A Beginner's Guide to CRM Software

A Beginner's Guide to CRM Software

If you're still trapped in the land of using spreadsheets, apps, and databases to keep track of client and lead communication, you might consider customer relationship management (CRM) software. Typically packaged as a software suite, CRM software can help eliminate the "old" way of doing things to make contact management more seamless and efficient. The bottom line with any business software that makes tasks more efficient is cost savings, which can boost your return on investment (ROI). Read on to learn more about CRM software, what it is and what it does, and examples of how a CRM system works. 

What Is CRM Software?

The goal of using CRM software is to improve your contact management. This includes all of your communication with clients and sales leads. Instead of pulling from multiple sources, CRM software is centralized so that all the information you need is in one place. This also makes it easier for your sales team to have a more efficient system. 

CRM connects all the data you have from your leads and customers so you're able to see an overall picture of your contacts. This includes integrating texts, emails, calls, meetings, and more. You can see all of your communication with a lead or customer easily.

Why Choose CRM Software?  

It's easy to become accustomed to the comfortable, familiar way of doing things and, typically, spreadsheets were the gold standard for managing customer contact. A spreadsheet is still a viable choice if you are a small business with less than 100 leads or contacts. However, if you have more contacts and leads beyond that, CRM is the best choice because of its features. It can be incredibly tough to keep track of many contacts using a spreadsheet.

With CRM, it can show you how hot or cold a lead is with lead scoring. Lead scoring isn't possible when using spreadsheets. This data gives you insight into whether you should keep pursuing a lead or not. Time is money in sales, and knowing that a lead has grown cold can help save time.

What Are the Features of CRM Software?

Customer relationship management software has many features that a spreadsheet cannot offer. For example, CRM offers automatic contact updates, data flow instead of static information, communications history including notes and files, lead scoring, automatic task reminders, and tag creation for actions taken and contact types. These robust features make CRM software an optimal choice for many businesses as these are features that a spreadsheet cannot execute. 

How Does a CRM Platform Work?

Solid CRM software should do more than collect information and keep it in a centralized location—it should also guide you to use that data to analyze, monitor, and improve your results. It should also focus your sales team on the hottest leads, shorten your sales cycle, and have automation features that can send communication to your contacts and leads when it is supposed to be sent.

For example, if you created a web form looking for leads and clients, your CRM software would analyze each lead and create different follow-ups for each lead, as some may be "hot" and some may be "cold," and there will always be leads in the middle as well. Your CRM software looks for parameters that classify your leads, so you don't waste much time on "cold" ones. Customer relationship management software also can send follow-up messages to your leads and contacts at a specific time.

What Are the Pros and Cons of CRM Software?

There are many benefits of CRM software, and they outweigh the cons of using the software. However, there are some tasks that CRM isn't meant to perform. A top benefit of using this software is it creates a sales and marketing engine that optimizes your marketing and sales across the board. 

When it comes to sales, CRM software offers greater visibility and better collaboration when it comes to your sales team. You and your team can see all contact information at a glance and any relevant data related to the contact. Combining CRM with voice-over-internet-protocol (VoIP) further boosts visibility for your inbound calls. 

CRM also makes prioritizing simple. Instead of pulling from multiple sources and trying to decide whether a lead is hot, the software helps organize your contacts so that you know who to contact first. Lead scoring is the feature that makes this happen. The software also allows for better follow-up. It can tell you exactly when to contact a lead or it can send out an automated follow-up with programming.

When it comes to marketing, CRM software allows for better insights. Its analytics can help a business see the largest lifetime value of customers compared to what the business offers. In layman's terms, this guides you on how to spend your advertising money, with the goal of savings. Insights can also analyze what customers are buying—this information can help you create sales bundles or packages to help increase revenue by promoting popular products. Deeper insights can also anticipate when a customer is about to buy so that you can plan contact and follow-up accordingly. 

Personalization is also a benefit of CRM software. Customers like a personal touch, and the software allows you to send personalized messages based on a customer's most recent activity. For example, if a cold lead opened an email or clicked on a link, your software will alert you to reengage with them. This would be a good time to have a sales rep call the lead for that personal touch or send personalized emails to try to reach full engagement. 

CRM software also allows you to try things out, such as promotions, ads, and other marketing tools. The analytics portion of the software lets you know what was a success and what was not. With trial and error, you can streamline and optimize your marketing. 

There are few "cons" with CRM software, but there are departments CRM isn't suitable for, and there are some things that CRM cannot do. 

For example, if a sales representative makes contact with a lead but neglects to enter it into the system, CRM obviously can't manage that lead. Mistakes such as these can affect the whole sales team. Also, the software isn't meant for the back end. This includes departments such as engineering, finance, production, warehousing, and shipping. 

Another thing to consider is whether you are opting for CRM as a suite or CRM software meant for data management only, which would be similar to using a spreadsheet, but with some more features. Unlike data management CRM, a suite allows you the analytics and many other features, such as quotes, invoicing, and sales and marketing automation. 

Overall, customer relationship management software is an excellent choice for most businesses, particularly those that have a larger-volume contact and leads list.

Last Updated: August 01, 2022