursquare had a team of reps making 100–150 calls a day using Salesforce. Every time they called a prospect that didn’t pick up, they had to click 16 times to log the activity.

After switching to Close.io, the same process could be accomplished in two clicks. That team saved up to 14 clicks per call (and with our new predictive dialer, they can now do it in a single click).

That means automation saved that company up to 14 clicks per call. And with each caller making up to 150 calls every day, that means reps were clicking up to 2,100 times less. That’s a lot of time saved—and that means more time spent interacting with customers.

This is just one example of how a good CRM minimizes administrative busywork.

And we didn’t even scratch the surface of the power of automation. Modern marketing and sales automation tools can change how you do business.

Now let’s take a look at some of the specific benefits of CRM software and see how it can help your business.

Intelligent contact management to slice and dice your database

Whether your contact database contains 100 prospects or 100,000, you need to keep them organized. Early contact management software was like a giant electronic Rolodex.

But modern tools do much more. Entries are no longer just names and job titles. Here are a few things you’ll see in CRM contact entries:

  • Pipeline stage
  • Communication preferences
  • Potential value of the sale
  • Communication history (including call recordings, email transcripts, and notes from other team members)
  • Lead score or freshness (we’ll talk about lead scoring in a moment)
  • Team member assignments
  • Social accounts
  • Open tasks related to this lead

Contact entries can store any information you like. Custom fields, APIs, and other methods of tweaking your CRM mean your contact entries will fit your company’s needs.

But how do you keep all of that information organized?

Modern CRM systems are masters of organizational wizardry. You can use complex searches, saved views, smart categories, and effective search functions to find any group of contacts you want.

And much of that can be automated. We’ll talk more about automation later on, but it’s worth noting here. You can have your CRM software assign lead scores to contacts based on things like company size, industry, lead source, number of contacts, potential sale value, and more.

This lets you focus on selling to your best leads without having to sift through a pile of information to figure out who that is.

The power in your CRM database helps you see and manage your funnel. Or your flywheel. Or whichever metaphor you’re currently using.

You can literally see it—funnel visualization gives you a quick overview of your pipeline.

These functions let you dive into your funnel to monitor and optimize it, turning leads into prospects into customers more efficiently.

We’ll talk about task management and productivity in more detail later on, but that’s what all of this is building up to. Your contacts stay organized and your sales team knows exactly what the next step is for each prospect.

CRM software helps with that next step, too:

Communication tools help sales reps reach more leads faster

Marketing and salespeople spend a lot of time communicating with customers. CRM software makes it easier by providing the ability to email, call, and text directly from the app.

No more switching back and forth between your contacts list and your email client. Or dialing a phone.

These might seem like small things, but the time saved adds up quickly. Especially when you add features like email templates, bulk messaging, and automatic dialing.

Some CRM clients, like Close.io, let you send thousands of personalized emails with a few clicks. Whether you’re cold emailing sales leads or sending updates to your list, you’ll save hours.

(Want to find out how to write better cold emails? Try these 5 effective cold email templates.)

There are even more advanced features like predictive dialing, which minimizes the time your sales reps spend listening to phones ring. (One of our customers saw a 60% increase in outbound call volume after adopting our Power Dialer.)

And real-time email tracking lets you customize your communication schedule based on what your contacts have actually read.

It’s a game-changer.

No matter how you contact your leads, your CRM system keeps a detailed record. Every touchpoint is recorded. So when a sales rep hands off a lead, you don’t have to annoy that lead by asking all the same questions.

That’s true whether you send an email or make a call directly from your CRM, from your web-based email account, a desktop app, or your mobile phone.

When you add automation into the mix, you start to really see the power of CRM software:

Automation functions cut down on 80% of salespeople’s tasks

A 2017 study found that sales reps only spend 34% of their time actually selling. That’s an astonishingly low number. Can you imagine if your developers only spent a third of their time developing?

What were these reps doing with the rest of their time? They spent 17% of their time on data entry, 12% on scheduling meetings, 21% on writing emails, and a bunch of other tasks, including internal meetings and check-ins.

Your salespeople should be selling. By automating 80% of what your salespeople spend their time on, you can help them get back to doing what they do best.

Good CRM tools include lots of automation functions. Marketing automation is one of the most effective for increasing productivity and efficiency.

Here are some ways that people use marketing automation build into CRMs:

  • Sending a welcome series of emails to new leads
  • Automatically qualifying leads
  • Lead nurturing campaigns
  • Following up with lapsed customers
  • Behavioral and abandoned-cart emails
  • Segmenting leads based on their responses to marketing
  • Scheduling sales calls and meetings

And that’s just on the marketing side.

