What is CRM? (Customer Relationship Management)

If you don’t know what CRM is, you’re about to discover one of the most valuable tools for communicating with customers. It’s like having a supercharged notepad that keeps records of customer interactions at your business.

Without a CRM, you still have ways of communicating with customers, but they’re likely scattered, and you might have to jump from channel to channel to respond to each message. You’re doing extra work, while a CRM system can streamline this process for you.

As someone who worked for a major CRM provider, I saw how it enhanced communications and saved businesses of all sizes significant amounts of time. In this post, I’ll share the secrets to adding a CRM to your business, including how they work and why you need one for your small business.

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Customer relationship management is different from a CRM system. While a CRM system can help you communicate with customers, relationship management is the work you put into that communication.

What is CRM?

Customer relationship management is the process of nurturing relationships with customers. It’s the communication – both in-person and online – that you have with each person at your business.

Now, here’s where software comes into play. CRM software helps you manage customer relationships so you can personalize experiences as your business grows and develops. It’s like a digital contact book that records customer interactions.

Here’s an example of what a CRM looks like:

When someone interacts with your business, that event is tracked under the customer’s profile. As you record more interactions, these profiles become more diverse and valuable for your business. You can then use this information to personalize communication with each person and create a better customer experience. Not only does this lead to happier customers, but it also increases sales without adding tasks to your existing workflow.

That’s not to say a CRM is a “set-it-and-forget-it” tool. You’ll need to integrate your software with communication channels and keep information updated over time to get the most out of your software.

What is CRM management?

CRM management is the practice of keeping your CRM clean and up to date. It’s how you organize customer data so it’s easy to access and use over time.

If you don’t keep your CRM clean, your data will be difficult to work with and less valuable to your business. For example, contacts might not fit your business well or are duplicates of other customers. These profiles will clutter your database, and you may waste time contacting people who supplied inaccurate information or that you’ve already connected with.

To keep your CRM clean, you’ll need a CRM administrator to oversee your software. Whether that’s you, or another person at your business, this person plays a critical role in keeping data organized and up to date.

Pro Tip: This CRM cleanup guide has tips and best practices for managing a CRM.

CRM Cleanup Guide

Get your CRM data in tip-top shape — and keep it that way!

Get it now

What is a CRM administrator?

The CRM administrator oversees your CRM and ensures data is organized, clean, and useful to your business.

They also manage access to the platform and control who can see your customer profiles. If your business has multiple employees, the CRM administrator configures the software to meet everyone’s needs.

How you’ll use a CRM will depend on your role at your company. Let’s go over a few use cases in the section below.

What is a CRM used for?

Here are some ways you can use a CRM system at your small business:

• Customer Communication: A CRM is a perfect place to record customer conversations, whether via phone, email, or social media. Some systems even offer a way to communicate on these channels via a centralized inbox.
• Relationship Nurturing: As you gather more information, you can use that data to improve your relationships with customers. Or, leverage it to reconnect with them if they haven’t contacted your business in a while.
• Appointment Booking: CRMs make it easy to book appointments quickly. In fact, most systems integrate with scheduling software so that you can do this all from one place.
• Sales: CRM systems for small business owners typically have payment software built into their interface. These features make it easier to close deals, send invoices, and collect payments from customers.
• Customer Service: If someone has a bad experience with your business, you can leverage your CRM to rebuild that relationship over time. For example, you’ll have multiple ways to follow up if they stop interacting with your business and you can add notes to their contact profile so you’re ready the next time they reach out to you.
• Data Collection: CRMs are versatile and are great data collection tools. You can record website visits, social media engagements, interactions with advertisements, and more.

Here’s an example of a customer interaction tracked in a CRM. Notice how the conversation was recorded, a meeting was booked, and notes were added all in one place.

What is a CRM in marketing?

A CRM is also a powerful marketing tool. Business owners can use it to craft personalized marketing campaigns, giving their content a stronger effect on their target audience.

For example, you could create an advertising campaign based on your CRM. Information like job titles, location, and company size helps customize advertisements so they’re more relevant to your target audience.

In the example below, we’re creating an advertisement for a cleaning service. We can use information from our CRM to pick the right social channel, find a catchy image, fine-tune our messaging, and more.

