What Is a CRM? The Ultimate Guide

Illustration showing the 4 different points of how a CRM works

Chapter 1: What is a CRM: What it does and what it can do for your business

What is a CRM?

“CRM” is short for “customer relationship management.” The phrase can convey two related meanings:

  • A process that allows you to manage and optimize relationships with customers
  • Software used for automating the process of managing customer relationships

This guide will focus on CRM software, but to better understand what the software does, it’s important to first discuss the processes that CRM technology can automate.

CRM as a process

As a systematic process, CRMs manage all phases of your relationship with your customers. It brings together all the business functions that interact with the customer so there is one central view. These include:

  • Information management
  • Marketing
  • Sales
  • Customer service
  • Finance

CRMs manage and improve the way you:

  • Collect prospect and customer information, from the first interaction until the end of the customer life cycle.
  • Segment your customers in order to run effective marketing campaigns.
  • Use the information collected from customers to optimize your sales process.
  • Track and manage customer interactions to maximize customer satisfaction and retention.

A comprehensive approach to a CRM involves managing all these processes and more.

CRM software

CRM software automates the customer relationship management process to improve efficiency and maximize productivity. To support customer relationship management, CRM software automates the following processes:

  • Capturing, storing, analyzing and utilizing customer information to inform strategy and tactics
  • Using ideal buyer profiles to identify hot prospects
  • Tracking interactions with prospects throughout the sales cycle in order to personalize touch points and boost closing rates
  • Optimizing sales team management to make better use of talent
  • Tracking and improving customer service performance
  • Identifying dissatisfied customers at risk of churn to create opportunities for customer retention
  • Delivering relevant customer information to field service agents to improve customer experiences
Illustration showing the 4 different points of how a CRM works

What CRM software does

CRM software simplifies routine customer relationship management procedures that would be laborious, time-consuming, inefficient or expensive to perform manually. This allows your team to improve your customer relationship management performance while spending less time and money on CRM tasks. Here are some of the key tasks that CRM software automates.

Managing customer data

At one time, sales representatives stored customer contact information by hand on index cards using Rolodex (rolling index) files, invented in 1956 and introduced in 1958. With the rise of personal computers in the 1970s and 1980s, companies began storing contact information in spreadsheet formats such as Excel. Software designed specifically for CRM began to emerge in the 1990s, and soon migrated to the cloud and mobile devices.

CRM contact management software offers several advantages over spreadsheets when it comes to managing customer data:

  • Capturing, storing, analyzing and utilizing customer information to inform strategy and tactics
  • Using ideal buyer profiles to identify hot prospects
  • Tracking interactions with prospects throughout the sales cycle in order to personalize touch points and boost closing rates
  • Optimizing sales team management to make better use of talent
  • Tracking and improving customer service performance
  • Identifying dissatisfied customers at risk of churn to create opportunities for customer retention
  • Delivering relevant customer information to field service agents to improve customer experiences

These advantages have made CRM software increasingly popular as an alternative to spreadsheets for managing customer data.

Organizing marketing campaigns

When marketing teams use CRM data, it performs many useful functions for their campaigns:

  • Segments prospects and customers to help identify which demographic profiles are most likely to purchase a certain product.
  • Evaluates and ranks how closely prospects conform to ideal buyer profiles to prioritize profitable opportunities and minimize wasted efforts.
  • Allows marketers to deliver personalized content to customers based on a customer’s individual data, improving conversion rates of marketing campaigns.
  • Analyze the success of marketing efforts to replicate high-performing campaigns and avoid repeating wasteful campaigns.

Optimizing sales

CRM software has grown particularly popular as a tool for optimizing sales performance. CRM sales pipeline management tools enable sales teams to:

Improving customer service performance

Companies are increasingly using CRM tools to improve customer service performance. CRM software can help customer service teams:

  • Proactively anticipate customer needs based on historical information collected from customer interactions across multiple channels.
  • Shorten customer wait time by making customer data available to human assistants, automated IVR and chatbot assistants.
  • Identify opportunities to win back customers at risk of churn.
  • Reduce workloads on human agents by using CRM data to channel routine tickets that don't require human assistance to automated tools.
  • Provide customized assistance to customers based on their account data.
  • Improve service delivery by collecting feedback from customers and analyzing trends.
  • Provide on-site customer service representatives with insight to improve their levels of support.
Illustration showing the 4 different points of how a CRM works

How CRM software works

  1. Collection
  2. Storage
  3. Analysis
  4. Application
Illustration showing the 4 different points of how a CRM works

1. Collection

Customer data can flow into a CRM system from multiple sources, including:

  • Face-to-face conversations with customers
  • Phone calls
  • Written customer communications
  • Emails
  • Digital marketing eg. PPC
  • Online forms
  • Social media
  • Direct marketing mailing lists

The first step in the CRM process is collecting data from these sources.

Illustration showing the 4 different points of how a CRM works

2. Storage

As customer data gets collected, it gets entered and stored in your CRM program’s database. Entering data into a CRM program typically involves two types of procedures:

  • Digital files get imported into the CRM program
  • Non-digital files must first be digitized before they're imported

Typically, digital data that needs to be imported into a CRM program resides in a spreadsheet program such as Excel. Spreadsheet programs can be formatted as a comma-separated values (CSV) file. This changes the spreadsheet into a text file, using commas to separate the data fields instead of cells. This makes it easy for you to import your customer data from a spreadsheet into a CRM.

It's also possible to transfer data directly from one CRM to another using third party data migration services such as Data2CRM.

