What is CRM?

A beginner's guide to customer relationship management

Chapter 01: What is Customer Relationship Management (CRM) Software?

CRM is defined as customer relationship management and is a software system that helps business owners nurture their relationships with their clientele. A CRM also assists with organization, efficiency, time management, and impressing clients every step of the way.

CRM software has been around since the mid-1990s, but has come into its own over the last decade. CRM platforms are powerful systems that connect all the data from your sales leads and customers all in one place. A CRM records and analyzes all calls, emails and meetings, helping improve customer service, drive sales, and increase revenue.

You can get personal at scale as you delight every one of your prospects and customers with just-for-them messages. You can track, segment and slice the data to make your sales and marketing smarter, more potent and more efficient.

Customer relationship management is a literal description of what CRMs do, but those three bland words don't tell the whole story. Without software designed to help stay on top of the details, business owners can run themselves ragged trying to keep up. This has firmly established CRMs like Keap as a must-have for small business owners who want to improve relationships with their prospects, clients, and other contacts.

The sheer volume of data that you can track for each individual user in a cloud-based CRM system is staggering ― and exciting. Let's look at the details.

Chapter 02: What does a CRM System Do?

Contact management on a vast scale is the core function of any customer information system, whether it's cloud-based CRM or CRM software on your server. You want to store and manage data for every kind of contact, from leads to business partners.

Many small businesses still struggle with spreadsheets, inboxes, (or sticky notes!) to track these kinds of relationships. But at some point, those “systems” just can't keep up. If you have a hundred contacts or more, it’s time to try a CRM like Keap for your small business.

Each of these fields can be updated, tweaked and customized as you go to fit your needs.

With an old Excel spreadsheet, you might track:

  • Name
  • Email
  • Phone number
  • Website
  • Address
  • Type of customer
  • Date purchased

With a CRM, you can track all that plus:

Only have a customer name and email address? That's enough to use CRM as a simple contact management system. A good CRM lets you add activities that you've planned or completed, like follow-ups with new prospects, and then track data on what kinds of replies have (or haven't) worked so far. Voila: you've got a valuable strategic task manager.

Add notes on who makes decisions at each business you sell to, and you have a leg up on a meaningful, data-driven sales strategy. Add industry information and company size and you can segment customers by channel.

The best CRM software shows at a glance how hot or cold a lead really is. The more data love you give your CRM, the more it loves you back.

Chapter 03: How does a CRM Platform Work?

As a company generates qualified leads, a CRM tracks the actions of a potential customer through social media, email, and website channels. The system absorbs as much information as possible on leads before guiding them—or helping you guide them—through a planned journey that hits all the hot spots.

For example: Suppose a local resident is looking for someone to paint their house. They contact a remodel and repair business, which asks about the reasons for the paint job, the planned budget, and the location of the work. All of this information goes into the company's CRM.

If the potential client indicates a specific reason or timeline for the paint job and also mentions their house is in need of more repairs, the business sees the full opportunity for a sale. This may trigger a series of events, from an automated email with a video showcasing the company's work to a follow-up call scheduled for 48 hours later. If the CRM shows that the person revisited the company's website, another chain of sales steps may be triggered.

Conversely, if this lead offers information that suggests they're now looking for paint at local stores to do the work themselves, this lead might fall out of the funnel. In that case, the CRM will downplay the lead and direct the sales team's time toward more likely prospects.

In the end, that's one of the biggest benefits of a CRM system: it aims a company's time and efforts in the most profitable directions, rather than in a scattershot “talk to everyone and hope for the best” approach.

Chapter 04: Benefits of CRM Software

The benefits of a CRM system are available to salespeople, marketing teams, customer support specialists, and anyone who comes in contact with customers at large companies as well as small businesses.


Perhaps the biggest benefit is organization. As you transition to the system, you'll enter basic contact information such as phone numbers, email addresses, and preferred contact information. Once your CRM system is up and running, users can follow and track basic information and advanced data about every single customer.

A CRM system is a central place to store and manage all information, and that makes life easier for everyone. And "everyone" includes your customers, who get better service and more detailed attention as you begin to understand them more deeply.

Task Tracking

The right software integrates a company’s typical workflow and saves time spent on daily tasks. Automation can boost customer engagement and provide consistency. The truth is, consistency is one of the unsung benefits of a CRM system: When customers get mixed messages, they quickly grow confused instead of enthused.

More Sales Opportunities

Nobody wants to stop at 1,000 customers. But sometimes companies struggle to come up with great ideas to grow that customer base. One way is to learn more about the people who are already customers; a CRM system can track purchasing patterns and provide insight into themes and trends. That kind of analytics can help develop micro-targeted plans and strategies for encouraging more sales at specific times.

