The Beginner's Guide to CRM: Customer Relationship Management

By Matthew Guay - Last updated December 24, 2017 -

You are reading: Chapter 1 of 5

It's hard to imagine life today without the Contacts app on your phone. Phone numbers are hard enough to remember, let alone the email and mailing addresses for everyone you know. So we outsource that to our phones, letting them remember everyone's contact info. All we have to do is say Siri, call bob.

You need even more help with your business contacts—and your address book app isn't enough. In addition to names, phone numbers, and addresses, you need to track the products people are interested in, what services they've purchased from your company, the company they work for, and more.

That's why you need a CRM, a Customer Relationship Management app.

What is a CRM?

People Business Handshake
A CRM will help you know what to talk about the next time you meet a client.

Customer relationship management software are tools to organize your contact info and manage your relationship with current and prospective customers, clients, and other contacts. They're address books on steroids—the modern version of old-fashioned Rolodex.

A good address book app like Google Contacts lets you list your contacts, add detailed contact info, write notes about each contact, and find email messages they sent you in Gmail. You can even organize contacts into groups, perhaps to keep customers in one list and new leads—people interested in your products—in another.

A CRM app will do that and more, thanks to the R in its name: Relationship. CRM apps typically are built around relationships. They'll help you find all your contacts who work for the same company and any messages that have been sent about your work with that company, and show you who on your team was in contact with them last so you can get an intro. A CRM will help you get the big picture of your contacts, and help you know exactly what to talk about the next time you meet or email someone.

Marketer Jennifer Burnham summed up the importance of the R in CRM when she wrote on the Salesforce blog that “while a CRM system may not elicit as much enthusiasm these days as social networking platforms like Facebook or Twitter, any CRM system is similarly built around people and relationships.” It's true. A CRM is like your own mini social network filled with details about the people most important to your business.

It wouldn’t do much good to like or follow all of your customers' pages on Facebook and Twitter, respectively, as those networks are designed for personal relationships. A CRM's your next best bet, your own internal network that helps you understand your customers, clients, and your own team.

"While a CRM system may not elicit as much enthusiasm these days as social networking platforms like Facebook or Twitter, any CRM system is similarly built around people and relationships."- Jennifer Burnham, Marketer

You could make your own CRM, perhaps with a cork board with contacts connected by string. Or, you could add more details to your address book, using Google Contact's notes and tags to organize contacts and save more details.

A better idea is to use a CRM app, software designed specifically for contact relationship management. There are dozens CRM apps, from Salesforce to HubSpot CRM, Infusionsoft to Highrise. All are great for managing contacts—each with their own features focused on specific use-cases. So before you go shopping for a CRM, you'll need to decide what type of CRM your business needs.

Which CRM is Best? The Four Main Types of CRM Software

CRM software icons
There are dozens of great CRM apps—each designed for different workflows

CRM apps can feel scary. One glance at Salesforce's dozens of fields and options, and you'll be ready to flee back to Google Contact's familiarity.

But they don't have to be so confusing. The same core ideas underpin every CRM—they're each designed to help you understand your contacts better, and then put that knowledge to work. But we don't all work the same. Some teams just need a quicker way to get in touch with clients; others need to approach each contact as a project, working for weeks to get a sale. And some might just need a better way to document interactions, so you don't follow up with a contact the day after a colleague did.

Here are the four main types of CRM software:

1. Conversation CRM

SalesforceIQ screenshot
Conversation focused CRM apps like SalesforceIQ are built around your team's emails and phone calls with customers

Email doesn't have to be overwhelming—at least, not with a conversation CRM. These tools are built around the conversations your team has with your customers and contacts.

They'll watch each of your team's email inboxes, or let you CC the app on your conversations. Then, the CRM will organize every conversation from across your company into the correct contact's profile. You can then easily see what other people in your team have talked about and refresh yourself on what to say before emailing or calling a client.

Conversation CRMs are like smarter team email apps that turn all the messy inboxes across your company into an organized place that helps you stay in touch with the people who matter most.