Illustration showing the 4 different points of how a CRM works

3. Analysis

Once data is stored in your CRM system, you can start to analyze it and use the information to make more informed business decisions. You can easily track key performance indicators (KPIs) for specific teams and individuals to measure their performance against specific business goals. Examples of KPIs are:

  • Marketing KPIs, such as campaign revenue, cost per lead and customer lifetime value
  • Sales KPIs, such as new leads, lead conversion rates and average revenue per sales account
  • Customer service KPIs, such as average wait time, average resolution time and first contact resolution rates

To help you visualize this type of data in a meaningful way, CRM programs automatically generate specific reports and display data in dashboards. CRM programs usually have standard report formats that summarize frequently desired data such as sales forecasts. Many CRM programs also allow you to customize sales reports so you can analyze the data that's important to your business.

Illustration showing the 4 different points of how a CRM works

4. Application

CRM reports and dashboard displays provide you with information you can put to practical use. In order to make practical use of CRM data, you need a way to distribute this information to your marketing, sales and customer service teams. Many CRM programs allow you to create personalized dashboards so every team member can view the data that's most relevant to their role. For instance, a sales manager's dashboard may display a list of 'hot leads' that are likely to convert to sales in the next 90 days, which they can use to forecast revenue and prioritize the work of their sales representatives.

Applying CRM data may also involve syncing it to another software program for practical use. For instance, integrating to email marketing platforms allows you to store and segment your data in the CRM, push this data to a mailing list in the email marketing software where you then create and send out your campaign. When there is a two way sync, the key metrics such as open and click through rates are automatically added into your CRM.

Common CRM applications

A CRM can be used to simply manage contacts or it can help manage every step of your customer journey from the minute they show an interest right through to them becoming a long term customer. Typically though, CRM software is used for the following key tasks:

  • Managing customer contact information
  • Automating lists of subscribers and followers for email and social media campaigns
  • Tracking marketing, sales and customer service interactions with customers
  • Tracking leads and sales through the pipeline
  • Managing tasks and team activity
  • Automating customer service tasks, such as triggering emails when customers become 'at risk' of leaving
  • Analyzing marketing, sales and customer service performance

Who uses a CRM?

CRM is suitable for businesses of all sizes across every industry. Managing your customer relationships well is core to business growth and relevant to all.

  • Startups use CRMs to acquire new customers and save time managing data.
  • Small businesses use CRMs to streamline their workflow, scale up their activity and improve productivity.
  • Mid-size businesses and large companies use CRMs to optimize their marketing, sales and customer service performance and maximize their revenue.

Virtually all industries use CRM software, including the cattle industry as most CRMs can be customized to help improve their workflows. But it's true to say that many industries and departments find CRMs particularly useful in the following areas:

  • Sales teams use a CRM to streamline the sales process, manage sales pipelines and optimize performance.
  • Marketers employ a CRM to segment customers, track leads and deliver customized content.
  • Senior Business Managers use their CRM for business intelligence to help inform strategic decisions.
  • Call centers leverage CRM data to reduce customer wait time and boost satisfaction.
  • Real estate agents find CRMs useful to manage contacts, matching listings to prospects and supporting sales activity.
  • Travel agencies use a CRM to store a customer's travel preferences and deliver a superior, personalized travel experience.
  • Accountants use a CRM to manage their accountancy processes, integrating with bookkeeping apps to create a complete view of their customer.
  • Construction companies and contractors organize customer and project data with their CRM.
  • Hotels and restaurants build customer loyalty by using a CRM to deliver more personalized services.

As these examples illustrate, customer relationship management software is popular in many industries, leading to a proliferation of providers and solutions. To make the most of this valuable technology, read on to learn more about essential CRM terminology you’ll need to know when comparing software options.

Illustration showing the 4 different points of how a CRM works

Chapter 2: CRM glossary: Popular terms explained

Customer relationship management software has many specialized terms and abbreviations. Knowing what these mean can help you understand software features and compare solutions to help you make the right selection. Here are some of the common CRM terms:


Account: The client or company a firm sells products or services to, there may be other records associated with that client or company.

Activities: An action or interaction an employee has with a customer for instance, a sales representative's activities may be tracked in a CRM system, such as prospecting calls or attending sales meetings.

Analytics: Statistical interpretation of CRM data performed in order to identify relationships between variables, model trends, make predictions and optimize performance.

Application programming interface (API): A computer program that allows software integration between a CRM tool and another app in order to share data and functionality.

API: See “application programming interface.”

Autoresponder: An email software service that allows you to import CRM data in order to send emails to multiple recipients simultaneously or on a predetermined schedule.


BANT: An acronym standing for “Budget Authority Need Timeline”, referring to the criteria traditionally used to qualify leads. (Also see “CHAMP.”)

Business intelligence: Application of statistics to analyze CRM data for identification of past trends, prediction of future trends and improvement of current performance. (See “analytics.”)


Case: An area of the CRM set up for a specific activity or interaction. For example, a customer service case relating to a particular question

Case management: A systematic method for tracking and managing customer service interactions. (See “case.”)

Case management CRM: A specialized CRM tool or application for managing customer service interactions. (See “case,” “case management.”)

CHAMP: An acronym standing for “Challenges Authority Money Prioritization,” that refers to four contemporary criteria used to qualify leads. A more recent variation of BANT. (See “BANT.”)

Cloud-based CRM: CRM software remotely hosted by your CRM provider and accessed via the web or a mobile app.

Comma-separated values (CSV): A file format commonly used in spreadsheet programs such as Excel, characterized by the use of commas to separate data fields. Often used to store contact information. CSV files frequently get imported into CRM software or are exported from CRM programs to other applications.

Contact management: Standard operating procedures for storing, retrieving and using your customer contact information. (See “contacts.”)

Contacts: In general, any person or organization that interacts with your business such as a lead, customer, supplier who you store in your CRM database alongside contact information.

Conversion: The process of a prospective customer becoming a paying customer.

