What Is the CRM Process: Definition, Cost, Features & Providers

The customer relationship management (CRM) process represents the series of activities that businesses use to organize and engage with current customers, nurture new prospects, and pursue sales opportunities. All businesses typically have some form of a CRM process, and when creating your own, it’s important to implement five key components to effectively manage customer relationships.

One way to improve your CRM sales process is to implement a software tool like Pipedrive. It is CRM software built around a highly visual sales pipeline, allowing users to easily create, track, and move deals through the sales process. Plans start at $12.50 per user, per month when paid annually. Visit Pipedrive to start your free 14-day trial today.

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How the CRM Process Works

The CRM process is built around the activities that grow relationships with prospects and move them through a lead-nurturing or sales pipeline to convert them into customers. In addition, when properly executed, it coordinates and records the communication and engagement with your existing customers. This results in strengthened relationships over time.

A good customer relationship management process is based on best practices that revolve around serving your customer’s needs. This includes active listening, attention to detail, and consistency. An effective process communicates to your customers that you value them and their time, establishes trust, and adds value to the relationship by offering the best products and services for their unique needs, not just closing a sale.

Every business needs to think through and define how they will manage customer relationships. To avoid the risk of losing customer relationships, businesses need to effectively build new connections, track and monitor sales opportunities, understand their customers, manage customer communications, and manage their team’s efforts. Regardless of the type of business, each interaction with current and future customers will be defined by these five components.

Five Key Components of the CRM Process

The five key components of the CRM process determine the effectiveness of your overall customer relationship management strategy. Managing customer relationships means taking a proactive approach to understanding the needs and challenges of your prospects, and actively engaging them in your sales strategy.

1. Connect With New Prospects & Leads

The customer relationship process starts long before a contact becomes a customer. It begins with generating and identifying new potential customers in the form of prospects, or leads. While the job of introducing leads to your sales funnel is generally the job of the marketing department, your CRM sales process depends on being able to consistently identify and attract prospective customers and begin to build a relationship.

A good CRM sales process will include the ability to capture leads across your marketing channels, like your website, social media, email, and inbound phone calls. It will also help you to nurture them to identify which ones are most likely to become customers. Lead nurturing campaigns can help you take contacts and turn them into new business regardless of whether you collect them from your website or buy business leads from a service.

2. Track & Monitor Sales Opportunities

Your CRM process will include creating and tracking sales opportunities and moving them through your sales pipeline. Sales opportunities represent potential future revenue as a result of winning your customer’s business, and your CRM process should define the stages of your sales pipeline as well as the activities necessary to keep deals moving forward.

Additionally, tracking your sales opportunities through a well-developed sales pipeline ensures that you are taking action in a timely manner. For example, you might want to make sure that a sales rep sends a follow-up email after a customer reviews a sales proposal. I make it a habit to send a handwritten thank-you note every time I meet with a new prospect or book a new project because it helps that person feel that they are valued and strengthens the relationship.

As your sales team grows and starts to manage more sales opportunities, having the ability to monitor each one can mean the difference between winning and losing a sale. Clearly defining the stages that a deal moves through in your process, as well as the touchpoints that keep a customer engaged, allows you to create customer relationships that lead to sales.

3. Understand Your Customers

A big part of the CRM sales process is understanding your customers and their specific needs. Taking the time to ask questions and listen before assuming that you know what is most important allows you to better address the specific pain points they experience and provide products and services that meet their needs. The difference between a mediocre salesperson and a rock star is often how well they resist the urge to “sell,” and instead simply listen.

The best way to better understand your customers is as follows:

Define Your Target Customer

In order to effectively provide the products and services your customers need, you first need to define who they are. You’ll want to have a good understanding of the type of customer you want to engage with. For example, if your customers are other businesses, you might define them based on size, location, industry, type of business, revenue, or time in business. Each of these criteria helps you to make decisions about how to best reach, and sell, to your customer.

Qualifying Leads

Sales teams qualify leads to make sure that they expend time and effort on the prospects that are most likely to become customers. Qualifying your leads, or prospects, is the process of evaluating them based on how well they align with your target customer, as well as factors like how soon they are ready to purchase, overall budget for your products, and response to specific sales activities like website visits, information resource downloads, or marketing emails.

Listening to Your Customer’s Needs

A large part of understanding your customers, and the CRM sales process as a whole, is listening to your customer’s needs. This helps you better understand the specific pain points and challenges they face. Once you fully understand these, you’ll be better prepared to offer a solution in the form of your products and services.

