What Is CRM? Definition, Benefits, Features [+ Best Simple CRMs]

Looking for the right CRM for a small business can be overwhelming. There are lots of options to choose from. Ideally, you first need to shortlist a few solutions and then test them all to get a feeling of how they work and decide which CRM you want to implement.

In reality, you don’t always have enough time to create multiple trials and weigh all pros and cons to make the right decision. That’s why many small businesses choose the most popular solution on the market and often end up with a too comprehensive CRM system.

This, in turn, leads to other problems along the way: for example, low adoption rates, time-consuming data entry, or lack of free integrations.

To make it easier for you to choose the right CRM solution for your small business, we’ve created this comprehensive guide. In this guide, you’ll find not only the top 5 CRM solutions for small businesses but also answers to the most common questions about CRMs.

And for those of you who prefer videos, here’s a short explanation of what an action-focused CRM is, what makes it so simple, and why you should care.

What is a CRM… and what it is not? | CRM Definition

A Customer Relationship Management (CRM) tool is the central database that has all the vital information that can be used to build relationships with your clients and leads.

CRMs are used by sales and marketing teams to track interactions with potential and existing clients: from something as simple as email communication to the list of the client’s orders.

The definition of a CRM system sounds very simple on paper but it’s usually a bit confusing in reality. Can a simple spreadsheet with contact details be considered a CRM tool? Can a phonebook count as a CRM system?

Although both spreadsheets and phone books are used for storing and organizing contact information, a good CRM system doesn’t stop at data storage and management.

If you want to take this information to the next level and build relationships with your clients, then you need a tool that supports the relationship-building aspect.

And this is where a CRM comes into play.

What are the key requirements for CRM?

Not everything that you use for storing contact information is a CRM.

CRMs should have three main components:

• Data storage and management features. A CRM is a central database for keeping records of all interactions with clients and leads.
• Relationship-building functionality. Contrary to a spreadsheet or a phonebook, a good CRM solution has features that help you build relationships with clients and leads. For example, follow-up reminders or email management.
• A built-in methodology. For example, OnePageCRM is famous for its Next Action principle while HubSpot is known for its Inbound Marketing methodology.

What are the major types of CRM?

To make the search for a CRM solution easier, many companies started differentiating between their CRM solutions:

• By industry. You can find a CRM built for a specific industry. For example, a CRM for manufacturing or a CRM for real estate. These industry-specific CRMs have niche integrations and industry-related features.
• By department. The bigger your company is, the more complex its hierarchy gets. For example, a CRM can be useful for marketing, sales, customer support, affiliate managers, and so on. That’s why there exist marketing and sales CRMs and also CRMs for customer service teams. While these solutions are somewhat similar, they focus on different functionality.
• By roles. Business relationships come in different sizes and shapes. You can use a CRM to manage relationships with clients, leads, partners, vendors, sponsors, distributors, suppliers, and so on.
• By company type. There are CRMs for small business, startups, non-profits, enterprises, and so on.
• By functionality. CRMs are sometimes divided into three big categories: operational, analytical, and collaborative.
• By business model. There are B2B and B2C CRMs. In B2B CRMs, the focus is on managing accounts rather than single contacts.

Although these classifications were created to make lives easier, they don’t help much with choosing the right CRM solution.

Here are a few reasons why these classifications might not be very helpful in your search:

In other words, these classifications, however comprehensive, don’t help small businesses choose the best CRM solution.

That’s why a simpler CRM classification emerged.

Here’s how you narrow down the number of CRM vendor choices

When looking for the right CRM system for a small business, you can divide all options into two categories:

• Admin-focused CRMs
• Action-focused CRMs

They have similar functionality but their primary focus is on two different things: admin vs. action. Either one can make or break your CRM strategy and how successful your CRM adoption is.

What is an admin-focused CRM?

Traditional, or admin-focused, CRMs are great for managing, organizing, and processing information. They were built for recording and storing the history of client interactions. Based on these records, businesses can then automate client communication and make data-empowered decisions.