Compare 5 of the best Conversation CRM apps

2. Leads and Deals CRM

Pipedrive CRM screenshot
Lead and Deal focused CRM software help you close the deal with your most promising leads

At the end of the day, business is business, and moving the needle with sales is what makes paying for a CRM worthwhile. That’s why so many CRMs put leads and deals front and center—they're the most popular type of CRM.

In a Lead and Deal CRM, you’ll track potential customers and clients as "leads", add info as you work on convincing that customer to use your product or service, and then turn that lead into a "deal" once they've decided to buy your products or services. The CRM helps you log the steps, tracing the interactions that led from the first contact to the finalized deal, and is crucial for working together in a sales team that otherwise would struggle to know exactly where the deal stood at any given time.

It's a project management app for your sales team, built around the contacts and the next tasks you need to do with them.

Compare 11 of the best Lead and Deal CRM apps

3. Contact CRM

Highrise CRM screenshot
Contact focused CRM apps like Highrise are the easiest to use, with their familar focus on contact details

Sometimes it’s the human touch that counts most. When you know something important about your customer—their birthday, their current position, or that dish they ordered the last time you met for lunch—you’ll be much more likely to make a lasting connection.

That’s where the contact-centric CRMs come in. They help you gather as much info as you can about the people you’re talking to. You’ll log interactions and write notes, and then when you’re set to talk again, you’ll pull your CRM up first so you’ll have their info fresh in your mind.

They're the simplest, and often cheapest CRM tools—and since they're focused on contacts, they're the easiest to use, with designs far more similar to Google Contacts and other address book apps.

Compare 11 of the best Contact CRM apps

4. Marketing CRM

HubSpot screenshot
Marketing CRM tools like HubSpot help you put your data into action, automatically emailing contacts and more

With all of your contact data in one place, it seems like your CRM could do something with it automatically. And if you have a marketing CRM, it can.

Marketing CRM software typically include similar tools to contact or lead and deal CRM apps. They then also include automated workflows that help you, say, automatically send an email to a lead the day after they click a link in a marketing email you sent them. Or, perhaps, they could tag a lead as interested when they've opened 4 of your emails—notifying your team that it's time for the personal touch. These apps tend to be a bit more expensive than their competitors, but can also help you close your next sale faster.

Compare 10 of the best Marketing Automation CRM apps

What's a Lead? The 9 Most Common CRM Terms Explained.

Salesforce screenshot
Feel lost when you open a CRM? These are the terms you need to know to find your way around.

Now that you understand CRM software, it's time to learn the lingo. CRMs are filled with new terminology that you might not be familiar with if you've never worked in sales: leads, deals, contacts, opportunities, and more. Here's some of the most common CRM terms, along with a quick explanation of each:

  • Contact: The simplest of all, Contacts are people. Just like in your address book, a CRM's contacts they can contain the names and personal info of your customers and clients. You’ll likely also see Company or Account in your CRM alongside Contacts; these are specialized contacts for the organizations you work with, and you’ll likely link your individual contacts to a Company or Account.
  • Lead: Some contacts are special: They're people who seem to want to do business with your company in the future. Leads are the people to whom you’ll want to pay particular attention.
  • Opportunity: Turns out, that lead was really interested, and you think you’re going to be able to sell them your product or service. Now they’re an Opportunity, someone actually likely to buy your product, and you’ll want to list info about what exactly this opportunity is and track it in your CRM.
  • Quote: You’ve worked with a Contact, turned that Lead into an Opportunity, and now you’re almost ready to make a deal—so you’ll Quote them a price and the service or products they’ll get for it. That’s what Quotes are for—the place to list the price you quoted to potential customers, not the place to store your inspiring business quotations.
  • Deal: Everything worked out and you’ve sold your product—or perhaps it didn’t, and the Opportunity fell through. You’ll track both of those with Deals, which will show your Won and Lost Deals.
  • Profiles: Typically, these would be the people inside your own company that use the CRM app. Each of them may have a Role, or a particular set of permissions in the app—your sales team might not have access to your Suppliers list, say, while perhaps only HR can edit details on your team Profiles.
  • Campaign: You'll likely use use a CRM for marketing, and this is where you'll track that outreach. Campaigns are where you'll track your marketing work. Each campaign will list the contacts and companies most crucial to that marketing campaign, along with results, notes, and more.
  • Tag: Similar to tags in Gmail or metadata on your photos, tags give you a way to add extra info to a Contact, Deal, or anything else in your company's CRM. This extra data gives you more ways to filter and sort through your CRM.
  • Activity: Activity in a CRM typically refers to anything that’s happened in the app—new Deals, Contacts, Opportunities, or perhaps just a message from your colleagues. Activity is usually listed in a Facebook-like news feed so you can look over them easily.