4. Manage Communications

Another important component of the CRM process is to effectively manage communications with your contacts. Since communication is the primary activity that builds trust and drives relationships, how you handle this has a direct impact on the success of your sales process. The goal is to make sure that everyone on your team who interacts with a contact has the ability to review previous communications and understand where that customer is at in the process.

A few of the specific areas of communications you should manage include:

Log Activities

Sales reps should keep track of the specific activities related to the customer relationship, including logging appointments, phone calls, and emails. The goal is to create a comprehensive history of each customer relationship so that over time, you’ll be able to review and understand what actions have been taken, and how your contact has been engaged. It also helps to eliminate duplicate efforts when multiple team members interact with the same contacts.

Email & Phone Conversations

In addition to keeping track of specific activities, there are tools available that help you to keep all of your customer conversations in one place. For example, a CRM software tool might allow you to attach email conversations to specific contacts, or record and save phone conversations. Many CRM software tools also directly integrate with your email inbox, making it easy to capture and organize your communications and link them to your sales contacts.

5. Manage Your Team’s Efforts

The CRM process involves many moving parts, and many of those parts are people. This means that it’s important to have a system in place for coordinating your efforts, assigning responsibilities, and evaluating the performance of your team. This reduces confusion and eliminates overlap that results from uncertainty when team members aren’t sure who is responsible for which customers, or step, in the sales process.

“Sales team meetings are an absolutely key part of the sales process, and should be celebrating successes as well as coaching in areas that might need improvement.”

– Steve Robertson, CEO of Eventective

As a sales leader, it’s your job to keep your team focused on your overall strategy of building customer relationships and moving them through your sales pipeline. Just as you have to take a proactive approach to managing customer relationships, it’s important to be proactive in setting goals and expectations for your team and providing them the resources and accountability to reach them.

Benefits of the CRM Sales Process

Having a good customer relationship management process helps your business be more effective and profitable. It results in happier customers, fewer problems, and more time to pursue new sales opportunities. This means more closed deals and more sales revenue for your business.

A few of the specific benefits of the CRM sales process include:

Produce the Highest Quality Leads to Pursue

By using an intentional and well-thought-out CRM process, you’ll be able to evaluate and understand incoming leads and nurture them into customers based on the criteria you’ve used to define your target customer. By being strategic about your sales strategy and moving leads through the process, you can be sure to invest your time and energy in the most valuable sales opportunities, both by dollar amount and the likelihood of closing.

Win More Quality Sales Opportunities

A good CRM process will result in more quality sales opportunities being won, which means more revenue for the business. Not all sales opportunities are created equal, meaning that sometimes the time invested isn’t worth it, or the customer’s needs aren’t aligned with your products or services. Your CRM sales process, if well-designed, will enable you to close the deals that are the best fit and are the most profitable.

Improve Customer Relationships

Investing in your current customers is almost always less expensive than finding and nurturing new customers. While most businesses will always be pursuing both, a good CRM process will strengthen the relationships you have with your current customers by helping you be strategic with how you engage with them on a regular basis. This benefits your business because strong relationships mean that customers are less likely to take their business elsewhere.

Measure the Effectiveness of Sales Activities

Smart sales leaders are constantly looking for ways to improve their sales plan, and a clearly defined CRM process will allow you to set goals and track the performance of your team. Knowing which activities are best at generating new sales opportunities means that you can direct your efforts accordingly, and measure how effectively your team is spending its time. You can also create metrics that give you a sense of how you are achieving your sales goals.

Customer Relationship Management Costs

The CRM process is one of the primary factors in the cost of sales for most businesses. Included are the costs of the time spent by salespeople, software and technology tools used by your team, and travel. In addition, the overall costs associated with managing customer relationships include the cost of building direct relationships like entertainment, the costs of materials and resources that facilitate the sales process, and the cost of providing support.

Some of the costs you should expect include:

• Sales reps’ time: The time your team spends nurturing relationships is valuable, and is one of the most expensive aspects of customer relationship management. You’ll also want to factor in the time of your sales support and customer service teams.
• Travel: Wherever your customers are located, building and managing customer relationships requires a personal connection. Often this means traveling to meet with them at their location, which is an expense that needs to be considered.
• Technology: In addition to travel, technology has made it easier to stay connected with options like mobile apps and video conferencing. These tools cost significantly less than travel, and allow for sales teams to quickly respond to customer needs on the fly.
• CRM software: The cost of CRM software can range from free-forever plans with basic features to $29 or $49 per user, per month for more comprehensive plans with automated features and advanced reporting.

