CRM. If you work in sales or marketing, you've probably heard this three-letter acronym tossed around before. Maybe you've even been told you need one. No matter what, you're curious about one thing: What does it actually mean? And how do you know if you need it?
What Is CRM?
CRM, or customer relationship management, refers to software that lets companies track every interaction with current and future customers. CRM doesn’t refer to a specific set of features or a brand. It’s a catchall term for any system that allows this kind of tracking, so the software itself is usually just referred to by the acronym 'CRM.'
A CRM’s capabilities vary from system to system. Almost all CRMs can store prospect and customer contact information. Some can log calls and emails sent to prospects, pull in prospects’ social media profiles, and include space for users to enter additional information.
More sophisticated CRMs can enrich prospect information, allow reps to schedule meetings within the app, visually display a sales team’s pipeline, and provide sales forecasts.
Regardless of the features in place, the goal of implementing a CRM is to create a system that your company (most often the sales and marketing teams) can use to more efficiently and effectively interact with prospects or customers.
Marketing will often use a CRM to ensure that they're rotating the right leads to sales -- a key aspect of developing a strong relationship with the sales team. On the sales side, having the entire prospect history in one place saves a ton of time and improves productivity. For instance, reps won't have to hunt through a bunch of different programs to figure out who they should be calling next.
Today, most CRMs are in the cloud, making it easy for your company to install and maintain your system. Instead of installing and hosting the software on your company's servers, you typically pay a monthly subscription fee to get access to your CRM in your web browser.
The next question people ask after they learn about CRMs: Do I need one, too?
Do You Need a CRM System?
The short answer is yes. Every company is in the business of growth, and CRM software enables companies to do just that.
Here’s the long answer: If you ever plan to scale your business, you need tools that grow with you. You could manually track everything a CRM records, but as your sales team and customer base grow, manual data entry will become a huge drain on your employees’ valuable time. Different salespeople’s records aren’t guaranteed to be complete, much less include the same information or follow the same format.
It’ll be extremely difficult to gauge company-wide performance or analyze past activities to inform your current playbook. Your ability to grow depends on enabling your whole team to contact prospects at the right time with relevant information, and you simply can’t do this efficiently without a CRM.
How Do You Decide Which CRM Software to Get?
There are many CRM options out there that could work for your business. It all depends on which features your business needs most. Here are a few questions to ask yourself to help you figure out which CRM you should get:
- Does your sales team have a clear process for whom to call and when? If not, you might want a CRM that gives them insight into which prospects are most engaged.
- Does your company work on large B2B deals that require you to interact with many people inside one organization? You might want a CRM that can easily pull and organize someone's data based on the company they work for.
- How do you primarily interact with leads: by phone, email, social media, or a combination? You should find out how different CRMs could make prospect interaction easy for reps.
The best way to figure out what you need right now is to talk with people both high up in your sales organization and those on the ground floor. That way, you'll find out what features your team will need as a whole and in the day-to-day. (Pro Tip: Use this list as a jumping-off point for discussions about CRM features you'd like to have.)
What's the one feature pretty much every company will need? A sound integration between your CRM and marketing software. For you to properly communicate and track your company's prospects, leads, and customers at every stage of the buying journey, your technology needs to play nice together. (HubSpot customers: The HubSpot Marketing and Sales Platforms are closely integrated, so it's easy for you to capture, score, and hand off leads to Sales. Click here if you'd like to try the free HubSpot CRM.)
The moral of the story here is this: If you’re running a business and intend to keep growing, you should get a CRM. Your success depends on being able to delight your customers. Knowing as much about them as possible, delivering rapid responses to their inquiries, solving problems quickly, and delivering a personalized experience in which a customer feels special will help you delight your customers -- and ultimately, help you grow.
For a handy visual representation of the power of CRM software, check out the infographic below. And if you're ready to pull the trigger on a CRM, check out HubSpot's free CRM software today.
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To learn more about CRM, check out our dedicated "What is CRM?" page.
Editor's Note: This post was originally published in August 2013 and has been updated for accuracy and comprehensiveness.