How Much Will a CRM Cost?

CRM apps' pricing are as varied as their features and design—so there's guaranteed to be a CRM that fits your business.

If you're worried about price, your best bet is a free CRM app—and there are quite a few to choose from, typically contact-focused tools. HubSpot CRM is one of the best, as a full-featured contact CRM that lets you store up to a million contacts for free. Many others, like Zoho CRM and Cloze, let you store up to 25,000 contacts for free, plenty to get your business off the ground. Or, open-source CRM apps let you manage contacts on your own server for free.

When you're ready to buy a more full-featured CRM for your team, you'll typically need to spend from around $5 to $75 per user per month, depending on the app you choose. Contact CRMs are often the cheapest, ranging from around $4-12 per user per month. Conversation CRMs tend to cost around $15-$30 per user per month, while Lead and Deal CRMs can go from around that price to $75 a month per user or more for tools like Salesforce. Marketing Automation CRM apps are often the most expensive, often costing nearly $100/month per user—or perhaps just under $800 for HubSpot for a full team.

→ Compare the best CRMs and their pricing in our roundup of the best CRM software.

How Do You Make the Most of a CRM?

"The CRM is there to help people do their jobs better and faster. Otherwise, nobody is going to update or maintain it."- Jeremi Joslin

Whether you need an app that ties your email threads together, helps you spot the influencers in your community, or a tool to track deals and leads, your CRM will only end up truly helping you and your team with customer management relationship if you actually rely on it.

“The key is to have the CRM become a productivity tool, and not a burden to people using it,” says Jeremi Joslin, the founder of Collabspot. “The CRM is there to help people do their jobs better and faster. Otherwise, nobody is going to update or maintain it.”

So don't keep using your address book to manage contacts, and your notes app to write down what was said during a call. Once you have a CRM, use it for that. If the CRM is the place you list everything about your customers, it'll quickly become a core part of your work.

Then, you'll want to integrate your CRM with tools like Zapier that can add new contacts to your CRM automatically or log calls, meetings, and more to your contact profiles. “I'm someone who absolutely hates data entry and wasting time on manual processes that could be done automatically,” says entrepreneur Matt Mireles. “Zapier allowed us to automate a ton of stuff.”

It’s automation like that, whether built-in or from another app, that lets you rely on the CRM to be the one place that has all of your contact info. You should never feel like you have to go search another app for relevant info; the CRM should be the the repository for your team’s customer interactions.

Then, with all the selection, it can be tough to pick one CRM for your team. So try a few, see how they fit your work style—and decide which type of CRM your team needs. Then at the free trial period, pick one CRM and commit. As Gray MacKenzie from GuavaBox says, “While window shopping can be fun, at some point you have to commit to a system to use.”

That's when the real work of making new leads and closing new deals begins.

So that’s CRM in a nutshell.

CRM apps can help you make order out of the chaos of your interactions with people, letting you focus on your customers instead of always trying to find out what was said last. The software can look intimidating, but it’s really not that much more complicated than your standard email and contacts apps—and once you learn to rely on the CRM, you’ll likely find it takes you less time to use than your old email search habits.


Now that you know you need a CRM, it's time to find a CRM that'll work great for your needs. In Chapter 2, we'll look at the best features from over two dozen of the most popular traditional CRM apps, while in Chapter 3, we'll look at features from the best CRMs that can also automate your marketing.

Go to Chapter 2!

Want more great apps for your business? Check out our guides to other apps: "The 14 Best Online Form Builders for Every Task" and "The Best Team Chat App for Your Company".

Rolodex photo courtesy Myles Grant.
Handshake photo courtesy Big Omaha / Malone & Co.


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