CRM Software Features

CRM software manages contacts and sales opportunities and provides reporting and automation tools to organize and manage their customer relationships. Many CRMs include tools for managing communication with your leads and customers, as well as keeping track of sales opportunities as they move through your sales process. In addition, most include reporting tools to help businesses better understand how their sales activities translate into revenue.

A few common CRM software features include:

Contact Management

Most small business CRM software allows you to create profiles and organize your contacts based on where they are in your sales process. For example, you can keep track of incoming leads, existing customers, and customer accounts, and keep each of them linked to any deals they are associated with. Pipedrive, for example, also allows you to keep track of all client communications and activities in one place, and organize your contacts accordingly.

In addition to being the primary role of a CRM database, contact profiles give you a view of the entire relationship, including conversations, appointments, deals, and current opportunities. It also provides a central place to keep all of the important information about the prospects and customers you connect with, including proposals, emails, project files, and notes that help you maintain the relationship and also determine the best approach to new sales opportunities.

Pipedrive contact management

Sales Pipelines

One of the most valuable functionality of many CRM tools is that they allow you to create and manage sales opportunities, or deals. CRMs like Pipedrive allow you to customize your sales pipeline based on the stages in your sales process, and then visually track and monitor sales opportunities as you move them through those stages.

Creating a customized sales pipeline lets you determine the stages and steps that you’ll use to pursue sales opportunities. This is where the sales process you’ve defined becomes real as you move qualified leads, or deals, through the pipeline, learning more about your customer’s specific needs and how you can best meet them.

Pipedrive’s visual sales pipeline interface

Email Sync & Tracking

Another feature that has become common is the ability to sync your business Gmail or Outlook email account and view your communication history from within the CRM. In addition, many give you the ability to track emails sent from the CRM and monitor whether the reader has clicked on any links you included. This is an especially helpful tool that gives you information about how your prospects and customers are engaging with your CRM sales process.

When managing customer relationships, knowing where your contact stands can help inform you about what steps to take next. Knowing that a customer has read and engaged with your email can tell you that they are interested, and help you decide how to move forward in the relationship. Likewise, if a customer never opens an email, you’ll know that they are either no longer interested, or that your messages aren’t getting through.

Pipedrive email sync and tracking

Lead Scoring

Many CRMs use artificial intelligence (AI) to improve the process of qualifying leads by adding contextual information about your prospects from their industry, role, social media, and other public and proprietary information sources. In addition, they often keep track of website and email activity to give you a sense of the prospect’s level of interest, and automatically adjust the lead score accordingly.

Pipedrive lead scoring labels

Reporting & Analytics

Reporting is an important feature that allows you to track and monitor the progress of your activities and sales opportunities. It helps you by giving you an at-a-glance perspective of how your customer relationships are growing and generating sales revenue for your business. CRMs like Pipedrive even allow you to set goals based on customer activities, new deals won, or total revenue, and make it easy to measure the effectiveness of your CRM sales process.

Pipedrive sales reporting

CRM Software Providers

There is a wide variety of CRM software that help businesses efficiently manage the activities and process of developing customer relationships, and that allow users to automate and track communications and customer engagement. We’ve included a few here to provide you with a list of some of the great CRM options for small businesses. Be sure to spend a few minutes and check out our guide to the best small business CRMs.

A few of the CRM software providers designed for small businesses include:

Freshsales

Who it’s for: Small businesses that want a flexible software tool to manage leads and sales opportunities with affordable tiered plans, including a free-forever plan with unlimited contacts.
What it costs: Free to $79 per user, per month.

Freshsales contact interface

Freshsales is a flexible CRM that includes contact and lead management as well as advanced lead assignment, automated workflows, and reporting. Freshsales also integrates directly with the entire Freshworks platform of business software, including Freshchat and Freshdesk, making it a comprehensive choice for business-to-business (B2B) sales teams that want highly customizable CRM software that integrates with tools for the entire customer life cycle.

Pipedrive

Who it’s for: Small businesses that sell both products and services and are looking for pipeline-driven sales process and a clean, simple user interface.
What it costs: $12.50 to $49 per user, per month.