Conversion rate: The percentage of prospects that convert into paying customers, calculated by the ratio of the number of prospects who become customers to the total number of prospects who interact with your sales representatives, expressed as a percentage.

CSV: See “comma-separated values.”


Dashboard: Visual reports of all the data that's important to you, designed to make it easy for people to absorb information at a glance

Database: An organized collection of customer records. Normally refers to records stored in a digital format such as a spreadsheet or CRM system, but can also refer to physical records.


Email template: A pre designed or pre written email that can be modified and sent to contacts, especially useful for mass email campaigns.


Field: The area in a CRM database where you input data. For example, a numerical field could be a phone number, text field could be an email.


Hot lead: A new contact who has displayed specific behaviors that indicate they are highly likely to purchase.


Integration: The process of sharing data between a CRM program and another software program in order to streamline business processes. For instance, integrating a CRM data to an autoresponder program automates the process of sending mass mailings.


Junk lead: A lead who has expressed an interest in a product but is showing key signals that they're not in a position to buy such as not having enough budget. It's therefore unprofitable to invest the time in pursuing them.


Key performance indicators (KPIs): Variables selected to measure and track individual's impact on business performance.

Knowledge base: A digital tool storing key business documentation such as support to assist customer service representatives or customer self-service.

KPI: See “key performance indicators.”


Last touch: The last interaction with a lead before they converted to a paying customer. (See “touch.”)

Lead: An unqualified sales contact who has shown an interest in your business but has not been qualified by any BANT or CHAMP criteria. (See “BANT” and “CHAMP.”)

Lead conversion: The process of a lead becoming a prospect or customer. (See “lead.”)

Lead conversion rate: The percentage of leads who convert to prospects or customers. (See “lead,” “lead conversion.”)

Lead scoring: The process of giving a lead a series of scores to demonstrate how likely they are to buy from you. The scores can be based on specific criteria such as company revenue, industry type and also buying signals such as downloading content or attending an event. (See “qualified lead.”)


Marketing-accepted lead (MAL): A lead who has been identified as a valid opportunity to become a paying customer based on how well they match certain criteria. (See “lead.”)

Marketing-qualified lead (MQL): A lead who has been deemed worth the time and resource of pursuing based on them meeting specific criteria. (See “lead,” “qualified lead.”)


On-demand CRM: See “cloud-based CRM”.

On-premise CRM: CRM software stored locally on your own servers.

Opportunity: A potential revenue-generating deal with a person or organization who has expressed an interest in your product or service.


Pipeline management: The process of proactively moving leads along the steps towards becoming paying customers. Can refer both managing the leads of individual sales representatives or sales teams. (See “sales pipeline.”)

Prospect: A qualified lead whose profile matches your target market and is showing specific buying signals.


Qualified lead: A lead who meets set criteria and is confirmed to be a real opportunity worth your sales representative's time and effort to convert to a buy. Also known as a prospect. (See “prospect.”)


Record: The profile of an individual contact, organization or opportunity. It can also be used to describe a row of data associated with an individual contact.

Report: A summary of data in a CRM system, organized in a format suitable for easy interpretation and practical use.

Roles: The different permission levels a CRM user can have to perform specific actions in the software. Used to control activity and data across different teams and individuals.


Sales funnel: A visual image symbolizing the quantity of leads, prospects, sales appointments and closed sales currently being handled by a sales representative or team. The conversion rate at which contacts in one step of the sales process move to the next step may also be included. Since each step in the sales process involves a larger quantity than the one before, (for instance, leads outnumber prospects), the visual representation is wider at the top than the bottom, hence the image of a “funnel.

Sales pipeline: A visual display of each stage of your sales process. You use it to track all your sales opportunities through to the deal being won. It can also refer to the quantity and potential dollar value of current sales activity by an individual sales representative or sales team.

Segmentation: Organizing your contact list into groups classified by select criteria. You may classify leads who have not purchased from you in a separate group from customers who have. Useful for more focused target marketing and personalized sales.


Task: An action required to move along a business activity. Arranging a sales appointment would be a task performed by a sales team to nurture a lead. CRM programs allow you to define tasks and track their progress.

Task management: The process of organizing your tasks and those of others. (See “task.”)

Touch: A marketing or sales interaction with a lead.


Workflow: A series of steps required to complete a business task.

Workflow automation: When activities are automatically triggered without any manual input such as one task starting as soon as another closes.

Knowing these CRM terms will make it easier for you to compare the features of CRM software products. Continue reading to learn how CRM software can benefit your business.

Illustration showing the 4 different points of how a CRM works

Chapter 3: Top 4 benefits of a CRM

How can a CRM grow your business? Customer relationship management software offers many benefits to businesses. These benefits span a wide range of industries and multiple departments, making the list numerous. To focus on a few highlights, four of the leading categories of benefits include:

  • Saving time and streamlining workflow with contact management
  • Maximizing sales with sales pipeline management
  • Improving efficiency with team management
  • Optimizing performance with analytics reports
Illustration showing the 4 different points of how a CRM works

Save time and streamline workflow by keeping your contacts in one convenient place

Contact information sit at the heart of a CRM as it's key to building customer relationships. A customer relationship management tool gives you a single digital interface for storing, viewing and managing your contact information. This seemingly simple function enables a surprisingly powerful range of applications that save time by streamlining workflows and delivering business benefits:

  • See all your contact information in one place instead of sifting through multiple apps or physical files
  • Track the history of all your interactions with a customer
  • Store emails, documents and files associated with customer interactions
  • Manage tasks for contacts by creating to-do lists and tracking progress
  • Search contact databases to instantly retrieve the information you need
  • Share contact lists with co-workers to ensure that everyone on the team has current information
  • Get to know your contacts by storing information about their social media accounts and adding customized tags and fields for additional data
  • Create contact lists for easy exporting to applications such as email marketing tools
  • Categorize contacts for more segmented internal communication and external marketing
  • See all interactions with contacts at a glance
  • View summary data from integrated apps for each contact
Illustration showing the 4 different points of how a CRM works

