What is CRM software?

Customer relationship management (CRM) software is designed to help businesses implement and maintain customer-centric strategies that optimize profitability, revenue and customer satisfaction. This buyers guide provides the information necessary to select a CRM platform that best suits your particular business requirements.

Here's what we’ll cover:

Types of CRM software

The first step to selecting a CRM platform is determining which areas of your business a CRM needs to operate in. Typically, CRM applications are leveraged by four primary business segments: sales, marketing, customer service and digital commerce.

Sales - CRM tools focused on sales help users save time and improve engagement throughout the entire sales funnel. Sales force automation is the most common CRM feature requested by sales teams, which involves automating tedious and repetitive tasks to make sales activities, processes and administrative responsibilities more efficient and effective. Common uses include personalized outreach emails that are sent automatically, lead management, customizable CPQ automation, and more.

Marketing - Improving your organizations marketing to sales alignment is the aim of marketing centric CRM. This allows advertising dollars to be spent more effectively by helping syndicate appropriate messaging at the correct stage in the sales cycle. Analytics and interaction tracking are common components of marketing specific CRM software functionality.

Customer Service - Customer service-oriented CRM helps improve how customers experience service and support team interactions. This could mean faster and more reliable case resolution thanks to more robust customer profiles, or personalized customer experiences across channels (e.g. phone, chat and social). The specifics depend on your business needs, but the ultimate goal is efficiency and positive customer experiences.

Digital Commerce - CRM focused on digital commerce helps businesses make personalized shopping cart recommendations, enhance marketing efforts by incorporating online sales data and extends some benefits of e-commerce to physical retail (e.g. real-time inventory access, more flexible delivery and return options, online only product offerings made available for in-store purchase).

Depending on your business plans or strategy one or all of these business segments may need to be addressed by any CRM software you're considering for purchase. These categories are also helpful when interacting with vendors as CRM product functionality is commonly sorted by business segment.

Key questions to ask a vendor before you buy: Does your product portfolio have solutions geared toward [select all that apply: sales, marketing, customer service and/or digital commerce]? What kind of [select all that apply: sales force automation, marketing automation, case resolution and/or real-time inventory access] features does your solution offer?

CRM software suites vs. unified offerings

While the four segments outlined above useful when delineating CRM functionality, not all vendors market their products to specific business segments. Some vendors offer a single piece of software as a unified CRM solution. Typically these offerings are sales focused however, some vendors sell marketing, customer service or digital commerce specific solutions.

These platforms prioritize simplicity over rich functionality, and are worth considering if your business simply wants to modernize its approach to contact management, pipeline management, activity/goal tracking and sales reporting.

If your business requires CRM functionality that covers more than just sales, consider vendors that offer software suites with broader functionality. Large providers such as Salesforce have products specifically geared toward sales, marketing, customer service and digital commerce that can be purchased in bundles based on your needs. Additionally, consider which features are not immediately pressing but may be required in the future to ensure you select a platform that can grow alongside your business.

Key questions to ask a vendor before you buy: Is your CRM software sold as a suite or a single unified platform? Will your solution be able to help with my [select all that apply: sales, marketing, customer service and/or digital commerce] needs as my business grows?

Deployment of CRM software

According to Gartner, in 2018 over 85 percent of CRM software was purchased not built and over 70 percent was deployed as software-as-a-service (SaaS). The cloud vs. on-premise debate is over. While on-premise CRM allows data to be self-hosted on company servers, the costs and complexity associated with deploying and maintaining these solutions is prohibitive or unnecessary for most businesses.

Focus instead on cloud-based CRM sold as a subscription service that provides online system access and stores data on servers maintained by a third party.

Key questions to ask a vendor before you buy: How are users notified of maintenance or planned downtime? What kind of track record does your platform have for unplanned downtime?

Common features of CRM software

Avoid dwelling on the long and sometimes confusing list of things CRM can do, and instead concentrate on core features that will ensure your software needs are met now and in the future.

Contact management - At its core, CRM software allows businesses to collect and organize client contact information in a centralized database. Modern contact management extends beyond being a digital Rolodex, offering robust features such as:

Lead capture and monitoring throughout the sale pipeline. Customer interaction tracking from first contact to sale, and beyond. Scheduling and follow-up reminder automation.

Analytics - CRM analytics collect, organize and synthesize customer data captured from a variety of sources. Data is then interpreted using reporting tools, dashboards, portals and other methods to provide actionable insights and made available to multiple users across an entire organization.

Mobile access - With 81 percent of CRM users now accessing software via a mobile device, smartphone compatibility is must. This is particularly relevant to remote or traveling sales teams that depend on mobile device access to do their jobs effectively.

Customization & Scalability - Any CRM should be customizable to fit your business's needs and budget. This could mean offering à la carte software additions that increase functionality over time, deeper customization to create tailored layouts/workflows or integrations with other software your business is already leveraging. Weigh the scalability of the software against your planned business growth.

What are some important CRM software integrations?

CRM integrations are the key to ensuring your business extracts the most value from its software and data. The list below, though not exhaustive, covers the essential integrations that you don't want to miss.