Pipedrive contact interface

Pipedrive is a small business CRM that is designed around a highly visual sales pipeline, making it easy to move deals through your sales process. Pipedrive also includes product catalogs, email tracking, and individual and team sales goals, making it best for businesses with a catalog of products or services looking to manage contacts and sales opportunities through an interactive sales pipeline

HubSpot CRM

Who it’s for: Small businesses looking for a free basic lead and customer management tool with lead generation forms, email tracking, and reporting.
What it costs: Free

HubSpot contact interface

HubSpot is a lead generation and marketing automation platform that provides the ability to create landing pages, lead generation forms, lead nurturing email campaigns, and lead scoring. It’s ideal for businesses looking to generate leads on their website with content marketing and robust lead management. While HubSpot’s free CRM allows you to collect lead information and manage your sales process, advanced features are also available at $50 and $800 per month.

Streak CRM

Who it’s for: Gmail users who want a CRM with customer management and sales opportunities that lives in their inbox.
What it costs: Free to $129 per user, per month.

Streak CRM contact interface

Streak CRM is a CRM tool that lives within Gmail. It features contact management, sales pipelines, and deal management, as well as reporting and task management. Unlike many CRMs that integrate with your inbox, Streak is actually built into Gmail, meaning that sales reps always have access to their sales tools in the place they spend the most time in—their inbox.

Salesforce Essentials

Who it’s for: Fully-featured CRM for small businesses and enterprises with advanced automation, reporting, and lead assignment rules, as well as customer service features built in.
What it costs: $25 per user, per month (up to 10 users) or $75 per user, per month.

Salesforce Essentials sales pipeline

Salesforce Essentials is a comprehensive CRM with both sales and service features including contact management, automated workflows, deal pipelines, and customer support ticketing. Salesforce is built for teams, and includes a robust mobile app and territory management features. It is also highly customizable and features an extended network of integrations with many of the software tools used by small businesses.

Who the CRM Process Is Right For

The customer relationship management process is important for all businesses. By definition, if it’s a business, it has to make money, and that doesn’t happen without customers. Building and managing those relationships is one of the most fundamental responsibilities of a sales plan. Whether you’re a solopreneur, a 10-person team, or a large enterprise, creating a process to effectively manage your customer relationships will help you generate profitable sales revenue.

While businesses of different sizes have different needs, they all need a CRM sales process:

• Solopreneurs: Individual entrepreneurs who work alone or with other freelancers need to be able to find new customers, manage communications, and keep things organized as they pursue deals and grow their business.
• Small businesses: Small businesses may have an individual or a small team of sales reps, a clearly defined CRM process to make sure that everyone is on the same page, and that customers and sales opportunities don’t get lost or overlooked.
• Mid-sized to large businesses: The larger the business, the greater the role the CRM process plays in streamlining your sales efforts. In addition, a good CRM sales process will help keep you focused on moving the highest quality deals through your pipeline.

The bottom line answer is that every business should take the time to develop an intentional, proactive CRM sales process. At every stage and size, the businesses that consistently achieve their sales goals are the ones that effectively manage customer relationships by engaging with, and learning about, their customers, instead of simply reacting on a transactional basis.

Frequently Asked Questions (FAQs)

How do I create a CRM sales process?

Your CRM sales process should be based on your overall sales plan and strategy. Once you’ve defined that, you’ll be able to define the specific steps, activities, and communications that you’ll use to effectively manage customer relationships. Be sure to check out our guide to creating a sales plan for more information.

What if I can’t afford a CRM?

Instead of looking at the price of a CRM software tool, look at it from the perspective of how much time and effort it will save, which can then be spent generating new sales. Additionally, many CRMs offer free tiers that can be used for basic contact and deal management. Finally, you can even create your own CRM in a Google Sheets spreadsheet if you aren’t yet ready to start using a dedicated application.

Bottom Line

Customer relationship management is important to businesses, and developing a CRM sales process ensures that as you generate and nurture leads into customers, you’re able to invest your time and energy as efficiently as possible. The CRM sales process helps you to be more profitable as you focus on the highest quality leads and deals, and convert them into revenue for your business.

Pipedrive is a powerful sales process-driven CRM that includes contact and deal management, a visual sales pipeline, email tracking and sync, and easy-to-use goals and reporting. Pipedrive plans begin at $12.50 per user, per month, and Pipedrive also offers a 14-day free trial of each of its subscription plans. Visit Pipedrive today to start your free trial.

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