Tracking Sales Progress Across Your Organization

Sales management. In addition to managing the customer base, a good CRM is also robust enough to track sales progress for your whole organization. If you're a one-person shop, you get the help you need to track leads and follow up. If you have a large sales team, each new set of leads is assigned to a sales rep and their journey is tracked from that point on. As the journey progresses, the CRM platform provides a starting point to act on sales trends and close gaps. It's also an easy way to track the performance of your sales team itself.

Personalize Communication

In addition to more efficient use of sales resources, your customers can benefit from the personalization features many CRM tools offer — a huge advantage when 86% of consumers say personalization played a role in their purchasing decision, according to a study by Infosys. All of that data in your CRM database can be used to build deeper customer relationships through personalized communications. A way to do this is by addressing customers by their first name in emails or creating nurture campaigns based on industry.

Increased Retention

Another way CRM can benefit sales is that it exposes who your highest revenue-generating or most engaged customers are. You may be able to identify a subset of customers who attend webinars or open all of their emails through a CRM. Why not reach out to them to advocate on your brand’s behalf? A CRM can also increase retention among your existing customers. Through a CRM and its ability to aggregate customer behavior, you may be able to spot patterns like when a customer is about to churn. Having insight into customer behavior can help you develop a plan or program to retain at-risk customers.

Chapter 05: What is CRM marketing?

Marketing and sales go better with a CRM. Sales staff can work on their own more efficiently and work together more smoothly. Who spoke to a prospect last? What did they talk about? What's the next step? A good CRM knows and will assign a score or a value to each prospect in your pipeline and give you weighted sales projections.

What is CRM marketing worth? A recent report compiled by IBM showed that businesses scored a 65% sales quota increase when a CRM was adopted.

Once you can identify your most profitable customers, you can delight them with perks that help them feel even more valued. Target and refine your marketing campaigns by customer needs so they receive only the information they want to know about.

The mighty merge

Merge fields can play a mighty role in your email marketing. A merge field takes a contact or business name from custom fields and drops it into your email blasts. Result: personalized emails on a massive scale.

Hi John Smith,

We are so excited to have XYZ Enterprises as a new customer! Thank you for doing business with ABC Company,

Sarah Jones | [email protected]

The bolded text above was all populated automatically. The best CRM software offers robust automation, so you can not only insert fields, but trigger entire emails, reminders and appointments based on criteria you set. These all-in-one CRM solutions take your business to the next level. Getting all of your information in one place helps save time and can help your business earn more money through strategies like quickly following up with potential customers or following up on an unpaid invoice - all automatically.

Chapter 06: How do small businesses use CRM?

Customer relationship management gives you a full view of your sales, marketing, and support for every customer. That's especially helpful for small businesses, which may have just a few people—or even just one—who need to track activity on all those fronts.

And for those who run service businesses, meeting with prospects and clients is a critical step in building trust, selling your services, and scaling your business. But scheduling and managing meetings can feel like a time-consuming chore. Back-and-forth phone calls, emails, and texts to find a mutually beneficial time to chat can drive anyone crazy. Then, more time is lost when calendars don’t sync or when there are scheduling miscommunications.

As a small business owner, it’s important to get the most out of every precious minute and dollar you spend. Time is money and you need to effectively manage both to run a successful business. Implementing a CRM system is a great way to streamline your marketing efforts, saving you time as well as increasing your revenue.

While this goal is not unique to small businesses, the features you look for in a CRM will be different than the needs of a 1 to 2-person start-up, or a large business with more than 500 employees.

When choosing a CRM system for your small business consider the following elements:


A CRM system that lets you record sales calls, opportunities, and the name and title of the VP or product manager you talked to. Most CRM systems have activity reminders that prompt you to follow up later. The journey of every potential buyer can be monitored on their way to closing. (Or not! Stalled deals are easy to see, so managers can look for ways to move them along.)


One that allows you to use CRM contacts to learn where your company is winning and losing ― and then target promotions and generate leads accordingly. Lead scoring and email follow-ups are automatic, leaving you free to focus on the creative ideas that win new prospects. Another benefit is that you can actually decrease marketing costs with a CRM because you can narrow in and focus on your target audiences and spend your time selling to them.

Support and service

If you've noticed cracks in your customer service, a good CRM management can repair that relationship for the long term. Post-sales support can get a boost, to, as the data helps resolve problems and explain what might not be otherwise understood.

The customer

E-commerce options in the best CRMs let customers create and place their own orders. Add-ons should be easy to use so that customers can buy quickly. That way you—or your employees—get an early “heads up” if a customer is having issues. A quicker response cuts the chances the buyer goes elsewhere.