Manage your sales pipeline for maximum revenue

When you apply CRM contact management to managing your sales contacts, the results can multiply the revenue flowing through your sales pipeline. Using a CRM to manage your sales pipeline enables you to:

  • View all sales opportunities at a glance
  • Easily compare the performance rates of each individual sales representative or team
  • Spot the activities that have the biggest impact on sales conversions, so you can do more of them
  • Track key performance indicators to identify areas for improvement and optimize performance
  • More accurately forecast future revenue
  • Set realistic business growth targets
  • Prioritize high-value opportunities
  • Identify where a prospect is in your sales cycle and what needs to be done next to move them along
  • Compare sales activity with revenue projections to see if more prospecting efforts are required to meet quotas
  • Identify your team’s top-performing representatives and match them to your hottest sales opportunities
  • Track history of sales contacts, including notes, emails and attached documents.
Illustration showing the 4 different points of how a CRM works

Improve teamwork efficiency by using CRM for team management

Customer relationship management software isn’t just for managing customer data. It works equally well for managing teams. Here's how CRMs serve as a powerful tool for team management:

  • Store information on company personnel
  • Organize lists of personnel so you can easily identify teams
  • Allocate workload effectively from one central point
  • Combine teams with specific roles so they only see the contacts, sales and customer service cases relevant to them
  • Restrict access to sensitive information for security purposes
  • Create specific contact lists for internal communication
  • Coordinate team calendars
  • Schedule meetings
  • Delegate tasks amongst team member
  • Create step by step workflows for people to follow so they know exactly what to and when
  • Monitor project and task progress
  • Report on team and individual activity
Illustration showing the 4 different points of how a CRM works

Track and optimize performance with CRM analytics reports

Your customer data and internal data serve as an invaluable source of information for your marketing, sales and customer service teams. Harnessing analytics to your CRM enables you to transform your data into practical business intelligence. By using analytics to generate CRM reports, you can:

  • Mine your sales data for insights into the health of your pipeline
  • Break pipeline activity down into each stage of the funnel such as Leads, Qualified leads, Opportunities to spot trends
  • Track sales activity to make sure your team is generating enough leads and closing enough deals to meet your revenue targets
  • Calculate average sales value and average customer lifetime value
  • Track the average time it takes your team to close a sale so you can better predict sales volume and revenue
  • Monitor every aspect of your sales cycle, for both individual customers and your team as a whole
  • See the number of won sales opportunities by individual representatives and teams to share best practice
  • Identify lost sales opportunities to take corrective action before it's too late
  • Notice where your sales pipeline is “leaking” and put steps in place to rectify
  • Set realistic benchmarks to measure progress towards sales goals
  • Track performance of individual sales representatives
  • Identify where representatives are having trouble in the sales process and where they need to improve
  • Predict whether your team members are on track to meet quotas
  • Compare individual performance with team averages
  • Export report data into other applications for added functionality such as Google Data Studio
  • Share data reports with other members of your organization

These benefits and others make a compelling case for companies to adopt CRM software as it will ensure all areas of the business work more efficiently. Before settling on a CRM solution, you should read on to learn about the main types of CRM software you can select.

Illustration showing the 4 different points of how a CRM works

Chapter 4: The three types of CRM software

Customer relationship management software programs contain different features. While there are many ways to classify CRM software, in terms of functionality, most applications generally fall into one of three categories:

  • Operational
  • Analytical
  • Collaborative
Illustration showing the 4 different points of how a CRM works

Operational CRM software

Operational CRMs represent the most popular customer relationship management software category. They automate customer-facing business operations such as sales, marketing and customer service. By centralizing customer data management from these business functions, they help streamline workflow.

Sales constitute one of the most popular operational CRM applications, and some CRM interfaces exclusively handle sales data. When used for sales, operational CRM software serves to support functions such as

  • Storing lead contact lists
  • Tracking leads through the sales cycle
  • Storing information about leads through notes, emails and document attachments
  • Prioritizing leads based on qualifying criteria
  • Assigning leads to representatives
  • Scheduling follow-up reminders for representatives to contact leads
  • Generating reports on individual and team sales pipelines

Marketing makes up another major operational CRM application, often integrating closely with sales CRMs. Marketing CRM software serves functions such as:

  • Organizing contact lists generated from sources such as email, social media pages, online ads and direct mail
  • Segmenting leads for more targeted marketing
  • Tracking leads through the marketing funnel
  • Monitoring a prospect's interaction through multiple channels
  • Scoring leads based on qualifying criteria
  • Assigning customized content corresponding to demographic profiles
  • Scheduling automated follow-ups

Customer service has emerged as a third major application of an operational CRM. Customer service CRMs both serve to improve support and to promote sales by boosting satisfaction and up-sell opportunities. Operational CRM software helps customer service teams streamline key functions, such as:

  • Organizing customer service data generated from all support channels, including chat, phone and email support
  • Storing notes, emails and file attachments associated with support tickets
  • Matching support tickets to customer account data for a more personalized, faster service
  • Segmenting tickets requiring human assistance from routine inquiries that can be handled through self-service
  • Suggesting customized solutions for self-support channels such as knowledge bases and IVR based on customer data
  • Prioritizing tickets requiring human support and schedule them with available representatives
  • Scheduling automated follow-ups and follow-up reminders for tickets requiring them
  • Creating specific workflows for agents to follow when they're on a call so a consistent level of service is always given
Illustration showing the 4 different points of how a CRM works

Analytical CRM software

Customer relationship management software can also serve as a source of business intelligence. Analytical CRM software takes data generated from customer interactions and identifies information that can be used to measure, predict and improve performance. Analytics tools may be built into operational CRM software, or they may be packaged separately.