Integration: CRM + email

Email integration is a standard feature of any CRM, and vendors you're evaluating should at the very least be compatible with major services like Gmail and Outlook. The benefits from CRM and email integration span sales, marketing and customer service and include:

Triggers to automate emails for customers at different stages of the sales funnel.

History of all email communication that syncs automatically with your CRM.

Segmented mailing lists that better target marketing campaigns based on customer status.

Integration: CRM + marketing

Integrating CRM and marketing software helps personalize messaging and content to ensure customers receive appropriate advertising based on their stage in the sales cycle. Benefits from integrating marketing data with your CRM include:

Reaching customers at earlier stages in the sales cycle and providing better targeted advertising from awareness to retention.

Two-way sync between lead source data from your marketing app and your CRM's contact management database.

Improved analytics powered by a more complete view of the sales cycle. Discover which marketing campaigns led to the most closed deals.

Integration: CRM + accounting

Sales representatives should be fully aware of a client's financial standing with your company to avoid coming across as uninformed (or worse: unconcerned) when interacting with clients. This information is also incredibly valuable when tailoring sales tactics and strategy to particular customers. An integration between your CRM and accounting data provides:

A centralized repository for client purchase histories.

Automated invoicing to help close outstanding account balances.

Improved analytics powered by historical spend data, leading to increased sales opportunities and more effective marketing.

Integration: CRM + customer service

CRM and customer service go hand in hand, and integrating them ensures no matter when, where, or how a customer contacted your company, you'll have a record of the interaction. Integrating your CRM and customer service software enables:

More informed customer service reps due to synced customer support and sales data.

Insights into previous customer service tickets that can help inform the sales cycle.

Triggers for customer service events that initiate CRM actions (or vice versa).

Rather than looking at CRM in isolation, consider any software integration as single piece of a larger puzzle. This will help prevent your business from missing valuable integrations and purchasing software with duplicate functionality.

Keep in mind the costs and complexity associated with vetting, deploying and integrating applications from multiple vendors. Additionally, ensure your business has the IT resources to configure and maintain the CRM integrations required to get the most out of your software purchase.

Key questions to ask vendors: What [select all that apply: email, marketing, accounting and customer service] integration(s) are available with your software, and what are the resource requirements for maintaining them?

What are some common features of CRM software?

Below we will cover some emerging trends in the CRM universe, as well as functionality that is fairly commonplace, though not yet part of CRM's core feature set.

Common CRM software features

Core CRM functionality includes:

Contact management - Allows organizations to store and find contact information such as names, addresses, and social media accounts.

Interaction tracking - Tracks notes and history to document conversations with specific contacts.

Pipeline management - Provides a pipeline view and facilitates the tracking of lead statuses.

Additionally, many CRM platforms will also offer the following common features:

Quote management - Enables users to create and send a quote or proposal to a customer.

Lead generation - Manages the process of converting prospects into potential interested customers.

Workflow automation - Automates repetitive tasks by creating workflows that trigger actions or send follow-up reminders for next actions.

Social media is here to stay

With 25 percent of businesses requesting increased social monitoring functionality in their CRM, and over 50 percent of businesses already leveraging social media for marketing purposes, social features are well established in the CRM marketplace.

Social CRM features can be parsed into three core groups that can help you decide if this functionality is a good fit for your business:

Social media engagement enables an ongoing back and forth dialogue between your business and your users. Key features include: social monitoring/listening, workflow management, social media response tools and customer profile development.

Social media publishing tools are typically included as part of marketing focused software and help your business maintain a unified voice when promoting and pushing content via social media. Key features include: social media account management, content development/management and content/campaign analysis.

Social media analytics capture, measure and analyze interactions and associations with people topics or ideas across social networks. Key features include: information analysis, generation of data reports and visualization and the ability to set notification triggers based on specific activity or other criteria.

Key question to ask vendors: What social media [select all that apply: engagement, publishing and analytics] capabilities does your CRM offer?

Data and analytics are constantly evolving

With 55 percent of sales people leveraging predictive analytics to meet sales objectives in 2017, this is less an emerging trend and more an evolving one. Effective analytics will increasingly determine whether or not businesses can seize available opportunities and form competent marketing strategies. Selecting future proof software means choosing vendors that are actively developing and improving their data and analytics functionality.

Key question to ask vendors: What is the current analytics functionality of your CRM solution and what plans are there (if any) to enhance analytics capabilities moving forward?

Artificial intelligence is the future of CRM

Artificial intelligence is still an emerging technology, but it will have the strongest impact on all areas of CRM functionality. This tech enables computers to emulate human conversational and problem solving abilities and lends itself to improving chatbots, offering virtual customer assistants and more.

The nascent nature of this technology means vendor marketing around AI should be taken with a grain of salt. However, gauging vendor investment in developing features based on artificial intelligence is important.

Key questions to ask vendors: What features does your product roadmap include that leverages artificial intelligence? Do you have plans to include [choose one or more: chatbots, virtual customer assistants and conversational AI] in future software updates?

Research methodology

The following sources were used for this document: