What is CRM Software? A Beginner’s Guide

ByMilica Milenkovic
January 20,2022

Maintaining good customer relationships is the pillar of any successful business. Still, a few decades ago, the process of collecting, tracking, and managing client data within a company was fragmented and a lot more time-consuming. Companies would keep details about their customers in spreadsheets, Rolodexes, and filing cabinets. 

These methods were imperfect in so many ways - they involved a lot of manual work and often prevented proper information distribution across different departments. Many business opportunities were missed prior to the introduction of CRM. 

What is CRM software

Short for customer relationship management, a CRM system is a piece of software businesses use to store information about their customers, manage interactions, and automate a number of processes related to a client’s life cycle through the company’s marketing and sales funnels. Given that it helps nurture customer loyalty, turning it into revenue, a reliable CRM system is a vital tool for almost any company, regardless of what products or services it offers. 

Used by marketing teams, sales representatives, and call center agents to maintain contact with clients and quickly respond to their needs, a CRM platform enhances a company's interaction with clients.

What does a CRM Software Solution Do?

The purpose of any CRM program is to allow salespeople and marketers to establish, manage, and analyze relationships with a business’s existing and prospective customers. It simplifies the process of tracking interactions and collecting information. Thanks to these functionalities, marketers and sales representatives always know who these customers are and their history with the company when they get in touch with customers. Not only does this information help personalize the communication, but it also strengthens customer trust and increases the chances of conversion. 

CRM services allow businesses to track interactions between the company and its actual and potential customers through a number of channels such as emails, phone calls, social media networks, contact forms, and search engines. 

Another great thing about these software solutions is that they can automate repetitive tasks, set reminders, and display alerts if certain matters require immediate attention. Furthermore, some CRM solutions come with analytical capabilities which you can use to track and evaluate the efficiency of different functions or identify sales patterns. For example, let's say you run a real estate brokerage. You can use your real estate customer relationship management system to track and manage your leads and listings while getting valuable market insights. 

CRM statistics indicate that 91% of US businesses with more than ten employees use some kind of client relationship management software. This piece of information is hardly surprising given how powerful CRM solutions can be. Combined with marketing automation, they provide sales and marketing teams with valuable tools for end-to-end management of sales and marketing funnels, from lead generation and qualification to forecasting and deal closure.

Features of CRM Programs

Here’s an overview of functionalities typically provided through a CRM platform:

  • Lead management: A CRM software as a service tracks the company’s lead generation efforts, allowing marketing team members to add new leads to the system, either manually or automatically, and to track and analyze data about them.
  • Workflow automation: CRM platforms help companies focus on more creative tasks with higher importance levels by optimizing repetitive processes and streamlining mundane workloads.
  • Marketing automation: Some client relationship management systems offer marketing automation functionalities for certain tedious tasks. For example, you can set up your CRM to automatically send customers marketing emails or publish social media posts at chosen times. The goal here is to make sure that sales leads are kept engaged so they can be converted to paying customers. 
  • Sales automation: Similar to marketing automation features, most CRMs come with marketing automation capabilities. Business owners can use these to track client interactions and automate certain elements of the sales cycle that make it easier to follow leads and attract new customers.
  • Analytics: Most CRM business solutions also offer built-in analytics tools that provide insights and help increase customer satisfaction rates. Marketing teams can put this data to good use while creating targeted campaigns. To top it off, analytics features help track attribution and offer valuable information about the overall quality of the customer experience.
  • Personalized customer experiences: Another way to make the most of CRM data is to use it to create individualized and consistent experiences for your prospective customers across different marketing channels. Not only do personalized customer experiences help boost brand awareness, but they also increase conversions.
  • Artificial intelligence: Certain CRM solutions come with built-in AI capabilities that automatically recognize patterns, which lead to successful sales. Ultimately, AI can help any business build more accurate and efficient strategies for future marketing campaigns.

Benefits of CRM Software Solutions 

There are multiple advantages of using CRM solutions, whether you run a small business or a large enterprise. The benefits of customer relationship programs are available to marketing teams, customer care specialists, and anyone in the company who comes in contact with clients. 


Perhaps the most significant advantage of a CRM tool is the organizational capability that it provides. A contact management software helps centralize your client data so that anyone who’s part of your company can find all the information they need in one place. As you transition to a CRM system, you’ll be able to enter basic contact information such as your clients’ phone numbers and addresses. Once your software solution is up and running, you’ll be able to follow, track, and analyze everything from basic information to advanced data about each customer. 

In addition to your organization, your clients also benefit from a solid information management system because gaining a better understanding of customers enables you to offer a better service.