CRM analytics can apply to any of the business functions supported by operational CRM. When applied to sales data, analytical CRM software can be used to:

  • Identify trends that characterize prospects who are more predisposed to buy
  • Classify prospects based on buyer profiles
  • Pinpoint your best sales opportunities and best customers for more sales activity
  • Analyze team sales performance
  • Determine which sales representatives generate the most revenue
  • Flag risks of missing quota and take corrective actions
  • Identify which products sell best and those to drop
  • Determine the natural sales cycle for your products and services
  • Align product sales trends with inventory planning

When used to analyze marketing data, CRM software serves to:

  • Provide market research insights into audience demographics
  • Develop profiles of ideal buyers
  • Identify top sources of marketing leads
  • Segment audiences for targeted campaigns
  • Match personalized marketing content to individual leads
  • Tailor promotional channels to personalized preferences
  • Analyze marketing campaign performance
  • Optimize lead conversion rates
  • Identify which campaigns are generating the most leads and best return on investment

Analytical CRM also provides valuable insights for customer support teams. When applied to customer service data, analytical CRM can:

  • Combine information from multiple support channels for a complete perspective
  • Segment support tickets to identify trends
  • Analyze customer buyer profiles for cross-sell and up sell opportunities
  • Measure customer satisfaction levels
  • Compare satisfaction across different support channels
  • Track customer health scores
  • Identify customers at most risk of churn
  • Track key performance indicators that affect customer satisfaction
  • Identify which customer service issues are generating the highest ticket volume
  • Pinpoint if there's any delay in the support process
Illustration showing the 4 different points of how a CRM works

Collaborative CRM software

The third major category of customer relationship management software goes by the name of collaborative CRMs, also sometimes called a strategic CRM. This type of CRM software shares customer data between departments in order to promote a consistent customer experience of the company. For instance, data collected by the customer service department is shared with marketing and sales representatives so they can recommend products more suited to the customer’s needs. This serves to promote customer satisfaction and loyalty.

Collaborative CRM software performs a couple of major functions:

  • Interaction management
  • Channel management

Interaction management tracks and optimizes all of a customer’s interactions with the company, whether they involve marketing, sales or customer support. For instance, a purchase recorded by the sales department is shared with customer service to trigger a follow-up support call to check the customer is happy with the product.

Channel management collects and shares data about a customer’s preferred channel of communication. For instance, some customers prefer to be contacted via email, while others prefer phone calls or texts. Channel management ensures all departments are aware of a customer's preferences. This promotes higher customer satisfaction, building better relationships and boosting loyalty.

Crossing categories

The three major categories of customer relationship management software do not necessarily exclude each other. Advanced CRM tools may combine characteristics of all these categories. CRM tools can also integrate with other software programs to deliver the functionality of multiple categories.

Now that you know a bit about the different types of CRM software available, you’re in a better position to compare solutions. Keep reading to learn the key features you should look for in a CRM tool.

Chapter 5: 14+ Things you should look for in a CRM and how to choose

When you’re deciding how to choose the right CRM for your business, there's a lot to consider. Some essential criteria apply to most businesses seeking CRM solutions. Additional considerations apply depending on the size and nature of your business. Here are 14 general things to look for in any CRM solution, along with some items that may be important to your company’s size and industry.

For most CRM applications, certain essential criteria usually come into play. When making a buying decision about CRM, features to consider include:

  1. Contact management tools
  2. Sales pipeline management
  3. Analytics and reporting
  4. Task management and calendar scheduling
  5. Team and role capability
  6. Workflow automation
  7. Customization
  8. Integration capability
  9. Mobile-friendliness
  10. User-friendliness
  11. Uptime
  12. Security
  13. Customer support
  14. Price

1. Contact management tools

Because storing contact data is the most fundamental function of customer relationship management software, this feature should be top of your list when considering CRM solutions. All CRM tools can perform the basic function of storing customer data. Others have advanced contact management features, such as:

  • One view of all customer data in one place, including notes, external documents, emails, PDF files and any integrated app information
  • Tagging capability so you can segment your contact list into categories such as leads, customers or vendors
  • Import and export to easily pull your data from programs such as Excel, Outlook and Gmail
  • Lists to segment your contacts based on different criteria

Look to see what contact management tools are included in the CRM solution you're considering.

2. Sales pipeline management

Supporting sales represents one of the most common reasons for CRM adoption, making sales pipeline management one of the most important features in CRM solutions. If you plan to use your CRM for sales, look for features such as:

  • Sales dashboards that let you see all key sales data at a glance
  • Ability to track progress of sales opportunities
  • Pipeline revenue projections
  • Sales pipeline key performance indicators such as conversion rates
  • Advanced sales reports
  • Ability to see the performance of team members

3. Analytics and reporting

Analytics ranks with sales pipeline management among the most important applications of a CRM. Most CRM tools include some analytics and reporting capability. Some offer much more sophisticated business intelligence features, such as:

  • Specialized sales performance statistics
  • Pipeline performance broken down by variables such as sales representative, team activity and pipeline forecast
  • Detailed tabular data displays
  • Advanced filters to focus on the information you need
  • Built-in reports displaying commonly requested information
  • Ability to generate customized reports
  • Integration with external analytics tools for extended functionality

4. Task management and calendar scheduling

If you plan to use a CRM for team collaboration, the ability to manage tasks and calendar scheduling become important considerations. CRM software with these features can allow you to:

  • Associate contacts with tasks to be performed, such as follow-up sales calls
  • Automate tasks to better organize your workflow
  • Categorize tasks to report on performance
  • Schedule tasks on individual and team calendars
  • Define repeating tasks to streamline routine activities