Why Your Small Business Needs a CRM

One in four small businesses use a CRM, and 61% have higher customer retention rates as a result. That’s because CRMs make it easy to nurture relationships, leading to more people returning to your business — because they had a great experience with your company.

There’s plenty of data that highlights how a CRM can impact your bottom line. But, it also makes a huge difference in your day-to-day workflow – here’s how.

It saves you time.

Most CRMs provide search features that save you time when tracking down information. Rather than sifting through a cluttered inbox, you can enter a name, email, or phone number to recall a customer’s record in your database. You’ll see every interaction they’ve had with your business and avoid wasting time asking questions or going to coworkers for more information.

It organizes communication.

Have you ever missed a phone call? How about losing an email? That’s hard to do when all your communication channels are synced with your CRM.

Once a customer contacts your business, your CRM software records that conversation on their contact profile, which is convenient for you and anyone else who wants to review that information. That’s why a CRM is great for small teams — because it centralizes your customer data in one place.

It personalizes customer experiences.

Research shows that personalization can increase revenue by up to 20%. Customers want experiences that are tailored to their needs, and there’s technology that lets you do this.

CRM software is one tool that helps personalize customer experiences. As you gather more data, you can use that information to create more meaningful interactions with customers.

For example, if a customer reschedules because they’re sick, note that in your CRM. Then, ask how they’re feeling the next time they come in. It’s a small gesture that can go a long way in nurturing that relationship.

Adding a CRM to your business is easier than you may think. Most providers have onboarding services that help you transfer your data to your new system. The challenging part is leveraging that data so you can get the most out of your CRM.

How to Add a CRM to Your Business

If you’re unsure where to start, here’s how to adopt a CRM at any small business.

1. Audit your existing data.

Before picking your provider, audit all your current customer data. Note the channels you’re using to communicate with customers, how many people are contacting your business, and where. This information will help you identify the features and usage limits you’ll need for your CRM.

2. Choose the right platform.

Once you know what you are looking for, pick a provider that’s within your budget and offers the features you need. There are plenty of CRM systems out there, so take your time to find the right one for your business.

While it may be tempting to choose a free provider, remember that these tools may be limited or not provide the necessary features to transfer your data to their system. Meanwhile, paid tools may offer advanced features you won’t need to use, but end up paying for anyway.

My advice: Get a free demo. Have someone walk you through the platform and show them what you are currently using for relationship management. Yes, they will try to sell their product. But if you shop around, you’ll get a better idea of what you’re looking for in a CRM and how much help you need to set it up.

3. Upload your customer information.

Now that you’ve picked the right provider, the next part can be a bit tricky. You need to round up all your customer info and input it into your CRM.

Fortunately, most CRMs have a way to automate this process. The task usually involves creating an Excel sheet that houses all your customers’ email addresses, phone numbers, etc. Once that, you’ll upload it into your CRM and the software creates the customer records for you.

This is also why I recommend scheduling a demo. The sales rep can tell you where to look for information and how to transfer it efficiently into your new system.

4. Customize your CRM system.

Here’s where things get interesting. You should customize your CRM to fit the needs of your business — meaning, you need to set it up so it fits in with any work routines you already have in place. Your CRM shouldn’t be a pain to work with; it should make life easier for you and your customers.

Be sure to link all the ways you communicate with customers and people who have contacted your business, like email, phone, and social media. If you use any sort of tracking technology on your website, add that into your CRM system, too. In fact, there might be ways to link a number of software programs you’re already using to your CRM — most providers will offer an app marketplace that syncs information between their platform and others, so all of your data is in one place.

5. Keep your data clean.

At this point, your CRM is good to go. But as we mentioned earlier, leaving it unchecked can quickly lead to unorganized data.

Be sure to appoint a CRM administrator and review your customer info frequently to ensure it’s current. If you need a simple checklist for managing your data, you can use this free CRM cleanup guide.

Adding a CRM to Your Small Business

If you run a small business, a CRM is a game-changer for customer experience. It helps personalize customer interactions, leading to happier clients, increased sales, and higher retention rates.

If you need a CRM, bookmark the tips in this post to get started. Pick a provider that best suits your needs and customize the software so that it aligns with your company’s workflow. From there, keep your data clean and update it over time. As your customer base grows, your CRM will increase in importance as it becomes the primary storage solution for your customer data.

CRM Cleanup Guide

Get your CRM data in tip-top shape — and keep it that way!

Get it now