Customer relationship management (CRM) software helps organizations and businesses improve their communication and relationships with prospects and customers. Depending on your business needs, you may opt for an on-premise, cloud-based, or open source solution. In this article, we talk about what a CRM system does and give some examples of its usage in various business practices.
Why Your Businesses Needs CRM Software
Because CRM software is a centralized database that various teams or departments can access to view customer data in real time, it makes it significantly easier to manage your sales and opportunities. These tools can also be used to streamline your communication and sales processes by automating repetitive tasks, such as workflows, alerts, and appointment setting. This way, your agents can focus more on selling and spend less time on routine tasks.
Did you know? A CRM solution can be classified as operational, analytical, or collaborative. Gain a deeper understanding of these categories and their best use cases by reading our article on the different types of CRM.
How CRM Software Works
A CRM system pulls data from your business website, social media, emails, and other platforms integrated into your sales, marketing, and customer service departments. All this information is stored and organized in a single database that everyone in your company can easily access. Some CRMs can analyze data to uncover patterns that are used to improve sales and marketing campaigns or predict future sales trends.
CRM features vary from one provider to another, and each vendor offers different plans. Some platforms only provide sales tools, while others include marketing features. There are also all-in-one solutions that help you manage and improve all aspects of your CRM process.
Studies show that CRMs use its sales, marketing, and automation features to help businesses target their audience, enhance access to customer data, and shorten the sales cycle. According to Stellaxius, overall CRM usage jumped from 56% in 2018 to 74% in 2019. A 2020 HubSpot report found that 61% of overperforming leaders used a CRM solution to automate their sales process.
Looking for a new CRM solution or thinking about upgrading? These CRM statistics have useful data that can help you make your purchasing decision.
Click through the tabs below to see examples of what a CRM does in these business practices.
Bitrix24 offers an integrated contact center software with tools for inbound and outbound calls, call recording, interactive voice response (IVR), and phone number rental. It also allows you to generate call reports, route calls, track customer interactions, and gather actionable marketing data.
You can learn about other CRM solutions that are great for managing contacts in our guide to the best contact management software.
HubSpot CRM has a social media management feature that lets you publish posts to social networks from the same tool where you created your marketing campaigns. You can also schedule posts, monitor social mentions, and compare the performance of different campaigns on several platforms.
If staying on top of your social media interactions is important to you, check out our guide to the best social CRM platforms.
Zendesk Sell has a full-featured mobile CRM that lets you manage your sales, analyze pipeline data, and forecast sales on the go, even when you’re offline. Its geolocation capabilities give reps a visual map of their sales territory, helping them identify nearby prospects and customers. It also helps managers monitor sales reps’ activities when they are out of the office.
Several CRM solutions are designed with remote team and field agents in mind. To learn more about the best options for outside sales reps and support teams, check out our guide to the best mobile CRM apps.
Salesforce Essentials helps you monitor leads, sales, and opportunities so you can easily address issues that arise within the sales funnel. It has tools to manage products within each opportunity, create quotes, document your contracts, and track orders. You can also attach the names, strengths, and weaknesses of competitors associated with an opportunity, and track them as you work to close a pending deal.
For more information about CRMs that have advanced lead management functionality designed to help you nurture prospects over time, check out our guide to the best lead management software.
Types of CRM Technology
When choosing a CRM solution, you have to determine the type of its deployment or technology based on several factors. These can include the size of your team, your company’s budget, the level of customization you need, and the extent of data access by third-party vendors. Take a look at the types of CRM technologies below to see which one best fits your business needs.
Basic features of a cloud-based CRM:
- Data is stored in an external network
- Monthly or yearly subscription
- Vendor oversees installation and maintenance
Also known as software-as-a-service (SaaS) or on-demand CRM, the cloud-based system stores your data in a remote network that your employees can access anytime, anywhere. The provider also takes care of the deployment and maintenance of the system, so you only need to oversee the CRM adoption and provide your employees with access to the app. They can open it and access customer data as long as there is an internet connection.
Cloud-based CRM systems are seen as a more budget-friendly option because you don’t need to invest a huge amount for a software license. You only need to pay subscription fees regularly. Most CRM providers already include basic maintenance and support services in the subscription costs. Whenever you need to scale up your business, you can upgrade to a higher pricing tier with more data storage and features.
One of the disadvantages of a cloud-based CRM system is the steep, long-term cost of the subscription. You also have fewer customization options compared to an on-premise system because users are offered the same set of plans and features. Moreover, cloud storages are at risk of being hacked by people from outside of your organization.
Basic features of an on-premise CRM:
- Own infrastructure, setup, configuration, and training
- One-time payment for user license
- Can be accessed even when offline
An on-premise CRM is installed on the company’s servers and requires the purchase of a software license. You also have complete control over the setup, installation, employee training, software maintenance, and data security. However, the vendor will still provide technical support when critical issues arise. With this kind of system, you don’t need to rely on an internet connection to access your database.
While an on-premise CRM system allows you to have complete control over the server, this also means that your company bears full responsibility for the extra IT staff needed to manage it. In addition, you have to shoulder the expenses for hardware and software maintenance or upgrades, industry compliance, and offsite data backup service. In general, this kind of system requires a greater capital investment and takes longer to scale.
Open Source CRM
Basic features of an open source CRM:
- Free access to basic source code
- Highly customizable
- Support from open source developer communities
An open source CRM system allows users to access its basic source code for free and customize it deeply based on its intended use. You can deploy the modified software to individuals or your entire company. In addition, there’s support from open source developer communities for bug fixes and troubleshooting.
The main drawback for open source solutions is that it requires advanced technical skills to implement. Aside from that, most open source CRMs are not known for aesthetically pleasing and intuitive interfaces. There is also a limited number of core features available with the free source code, so you need to pay for a more robust system. Lastly, you have to depend on online communities for support because there are no customer service centers.
Examples of open source CRM platforms are Vtiger, SuiteCRM, and Odoo. To learn more about these providers or see other similar options, check out our guide to the best free and paid open source CRM software.
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- Read our guide to the best CRM certifications to learn how you can attract new clients and advance your professional sales career.
- Follow our step-by-step guide to learn how to use Zoho CRM.
- Do you need more tips for getting your business up and running? Check out this article on how to set up your small business system software.