5. Team and role capability

Collaboration can be enhanced by CRMs that offer team and role management. Teams and roles allow you to control access to information by segmenting your staff, promoting smoother workflow as well as enhancing security. Look for a CRM that lets you:

  • Organize internal contact into teams to limit the contacts, sales opportunities or customer service cases they can access
  • Assign team members roles which define the data they can access and the tasks they can perform
  • Track performance and activity by team as well as individual

6. Workflow automation

Task management, calendar scheduling, plus team and role capability can all promote more efficient workflow automation. To use your CRM to improve productivity, look for a solution that includes:

  • Built-in features for automating common business functions, such as tracking sales or scheduling marketing touches
  • Integration with other apps such as marketing platforms or accounting programs for enhanced workflow automation

7. Customization

The ability to customize your CRM can significantly amplify its functionality and value. Different CRM tool offer a range of areas you can customize, including:

  • fields for recording customer information
  • lists for segmentation
  • team and roles
  • reports
  • dashboards for more actionable deployment of analytics data

8. Integration capability

External integrations can also vastly enhance CRM functionality. Many CRMs integrate with the most popular business software tools. Others offer a much wider selection or the option to connect to a third party tool like Zapier to connect your CRM to any tool. CRM sales pages normally include a list of compatible apps for integration. Integration options usually include:

  • Accounting software
  • Contact lists from other software programs
  • Email marketing tools
  • Google suite
  • Help desk tools
  • Inventory management software
  • Invoicing tools
  • Marketing platforms
  • Payroll time tracking software
  • Project management software
  • Telephone and VoIP apps
  • Web chat tools
  • Web form apps

When considering CRM solutions, look to see if the for tools you are already using can be easily integrated with your CRM software.

9. Mobile-friendliness

With a growing number of business owners and workers conducting business from their smartphones, mobile compatibility has become an in-demand CRM feature. CRM tools were originally designed for desktop. Some desktop applications that have migrated over to the cloud still retain a desktop-oriented design, while others have designed a mobile friendly version. Other CRM tools have a native mobile design.

When selecting CRM tools, look to see how it performs on your mobile devices. Also, find out whether your provider uses cloud-based apps or traditional software installation.

10. User-friendliness

User experience can have a major impact on the success of your CRM solution. A well-designed interface can streamline workflow, while a poor design can impede functionality and waste time. Most CRM tools provide one or more dashboard views for viewing key information. Check out the design of a CRM app’s dashboard carefully before deciding whether or not to use it. Ideally, arrange a live demonstration or trial simulation of it in action. You can also get a good sense of a CRM app’s user-friendliness from video demonstrations, tutorials and online reviews.

11. Uptime

If you’re using a cloud-based CRM app, or if your team will be accessing your CRM app through an online portal, your ability to use your CRM will depend on the reliability of your provider’s server. Internet providers measure the amount of uptime that a server is available by expressing it as a percentage. A server with 99.999 percent uptime (“five nines”) only experiences about 5.26 minutes of downtime annually, which is considered highly reliable. An uptime of 99.99 percent (“four nines”) translates into about 52.6 minutes of downtime a year. Check your provider’s uptime rating when considering solutions.

12. Security

Your CRM data represents an attractive target to cybercriminals, and it’s important to consider security when choosing providers. The security of your CRM solution depends both on your provider’s practices and on the type of security tools built into your CRM software such as two step verification. Tools such as team and role management can help you restrict access to vital information so that only authorized users are able to see it. Additionally, talk to your provider about what type of security practices they follow so you're confident your data is safe.

13. Customer support

Since CRMs are a technology product, customer support can significantly affect your user experience. Before agreeing to a contract with a CRM provider, study the website, talk to their representative and use their communications channels to see how responsive and friendly they are. Many CRM providers use chatbots, which can work well for standard questions but can be frustrating when you need to speak to a human. Consider issues such as:

  • Is training provided or is it self serve?
  • What support channels are available?
  • Who is responsible for data migration from your existing contact files into your CRM software?
  • Do you retain all rights to your data?
  • What is your provider’s policy for backing up and restoring your data in the event of an emergency?

14. Price

As with any business expense, price figures into the bottom line when evaluating CRM solutions. Pricing for CRM solutions range from freeware to premium packages.

When evaluating prices, consider both stated costs and hidden fees. Talk to your provider’s sales representative about issues such as:

  • Potential installation fees
  • Data migration fees
  • Training costs
  • Licensing fees
  • Negotiable contracts
  • Free upgrades
  • Cancellation charges

When considering price, be sure to weigh cost against potential savings in efficiency, productivity and revenue that can be gained by a CRM in order to estimate return on investment. Cheaper isn’t necessarily the best investment. If you start on the basic package, consider the cost of the top package too as you'll want to be sure you can afford the next step up as your business grows.

Business size considerations

The size of your business can affect your CRM selection. Startups, established small businesses and mid-sized businesses have different requirements for a CRM solution.


If you’re a startup, you may have a relatively small contact list but individuals may be responsible for multiple roles. Keeping customer data in one place, alongside all their interactions with your business will help everyone work more efficiently.

Startups may also be in the process of establishing an effective sales pipeline and this will frequently change as they sell to more customers. Having a system in place that can be easily adapted to their changing needs is very important, CRM systems are perfect for this. Using CRM to streamline the sales process from the beginning helps busy business owners feel in control of their revenue. Having an organized system to track and monitor interest in your business will make sure nothing important ever falls through the cracks, a CRM solution will be like your very own PA.

For startups, price also figures heavily into CRM selection. If your startup is still on a shoestring budget, you may wish to start with a freemium version of a CRM solution and upgrade later when revenue levels increase.

