What Is CRM?
Author: Domeny.ForSale editorial team Published
In brief: CRM is an approach to managing customer relationships, as well as the name for systems that help you do so. CRM software stores contact details, conversation histories, proposals and tasks so that the team knows what has been agreed with a customer and what the next step should be. It is particularly useful when managing contacts through email, notes and spreadsheets starts leading to mistakes or overlooked matters.
What does CRM mean, and what information does it organise?
CRM stands for Customer Relationship Management. In its broader sense, it covers the principles of acquiring customers, managing sales and providing subsequent service. In everyday business conversations, however, “CRM” usually means a specific piece of software.
The foundation of such a system is a shared contact database. A person’s or company’s record can contain not only a phone number and email address, but also related conversations, documents, support requests and planned activities. This means that knowledge about a customer does not have to remain solely in one employee’s inbox.
A CRM can also store sales opportunities, meaning specific potential deals. One company in the database may have several such opportunities: purchasing a service, expanding a contract and ordering an additional product. Each may have a different value, deadline and person responsible.
What is CRM used for in day-to-day work?
The range of features depends on the product and the subscription plan purchased. Most commonly, a CRM supports several recurring tasks:
- Organising contacts: assigns customers to account managers and allows users to search for them using defined criteria.
- Managing sales: shows which conversations are at the needs assessment, proposal, negotiation or decision stage.
- Keeping track of deadlines: provides reminders to make a call, send documents or renew a contract.
- Recording the history of the relationship: makes it easier to check previous agreements before the next conversation.
- Reporting: helps assess the number of open matters, team performance and points where sales stall.
Some systems also handle marketing campaigns, service requests or automated actions. For example, changing a sales stage may create a task to prepare a contract. Connecting the system to email, a calendar or an online shop usually requires configuration and sometimes an additional service.
Reports are only as useful as the reliability of the data recorded. A CRM will not figure out that a customer rejected a proposal during a phone call unless someone records it or passes that information through an appropriate integration.
How does CRM work? An example of handling an enquiry
A small web design company receives an enquiry about an online shop. An employee adds the contact and creates a sales opportunity, recording the customer’s needs, the approximate project scope and the date of the next conversation. The opportunity moves to the “needs assessment” stage.
After the meeting, the employee updates the notes, attaches the proposal and changes the stage to “proposal sent”. They also add a task: “call on Thursday and ask about the decision”. If they fall ill during this time, another authorised person can take over the contact without asking the customer to explain the whole matter again.
Once the proposal is accepted, the opportunity is marked as won. Further delivery may take place in a separate project management tool, while the CRM retains the sales history and the date for a follow-up about maintaining the shop. The system organises the handover of information, but it does not replace delivering the project or having a good conversation with the customer.
When do you need a CRM, and when is a spreadsheet enough?
A spreadsheet may be enough for one person who handles a small number of straightforward matters and does not need a detailed contact history. It is easy to get started with, but as the number of customers and employees grows, keeping data up to date, tracking responsibilities and managing next steps becomes harder.
The signal to consider a CRM is not the size of the company itself, but the emergence of specific problems: two salespeople contact the same customer, proposals go unanswered, or nobody knows who is handling a particular matter. The system can also be useful for a sole trader if the sales process takes a long time and involves many conversations.
A CRM is not the same as accounting software, a project management tool or an ERP — a system covering a business’s broader resources and processes, such as inventory and purchasing. Individual products may combine these features, so you should check the actual scope of a solution rather than relying on its name alone.
How do you choose and implement your first CRM?
Start by mapping out your own process: where enquiries come from, who takes them over, what stages the conversations go through and when you consider a matter closed. Only then should you compare tools. This makes it easier to distinguish necessary features from those that merely look good during a presentation.
During the trial, work through a few representative cases using fictitious data. Check how long it takes to add a contact, set a reminder, hand a matter over to a colleague and export information. Confirm limits, per-user costs, the availability of integrations and the terms for ending the service in the official pricing information and documentation.
Before transferring the database, remove duplicates and agree on which data the team must fill in. Define access permissions too. Since a CRM usually contains personal data, you need to assess the rules for processing, retaining and protecting it, as well as the provider’s role; this is general organisational guidance, not individual legal advice.
To begin with, choose one problem to solve, such as a lack of follow-up after sending a proposal. Set up a simple process for it and check with the team whether the system actually helps them take the next steps.
See also: What Is a CDN?
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