Data management

It’s time to ditch the spreadsheets as a data solution. Instead, look for a tool that houses all your client activity and communication in one place. You want the ability to import current contacts into the CRM, organize those contacts with detailed records (like order and account balance, lead score, and website activity), and segment them based on demographics and behavior to personalize marketing communications.

Lead scoring

Not all leads are created equal, so let your CRM software do the heavy lifting and identify the most qualified leads. Lead scoring ranks leads based on interactions and engagement with your communications, so you can focus on and follow up with leads that are ready to become customers.

Task Management

Centralize action items with a CRM that also offers a calendar and other task management tools to allow you to schedule appointments, set reminders for tasks, and create to-do lists.

Email integration

Managing leads and closing deals in a separate system, like your inbox, can cause confusion and duplication. However, instead of completely abandoning your inbox as a channel, look for a CRM that connects with Gmail or Outlook to automatically update contact records with every sent or received email message. Even better, look for the ability to add notes or trigger follow-up actions.

Mobile accessibility

Business doesn’t stop as soon as you walk away from your computer, so find a CRM solution that can complement your on-the-go lifestyle with a robust mobile app. You want the ability to access and manage your CRM to edit contact information, add tags, trigger automated follow-up, activate campaigns, and communicate with your customers - all from your smartphone.

Chapter 07: Putting “Relationship” in Customer Relationship Management

Remember: it's not the customer you're managing, it's the relationship.

With a central memory for all your contacts and customer history, you'll be sure to deliver excellent service even when key staff leave or accounts get moved around. When a customer wants to place a repeat order, that order history is readily available. No digging, no calling, no cursing.

CRM systems also work smoothly with VoIP telephone systems. A customer's record, triggered by their phone number, appears on the customer service rep's computer screen instantly. Talk about a better experience!

Chapter 08: How do I get started with CRM?

Adding a CRM information system to your small business doesn't have to be daunting. The first step is to collect all your existing contacts in a .CSV file. Most CRMs will guide you on how to set it up.

Next, import and map all your contacts. Then you're ready to start crafting your custom emails, follow-ups, customer segments, pipeline stages and the rest of your daily business approach.

Some CRM companies have consulting teams, and it can be helpful to bring them in for veteran insights into best practices.

The final step: train yourself and your staff. Change can be hard, and some "CRM pushback" is not unusual. Here's help: download our free CRM Adoption Acceleration Checklist to bring everyone on board.

Chapter 09: How long does CRM take to see value?

The right CRM software starts to create value the moment you enter your first lead. For best results, make sure that all leads are processed through your CRM. (That's one way to get everyone in your company comfortable with it, too.)

Now you can see which reps are killing it and which have bottlenecks. Or monitor deal progress and brainstorm with reps on how to move stalled deals along.

On a meta level, watch your pipeline to see if the leads and deals in the process are enough to support your revenue and cash flow goals.

Chapter 10: Does CRM affect large and small businesses differently?

CRM is your marketing memory however big or small your business. Large businesses use it to collaborate when a global team is assigned to a single customer or deal. They also use CRM to instill discipline in the sales force.

Smaller businesses often use CRM systems as a data engine for marketing campaigns. The built-in efficiencies and sales journey tracking are often the most valuable aspect for them.

Whether your business is large or small, the effect is the same. The detailed contact records CRMs provide give you all the information you need about your customers in one place. Your business will run smoother when you have the right data in your hands right when you need it. That data is powerful for any business, enabling you to save time on customer follow ups, increased revenue as you create personalized customer experiences, and more. When you have a data driven business culture facilitated by a CRM and marketing automation system, you'll be able to provide better customer service, which can result in higher revenue from being able to follow up faster.

Chapter 11: What can't a CRM manage?

CRMs are customer-facing. In general, they won't help with production, warehousing, shipping, engineering or finance.

Some CRM systems include order entry or invoice generation tools, but systems designed specifically for those tasks are likely to serve you better; you won’t have to force your CRM into performing tasks it's not built for. In fact, research identifies lack of focus as one of the top three reasons for CRM failure. An all-in-one CRM system like Keap has features such as marketing automation that can systemize tedious tasks.

And of course, a CRM can't manage what it can't see. So if people work leads or deals outside the system, that lowers its effectiveness for everybody.

Here's a fantastic list of CRM tools that will supercharge your system.

Chapter 12: Final thoughts

Customer relationship management systems give you deeper insights, boost customer satisfaction, and help you sell more. You'll offer the personal touch as you reach out to every lead and customer, and that's the quickest route to happier customers.

Intrigued? Learn more about how an all-in-one CRM like Keap can make your life easier and more productive. View our three CRM software plans and start a free trial, no credit card required.

Want to grow sales and save time with automation?

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