Small businesses

Like startups, small businesses may need to export contact data from other software into a CRM program. However, an established small business normally has a larger customer database and a higher volume of sales, with a greater need for more efficient sales automation.

Small business owners considering CRM software may need a solution that helps manage a sales team. They may also want their CRM solution to handle marketing and customer service tasks too. Additionally, a CRM software that stores data on partners and vendors as well as customers may be important.

An established small business may also employ more software than a startup, making integrations an important feature in a CRM solution.

Mid-sized businesses

Mid-sized businesses have the same CRM needs as smaller counterparts but on a larger scale. Their CRM solution may need to handle a larger sales team with more sophisticated sales procedures. Additionally, they may use their CRM to manage larger marketing and customer service teams.

A mid-sized business may have a greater emphasis on growing revenue and increasing efficiency than a smaller one. This brings the business intelligence side of a CRM into focus, making a CRM solution with advanced analytics and reporting tools ideal.

Mid-sized companies also tend to have more sophisticated IT operations than smaller businesses. They may need a CRM with more advanced integration and customization features.

Industry-specific needs

CRM needs can also vary by industry. Certain industries may need a CRM they can customize to suit their specialist workflows. Examples include:

  • Real estate
  • Travel agencies
  • Accountants
  • Construction
  • Hotels and hospitality

Real estate

For real estate businesses, a CRM serves an important role as a lead generation tool. When a homebuyer contacts a real estate agent expressing an interest in property, the chances of making a sale drop quickly if the agent does not respond immediately. A real estate CRM should allow realtors to manage communications with prospects in a single interface from their mobile devices in order to respond quickly to inquiries.

Additionally, a real estate CRM should help agents manage access to listings. A CRM can serve an important marketing function as they allow agents to pull leads from multiple listing services and online resources. The ability to share listings with customers by sending them links can also help schedule property viewings more efficiently.

Travel agencies

Travel agents need a CRM solution that can handle a diverse range of data. In addition to storing customer's preferences, a travel agency CRM needs to store information about flights, hotel bookings, itineraries and all items associated with travel. A solution supporting this should be easily customized to help travel agents view all relevant information in one place.

Travel agency CRMs should also help agents deliver superior customer service. CRM task management features can help agents keep track of trip to-do lists and send schedule reminders to ensure that customers have an enjoyable experience from the minute they book. A CRM can also support customer service by tailoring post-booking information such as resort guides, restaurant reviews and the best places to visit. Delivering such a personalized customer experience, from enquiry through to post-trip feedback, can all be delivered and monitored through CRM software to boost loyalty and referrals.


An accounting CRM needs to integrate client contact data with relevant financial information. At a minimum, an accounting CRM tool should allow accountants to store notes and files relevant to client bookkeeping. Ideally, an accounting CRM app should support integration with the accounting app the client is using, providing optimal efficiency.

Accounting CRM software can also help build client relationships by delivering a seamless service. For instance, an accountant can schedule automated workflows in the CRM to remind them and their clients when specific actions need to be taken to meet tax return deadlines. Accountants can also use a CRM to share financial reports and insights with clients for better business planning.


For construction teams, CRM applications can serve as combined marketing, sales, customer service and project management tools. A construction CRM should help teams share building plans with prospects and clients plus keep clients updated on project progress. This calls for a solution with the capability to customize data fields and track scheduled tasks.

Construction teams can also use a CRM to streamline communication with workers and suppliers. A CRM solution suitable for construction should allow project managers to schedule tasks and share reminders. Solutions capable of integrating with other apps can also serve as tools for automating processes such as signing contracts and sending invoices.

Hotels and hospitality

For businesses in the hotel and hospitality industry, a CRM serves as a powerful tool for delivering superior service and building customer loyalty. Using a CRM to store booking and reservation information allows hotels and restaurants to view all information relevant to a customer in one place, including notes on preferences and requests. To support this type of personalized service, a CRM should have an area to add custom notes.

Additionally, hotel and hospitality providers can use a CRM for sending out promotional offers to build repeat business. A CRM that allows customer list segmentation and integration with marketing apps can help drive better results and boost revenue.

Choose the right features for your needs

CRM solutions support a rich range of features suitable for a wide variety of business sizes and industries. Consider the individual needs of your company, and choose your CRM accordingly.

Whatever CRM solution you select, you’ll face the task of implementing your software. Read on for some tips for smoother CRM adoption.

Illustration showing the 4 different points of how a CRM works

Chapter 6: A guide to adoption & deployment of your new CRM

Settling on a solution represents a big step towards CRM implementation, but it’s only one step on the journey. After deciding what CRM to use, you’ll also need to configure your solution, import your data, integrate your software features with your workflow, train your staff and monitor your results. Here are some step-by-step guidelines for smoother CRM adoption while performing these tasks.

1. Consult all relevant departments and decision makers

Adopting a CRM solution is a major task that affects your whole company. This makes it crucial to get everyone who will be affected by your CRM implementation on board with your adoption process. If a key department or decision maker isn’t on the same page with the rest of your team, it can make implementation an uphill battle. It can also impede securing a budget for the project.

Appoint an implementation coordinator to supervise the process, and have them either communicate the need for a CRM to the relevant parties or assign someone to perform this task. Parties who should be in the loop can include:

  • Executives
  • IT supervisors
  • Financial planners
  • Sales managers
  • Marketing managers
  • Customer service supervisors
  • Vendors or suppliers who would be affected by your CRM implementation

Make sure everyone understands how a CRM can benefit your business as a whole and their department in particular. Whoever is in charge of the budget for the project should be presented with a cost-benefit analysis that demonstrates the return on investment of adopting a CRM.

2. Decide how your CRM will fit into your workflow

To get the most out of your CRM tool, you should plan how your CRM data will fit into the current workflow of data and your business processes. To achieve this, map out how data will flow into your solution from different departments such as sales, marketing and customer service, and back out to these departments.