Your CRM can automatically dial calls for salespeople, update your contact database with new information, generate and deliver custom content, and deliver notifications to the right people.

It’s like having a whole pack of administrative assistants making your life easier.

And I haven’t even mentioned more complicated workflows. When you integrate your CRM with customer support applications, SaaS tools, accounting software, and whatever else you use, it starts to feel like your business runs itself.

From an administrative standpoint, you’re not far off. You’ll be amazed at how much time you have when you start digging into automation. It will absolutely change every part of your business.

You won’t be able to completely remove the time salespeople spend on administrative tasks. But you’ll make a serious dent.

That goes a long way toward improving your marketing and sales efficiency. But you can give it an even bigger boost with project and task management:

Efficient task management to improve productivity

Sales reps have a lot of things to keep track of. And CRM software can help with that. Reps have individual dashboards that help them see things like

  • which contacts they need to follow up with,
  • new messages from prospects,
  • potential leads and prospecting information,
  • related tasks assigned to them, and
  • information on their own performance.

All of these pieces of information help sales reps do their jobs more efficiently. The less time they need to spend figuring out what to do, the more time they can spend doing.

And with automation, those tasks can be created automatically, saving even more time.

Your CRM can completely replace your current task management system. When you can use one app, why use two? And you won’t miss out on any features. Task organization, scheduling, sharing, and time tracking help reps stay focused and get more done.

Want to take it to the next level? You can with team management:

Team management to help your company get more done

So far we’ve talked mostly about CRM software in relation to ground-level sales and marketing teams. But CRMs’ usefulness goes way beyond that, too. Let’s take a look at what this software does for managers.

Remember when I mentioned assigning team members and tasks to specific contacts? Managers get a high-level view of that.

They can assign tasks, see which sales reps are making progress, and get stats on things like the fastest callers, the most frequent emailers, and the most sales. Some CRMs have features like workload planning, Gantt charting, Kanban boards, and other methods of project and task visualization, too.

All of this information is presented in customizable dashboards and automated reports. Once these reports are in place, managers get automatic updates on a predetermined schedule.

Now, instead of following up with sales reps individually, managers get a succinct overview of the entire sales operation. They can address small issues before they become big problems. And spend more time helping, instead of just checking in.

Managing, communicating with, and monitoring your team becomes effortless with a good CRM.

When you combine it with other tools, it gets even better:

Integrations for the apps you already use

Most modern companies are awash in tools. You probably have communication tools like Slack, development tools like JIRA, support tools like Intercom, project management tools like Trello, email tools like Mailchimp, and so on.

Customer relationship management systems unify those pieces of software. For example, if you’re doing custom development for a customer that you’re tracking in JIRA, you can get updates in your CRM system.

That way, when a customer asks a sales rep about the status of their development, they don’t have to track down a developer. That’s a high level of service, and makes for a positive customer experience.

Or you can use your already-existing automations set up in your email provider instead of creating all new workflows for marketing automation. Tasks can update your project management software. Updates can go out to Slack for faster notifications.

And with apps like Zapier, you can create integrations with almost anything. Even better, if you have a technical resource on your team, a CRM with a flexible API can literally allow you to do almost everything that you can do natively in the app. No matter what you use, your CRM can help you use it better.

Software options that work for your business

Want a cloud-based CRM? Or one that you run on your own servers? One that integrates directly into Gmail? A free CRM? An open-source CRM?

You can have any of those. There are types of CRM that fit every budget and any set of requirements that you have.

Some are simple and live right in your Gmail account—these are great CRMs for small business. Others give you everything you could want for everyone on your team, plus a host of marketing and support features. They scale all the way up to enterprise level.

Choosing the best CRM software for your company comes down to your needs. There’s no one-size-fits-all solution. But there’s definitely one that fits your company.

CRM software helps your team drive sales

The advantages of CRM software extend beyond customer-facing support roles. From marketing to sales to support and beyond, they help your team be more productive.

But they really shine in inside sales. Managing and communicating with contacts, eliminating the hassle of daily administration, assigning tasks and projects, and automated reporting for managers all help your sales team run more smoothly.

And when things are running smoothly, your reps provide a better customer experience.

More productivity and a better customer experience mean more revenue. That’s the advantage of a CRM.

So we come back to our original question: what is CRM software? It’s your key to running a more efficient, more profitable business.

If you’ve never used CRM software, it’s time to give it a try.

You can try Close.io free for two weeks (you don’t even need to enter your credit card info). It won’t take you two weeks to see just how awesome it is, though. You’ll be selling more in no time.