Task Tracking

Another reason why businesses of almost all types and sizes need CRM systems is the program’s ability to integrate with your company’s workflow. This saves lots of time you’d otherwise spend on daily tasks. Automation can significantly increase the overall customer engagement level as it provides consistency. In fact, consistency is one of the underdog benefits of a CRM tool - when clients (or prospective clients) get mixed messages, they can grow confused instead of excited about your offerings.

Additional Sales Opportunities

Why should you stop at 100 or 1,000 customers? Although business owners rarely have a finite number of customers as their goal, many companies often struggle to come up with good ways to generate leads and grow their customer base. A CRM program can help you with that. These software solutions track purchasing patterns and can provide valuable insight into market trends. By learning more about the people who are already your customers, you’ll have enough information to create micro-targeted strategies and encourage more conversions at specific times. 

Sales Management

By now, you’re probably aware that a customer tracking software solution can make the task of managing your client base a lot less complicated. But did you know that a good CRM program can also track sales progress across your whole organization? Once again, these advantages of CRM solutions are available for companies of all sizes and structure types. 

If you run a one-person shop, you’ll get the assistance you need for lead tracking and follow-ups. If your company has a large sales team, all representatives will be assigned new sets of leads, and their journey will be tracked starting from that point. That way, not only will you receive insights on how and when to act on sales trends, but you’ll also get an opportunity to track the progress and performance of your entire sales team.

Personalized Communication

Finding a way to use your sales resources more efficiently with the help of CRM applications is an excellent way to make your business more successful. However, this isn’t where your efforts should stop. CRM tools also provide personalization features such as the ability to nurture campaigns based on industry or to address customers by their first name. In other words, all the information stored in your database can be put to good use to build more profound client relationships through personalized communication.

Increased Retention

Another way a customer relationship management software solution can increase sales is by helping you identify your highest revenue-generating and most engaged clients. For example, you use your CRM to determine a subset of customers who open all of their emails or attend webinars. 

A CRM can also improve retention rates among your existing customers. Thanks to the program’s ability to aggregate customer behavior, you’ll have a chance to spot different patterns, such as when a client is about to churn. Collecting data and gaining insights about client behavior can prove invaluable when it comes to creating a strategy on how to retain at-risk customers. 

On-Premise vs. Cloud-Based CRM

Finally, let’s take a moment to discuss different types of CRM solutions. Depending on your organization’s objectives, you may find on-premise solutions more fitting or lean towards the advantages of cloud CRM deployment.

The most apparent difference between the two options is where the information is stored. With the on-premise solution, the software is located on your company’s servers, so this is a better choice for organizations with very strict security policies. The downside of an on-premise CRM is that the implementation can take a long time. There’s also the requirement to invest in suitable IT infrastructure. On the other hand, if you go for the cloud solution, your data will be kept on the software provider’s remote servers. Accessible via an internet browser of your choice, the service doesn’t require any type of software installation.

Additionally, if you decide to go with the in-house option, you’ll need to purchase a license beforehand and maintain the system on your own. Subscribing for a cloud-based solution, however, means choosing the pay-as-you-go approach and letting someone else take care of the CRM application’s flawless operation and data security.

Cloud CRM software solutions are much more popular these days than their on-premise counterparts. There are several reasons that can explain this trend - a cloud-based option is a good choice for business owners who want to have their data accessible at all times and value the ability to scale the service up and down with ease. Furthermore, choosing a cloud CRM is a no-brainer for smaller-sized companies as it allows them to be productive and enjoy all the benefits of CRM technology without the need to strain their budget. 

What is CRM in simple words?

CRM is short for customer relationship management. It can refer to a process, strategy, or technology solution. Taking advantage of CRM programs can help companies of almost all types and sizes establish and manage relationships with clients, partners, suppliers, and colleagues mostly by leveraging organizational functionalities and analytical insights.

What is CRM software and how does it work?

A CRM software solution provides a centralized system for businesses to store data about their clients and prospects, track and analyze interactions, and share this information across marketing, sales, support, and other departments. By offering businesses an efficient way to manage relationships with their customers, CRM solutions help companies grow.

What is the benefit of CRM?

CRM solutions combine multiple customer relationship tools in one place - they facilitate the collection, organization, and management of customer data. These systems aim to help business owners improve their relationships with existing clients, find prospective customers, and retain or win back former clients.

Why is CRM so important?

CRM systems help businesses collect and analyze relevant data on clients and prospects so that their sales and marketing team members can use these insights to personalize communication. So, what is CRM software exactly? This type of program gathers customer contact information with the aim to help businesses build more profound relationships with their clients and ultimately establish loyalty and high customer retention rates.

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By Danica Djokic · March 01,2022

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