What is CRM? What does CRM Means? Why CRM is one of the most hyped word in the industry?

A Small Business Owner

Introduction and Definition of CRM

CRM stands for “Customer Relationship Management” Software, a tool which can be used to effectively manage leads. opportunities, and customers.

Let’s start with basics and common terms being used in the industry to understand what exactly CRM means for sales and marketing:

Lead: Anybody with the potential to be qualified as a business contact will be termed as a lead.

Opportunity:Opportunity is created for leads when they are qualified for our products/services and can be moved across sales pipeline.

Customer: Leads when complete sales cycle and opportunity is won then it became customer.

Pipeline: Set of stages or process you will follow to move your opportunity to the closing stage. Stages are Appointment scheduled, Proposal sent, Won, Lost

Benefits of CRM

As per forester research, 80% of the projects go to the salesperson who contact incoming inquiry within the first 30 minutes.

Improve Contact Management

  • Add all contact related detail on one place to access anytime.
  • Place all inquiries, orders, and transactions related to a contact to segment and prioritize.
  • Timeline of the all communication (call, email, meeting)
  • Sorting and filtration based on last activity, transaction amount for the active and effective engagement.

Improve Deal Closing

  • Identification of the deal pipeline based on the stages of engagement.
  • Visualization of all active deals on the dashboard.
  • Placement and prioritization of deals based on the deal stage.
  • Sorting and filtration of all deals based on the last activity and deal amount.

Improve activity management

  • Default logging of all emails with contacts, deals, and companies.
  • Open and click tracking on emails.
  • Logging and recording of calls.
  • Logging of all conducted and upcoming meetings.
  • Option to create to-do tasks
  • Activity dashboard to be on top of your pending tasks

Automate repetitive tasks

  • Put dead leads on email sequences so they can be engaged automatically.
  • Enrichment of data with automation of tasks.
  • Automated deal creation, stage update, and closing based on defined criteria.
  • Task automation with Asana, Trello, Slack etc.

Improve reporting and forecasting

  • Set and measure KPIs and benchmarks.
  • Forecast based on the deal pipeline.
  • Collect deep insights about the customers and the team’s performance.
  • Make a data-driven decisions for the future.

Integrate various touchpoints

  • Integrate lead collection tools placed on the website.
  • Integrate email marketing and marketing automation tools.
  • Integrate sales automation tools.
  • Integrate task management, order management and project management tools.
  • Integrate with proposal automation and invoicing tools.

How CRM works?

It usually works on funnel model in which leads comes as the Top-of-the-funnel step. Sales teams are assigned with those leads who then contact them to qualify them based on the pre-defined criteria.

Qualified leads are converted into deals or opportunities and those are added into sales pipeline so due importance is given to those leads for consistent followups.

When do you need a CRM?

Ideally, it’s recommended to get it especially for B2B or high ticket B2C as soon as you start a business sso all communications and contacts can be catered from the very first stage but not all founders are ready to put time and energies into systems so in that cases, it’s recommended when:

  • 1st Sales person is added
  • Systemmatic lead generation started
  • Business model is validated and team is ready to grow

Types of CRM based on Infrastructure

On the basis of Infrastructure, we have following types of CRMs:

  1. Cloud based: The CRM hosted on the provider cloud or server. These CRM are mostly being provided on SAAS model and you don’t need to manage infrastructure for them e.g. PipeDrive, SalesForce, HubSpot
  2. On-Premise: These CRM can be hosted on your own servers and you need to manage infrastructure e.g. Odoo

Types of CRM based on focus

We can also categorize CRM based on their focus and following are the categories based on focus:

Sales CRM: CRMs build primarily for sales teams and marketing and other aspects are build on top of sales process. E.g. SalesForce, PipeDrive, Sugar CRM.

Key features in a CRM

Core features which are now considered as standard in the CRMs industry are:

  • Contact or Lead Management
  • Emails, calls, and activity logging
  • Deals or Opportunity Management in a Pipeline
  • Task Management

How to choose the best CRM for your Company?

When choosing a CRM, these factors need to be taken into consideration:

  1. Infrastructure: Either you need a CRM to be hosted on the cloud or your own company server
  2. Focus: Your needs are more aligned with sales-focused CRM or Marketing Focused CRM
  3. Core features: Identify your core needs and looking for the CRM which can meet your core needs. Important thing is to avoid adding “Wants” instead of the “Needs” else you will be left with no available option in market.
  4. Pricing: Identify the ones with suitable pricing based on your needs.
  5. Customizability: Few of CRM’s structures is developed and not customizable to much extent. They are built for the standard sales process and usually cater to the standard needs while few CRMs like NetSuite, salesforce, Odoo have greater customizable available for complex business needs.
  6. Ease of use: Most important but a much-neglected factor. The majority of the implementations fail because sales teams find it difficult to start using a system with greater complexities.

How to implement a CRM in your company?

After the identification of suitable CRM, implementation is also a tricky area as many companies fail because of the poor implementation strategy. For implementation, the most important thing is to remain focused and avoid distractions. Eye-cathing features, integrations, un-organized wants to distract the users and result in a system too complex to be used.

Another important aspect is to hire a vendor that can identify your business needs, customize the system, and help you in training with best practices from the industry so you can have a successful implementation.

How to evaluate CRM implementation

To evaluate, we need to identify the key Performance Indicators (KPIs) for business and CRM sepeately.

Common KPIs for business are:

  • Leads generated and added to CRM
  • Time is taken for the first contact made by the salesperson
  • Leads qualification ratio
  • Leads conversion into Opportunity
  • Opportunity conversion into Customer
  • Activities made by sales teams (E.g. Calls, Emails, Meetings)

For evaluation of CRM implementation. following KPIs are being used:

  1. Percentage of sales persons actively using system
  2. Percentage increase or decrease in conversion rates
  3. Percentage increase in the bottom-line

How to boost CRM performance with external tools?

After implementation and monitoring phase, one can look for the extended needs of the company. E.g.

  • SMS tools: Most CRMs don’t have SMS option but if your business needs them, you can look for available integrations.
  • Analytics: In-build reporting sometimes don’t provide the required analytics. In that case, external reporting tools can be added to cater CRM related KPIs and even other departments.
  • Integration tool: Integration tool like Zapier or Integromat can help you in boosting your CRM performance by connecting it to various other tools in the market.

Alternative to conventional CRM?

Some solopreneurs or small businesses don’t need a CRM or they can’t give time to a conventional CRM so they can take following easy routes:

GSuite based systems: CRMs build on top of GSuite so you can manage your leads and opportunities within your Gmail account.

Spreadsheet like systems: Systems like Airtable or Monday.com are not mainly CRMs but they have the available options and templates which can work for you as an easy solutions to manage customer relationship.

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What is CRM? A complete beginner's guide to CRM!
Article Name
What is CRM? A complete beginner's guide to CRM!
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What is CRM?CRM stands for "Customer Relationship Management" Software, a tool which can be used to effectively manage leads.

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