In the process, note what other software is being used by these departments will need to be synced with your CRM in order to have one source of truth. Your IT team can assist with this task under the supervision of your implementation coordinator and in consultation with relevant department managers.

3. Collect data to be imported

Your workflow map will give you an overview of the sources of data to be imported into your CRM solution. Take an inventory of these data sources, and begin collecting them. Some data may already be stored in digital format. Other data may need to be digitized.

4. Configure your app

Before importing your data into your CRM, you will need to configure certain settings so it's set up to receive your historical information. It will save you time later. Some settings can also be adjusted after importing data but it's best to put the time in upfront.

Items you may need to configure can include:

  • Credentials for administrators and other authorized users
  • User types and permissions
  • Security settings
  • Customized fields and activities
  • Layouts for dashboards and reports
  • Integrations with other apps

5. Transfer your data

At this point, you have reached the critical step of transferring your data into your CRM solution. You will need to make sure your data is in a format compatible with your CRM software in order to proceed.

All data to be included will need to be imported from the correct file type, so any data that's not should first be transferred into a compatible format. You will also need to make sure the fields in your file are consistent with the fields set up in your CRM system. Make sure fields are separated by the correct punctuation (usually commas), and check that the field lengths are set long enough not to cut off any data.

Your CRM provider may offer support for the data importation process. Some include a step by step program to assist you. Talk to your provider for guidance.

6. Test your CRM

Before putting your CRM into live use, you’ll want to test it to make sure everything runs smoothly. You can avoid large-scale problems later by testing your CRM on a small scale before deployment.

For assurance that your CRM is working properly, you should test multiple areas, including:

  • Making sure users are able to access their accounts
  • Checking a data sample to make sure all information has imported correctly
  • Testing functionality of your database by performing basic tasks such as contact searches
  • Reviewing sample reports to make sure analytics tools are working properly
  • Testing integrations work correctly and the correct data is being shown
  • Checking the user interface is easy to use
  • Verifying security features are configured correctly

7. Train your staff

Adequate training can make the difference between a smooth CRM deployment and an unproductive hassle. Supervisors and staff members should know how to use your CRM before attempting to use it live with customers. Your provider may offer training services and resources.

Effective training starts with good documentation. Designate a team member to create a book of top tips to get the most out of your CRM software. Use these to train key supervisors and staff. As workers are learning to use your CRM, test it out on a small scale to make sure there are no major issues before rolling it out department-wide or company-wide.

8. Monitor your implementation results

After you deploy your CRM, monitoring your results can help ensure you’re getting the most out of your investment. Establish key performance indicators that track how well your CRM is working, measuring areas such as:

  • Lead generation performance improvement
  • Sales conversion rate improvement
  • Customer wait time reduction

Tracking these types of indicators can help you flag problem areas in need of review. It can also enable you to make tweaks to your standard operating procedures to improve your performance. Consider doing split tests to see if you can find ways to improve your key performance indicators.

Following these steps can help make your CRM implementation a smoother and more productive experience. What you get out of your CRM will also depend heavily on which provider you choose. Read the last section of this guide to help you decide if Capsule CRM is the right solution for your business.

Illustration showing the 4 different points of how a CRM works

Chapter 7: How Capsule CRM helps you cultivate customers, win sales and save time

When you’re considering customer relationship management providers, you’ll want to be sure to take a look at Capsule CRM. Capsule makes CRM simple. It's designed to help companies build stronger customer relationships, make more sales and save time.

Capsule combines a simple, user-friendly design with a powerful range of benefits:

  • Nurture customer relationships by storing all customer information in one place so you can easily track conversations, review customer history and deliver more personalized experiences
  • A complete view of customer interactions by attaching notes, emails and document files to customer account data
  • Easy segmentation using dynamic lists that update automatically
  • Provide consistent levels of service and ways of working by creating a sequence of tasks that work towards or from a specific date
  • Win more sales with pipeline management tools that match your sales process and help you spot hot opportunities for fast follow-up
  • Easily spot opportunities that require followup by tailoring alerts in your sales pipeline after a set number of days
  • See the big picture with analytics tools and reports that highlight the activities making the biggest impact on your sales
  • View key performance indicators with standard and customized activity reports that highlight sales performance and pipeline data by individual or by team
  • Leverage insights for advanced business intelligence insights through integration with Google Data Studio
  • Focus your staff with team and role management tools that let you decide what data workers should see
  • Get things done with task and calendar management tools for handling meetings, appointments, phone calls and submission deadlines

Capsule integrates seamlessly with many popular apps, and also supports add-ons that let you extend the software’s native functionality. Integrations include:

Capsule’s mobile app lets you access your CRM from any Android or iPhone device. The mobile app includes caller ID, adds a call activity after every call ends and reminds you to make a note in your CRM, helping you keep all information organized in one place.

Capsule is easy to customize to match your business model. You can customize:

  • data fields
  • tags
  • sales milestones and pipeline
  • contact lists

These customized features allow Capsule to support businesses of all sizes in a wide range of industries. Startups, small businesses and mid-sized businesses will all find that Capsule meets their needs. Industries Capsule supports include:

  • Professional services
  • Software
  • Real estate
  • Construction
  • Travel agencies
  • Hotels and hospitality
  • Accounting and many more

Capsule boasts 99.99 percent uptime. Automated backups keep your data secure from disaster loss. Dedicated support includes a self-help portal and a friendly team based in the UK and US contacted through email or online.

Capsule CRM offers a 14 day free trial to a Professional and Teams plan, perfect for small to medium sized businesses. There is also a free starter CRM plan for up to 2 users and 250 contacts. You can download it from the App Store or Google Play and start your free trial today.

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