The Beginner's Guide to CRM: Customer Relationship Management

By Matthew Guay

You are reading: Chapter 1 of 5

Everyone knows what browsers, word processors, spreadsheets, email and chat apps are used for in a workplace. Maybe they were confusing when you first started using a computer years ago, but now they’re an integral part of your work. If you switched the app you were using, perhaps opening Safari instead of Chrome to browse the web or Google Docs instead of Word to edit documents, you might feel a bit lost at first but in general you’d know your way around. After all, you already understand web browsers and word processors.

But then, there’s a whole category of business apps that can be incredibly confusing when you first dive into them. You’ll hear of them in passing, see them mentioned in business articles, and puzzle over their abbreviations: CRM, ERM, CMS, SCM, and more. These three-letter apps are as opaque as three-letter agencies.

So, before diving into the apps and tricks that'll help you manage your contacts and more, let's take take a moment to break down one of the most common, most expensive and often most time-consuming of all three-letter apps. We're talking, of course, about the CRM.

Why a CRM? It’s All About People

People Business Handshake

You already understand the utility of email and address books. The former is a digital version of a letter, and the latter is a flatter and brighter Rolodex. CRMs are one step up from them both.

CRM stands for Customer Relationship Management, so by definition, a CRM is an app that helps you manage your relationships with current and prospective customers. Your email and address book already do that, in some ways—your email links related messages together, and lets you find all messages from a contact with a quick search, while your address book can hold as much info about your contacts as you want. Even the old-fashioned Rolodex was a CRM of sorts.

But a true CRM should do a lot more than that, thanks to the R in its name: relationship. Most CRMs are designed to help you string together the relationships in your contacts: the messages from the same person, the team of people you’ve talked to at the same company, the person on your own team who knows someone on your client’s team. They’ll help you see the big picture, and then know exactly what to talk about the next time you email someone—or what your colleagues have already asked them.

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. And 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, but a CRM can be your own internal network that helps you understand your customers and 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

As such, you could use almost anything to make a CRM of your own. You could have a cork board where you pin business cards and letters from your clients, with string connecting the relationships. Or you could use custom tags in Gmail and the info in your address book to approximate a CRM’s functionality. And then, when you want more, you can dive into the world of CRM software.

Which CRM is Best? First Narrow It Down to a Category


One of the biggest reasons CRM apps seem scary is that they’re so varied. All web browsers, on the other hand, have an address bar at the top and the main part of the screen is dedicated to your webpage. Similarly, almost all email apps have a list of messages on the left or top followed by a preview of the currently selected message.

CRMs, conversely, come in all shapes and sizes. They’re all designed with the same goal in mind: to help you understand your contacts better and act on that understanding. But the ways of approaching that challenge are as varied as office chair designs. Just as we all don't sit the same, we don't work the same. And today it seems there’s a CRM for every way you could possibly work.

Though they all tend to fall in broad categories—some in more than one of them—here are three of the many types of CRMs you’ll find.

1. Conversations


Email overload is a normal problem today, but you don’t have to see it as a problem. A CRM that’s centered on conversations can pull out the interactions, group them by the team or company represented in the conversation, and help you see exactly where to reply and follow up. It’s a smarter email app that turns your messy inbox into an organized place where you’ll actually stay in touch with the customers and contacts that matter most.

2. Leads and Deals


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. 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". 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.

3. Contacts


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’re designed to 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.

What's a Lead? Common CRM Terms Explained

You finally understand CRM, but once you try out a CRM app you'll find it's filled with new terminology: leads, deals, contacts, opportunities, and more. Here's some of the most common terms, along with a quick explanation of each.

  • Contact: The simplest of all, Contacts are the records for the people you’ve listed in your CRM. Just like in your address book, they can contain the names and personal info of your customers and clients. You’ll likely also see Company and/or Account in your CRM; 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 seem likely to want to do business with your team in the future. Leads are these special 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, 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—and so you’ll Quote them a price and the service or products they’ll get for it. That’s what Quotes are for—and no, it’s 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 are using your CRM app. Each of them may have a Role, or a particular set of permissions in the app.
  • Campaign: Marketing is one of the main reasons you’d use a CRM, and Campaigns refer to your marketing campaigns. As such, they’d list the contacts and companies most crucial to your next 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. 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. They’ll usually be listed in a Facebook-like news feed so you can look over them easily.

How Much Will a CRM Cost?

There are dozens of CRMs, and an equally diverse number of pricing plans available. CRMs are business tools, designed to help you make money and customized to fit specific types of businesses, and as such they’re going to cost more than your typical smartphone app, but they don’t have to break the bank.

The vast majority of CRM apps today are hosted web apps, and you’ll usually pay a fee per user each month—and can also usually get started for free. Most CRMs will let you get a free account with a couple users and enough features to test out the app thoroughly, and then you’ll want to upgrade once you bring in your whole team and start tracking everything in it. Then, full plans will likely somewhere between $15 and $30 per user per month for the average CRM aimed at small to medium businesses. There are both cheaper and more expensive options, and even a few open source CRMs like Odoo that you can run on your own servers for free.

It's confusing to pick between all the pricing plans, features, and options, so we'll help you break it down and pick the best option for your team in the coming weeks.

How Do You Make the Most of a CRM?

Whether you need an app that’ll tie your email threads together, one that’ll help you spot the influencers in your community, or one that’ll help you track deals and leads, a CRM will only end up truly helping you and your team out if you rely on it and find it necessary for your work.

“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.”

That’s why the best CRM apps integrate with the apps you’re already using. They’ll pull in emails and contacts, connecting the dots for you and leaving as little as possible for you to add. And often, the rest of the gaps can be filled in with a tool like Zapier.

“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.

"The key is to have the CRM become a productivity tool, and not a burden to people using it."- Jeremi Joslin, Collabspot Co-Founder

Then, with all the selection, it can be tough to pick one CRM for your team. You can try out a ton, but at the end of the day, it’s hard to make a bad choice. As Gray MacKenzie from GuavaBox says, “While window shopping can be fun, at some point you have to commit to a system to use.” There are tons of great CRMs out there today, all of which can help your business. The important thing is making sure all of your info is flowing into the app, so you can trust it to be the place you’ll always check first.

So that’s CRM in a nutshell. It’s a category of apps that helps you make order out of the chaos of your normal business interactions, letting you focus on your customers instead of always trying to find out what was said last. And while that sounds complex, 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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