Since admin-focused CRMs are mostly built for large enterprises, they need to satisfy lots of different needs. Think about Salesforce. It’s a powerful tool with tons of features and add-ons that are great for multi-departmental customization but can slow down the growth of a small business.

What is an action-focused CRM?

Similar to admin-focused tools, action-focused CRMs allow users to keep all information in one place. But instead of solely storing and managing information, they motivate users to put this information into action. That’s why action-focused CRMs are especially popular with small businesses that need to grow.

Built on productivity principles, action-focused CRMs turn a contact list into a dynamic Action Stream where every client or lead has a reminder/task assigned to them. For example, “Send a follow-up email to John” or “Re-connect with Jane after the NYC conference”.

What is the best CRM for small business?

To choose the best CRM for your business, you first need to determine your business lifecycle stage.

If you’ve just started a company, you probably don’t have many processes. You might have only a beta version of your product, a few potential users, and a couple of partners. At this stage, a simple spreadsheet can usually suffice.

Once your company starts to grow and get more clients, you’ll need a proper tool to support this growth and build relationships with potential and existing clients. This is the stage where companies start using action-focused CRMs.

Mature companies usually have complex processes, several departments, and a big database of customers. At this stage, you’ll need a highly customizable solution with different add-ons and features. This is when many businesses switch to an admin-focused CRM.

How do you compare different CRM solutions?

Here’s a short summary of what makes a CRM solution good for a specific business lifecycle stage:

Top 5 CRMs for small business

The best CRMs for small business:

1. OnePageCRM
2. Close
3. Pipedrive
4. Zoho CRM
5. Salesforce

Here is a list of must-have CRM features for a small business:

• Proactive follow-ups with reminders organized in an Action Stream. The dynamic list of contacts with time-sensitive reminders and tasks will help you make the most of every contact in your database.
• Triple database. To scale your business and build relationships with clients, you need to have a full client profile easily accessible and in front of you. Ideally, your CRM should let you do this in a simple way and display all vital information on one page without making you switch from one tab to another to piece everything together. In such CRMs, even Dashboards are straightforward, clean, and clutter-free.
• Email management. Emails are an important part of your business communication strategy. While sending them from a separate inbox can be handy at first, after your business grows a bit more, you’d want to keep all business-related communication in one place.
• Workflow automation. As a small business, you don’t need complex automation features but a few triggers can help you speed up your processes and optimize workflow. This can be something as simple as “if a new contact is created, send them an automatic introductory email”.
• No complicated add-ons. If a CRM has different add-ons and a variety of pricing plans, it might be hard to choose which one suits you best. Besides, sometimes by subscribing to a plan, you still have to buy add-ons to unlock some features that might be important for your business. As the result, the cost of your CRM will increase. That’s why ideally you need a CRM without any complicated add-ons.
• Lead Clipper. Lead Clipper is a free browser extension for lead capture. When switched on, it recognizes contact details on any web page, including emails and social media, and lets you easily create new contacts in your CRM in just one click. Long gone are the days of manual copy-pasting.
• Free web forms with automatic reminders. While the majority of CRMs offer web forms, ideally you need an online form solution with actionable submissions. For example, with smart Web Forms, once someone fills out your Contact Us page, a new contact will be automatically created in your CRM with a reminder assigned next to them so that you don’t forget to get back to this lead.

Why businesses need a CRM? Top 3 CRM Benefits

Recording interactions with clients and keeping your records straight sound easy when you have 5-10 clients. In this case, you can use a simple Google spreadsheet.

However, once your business grows, you start getting more and more clients. Keeping their information organized in a spreadsheet becomes too time-consuming. For example, if you have hundreds (or thousands) of clients, at some point, you’ll need to segment them to provide them with better support. You will also have multiple points of contact with clients and will need to keep all meeting notes and email communication organized and easily accessible.

Once you feel that your client database is becoming messy and cumbersome, it’s usually a sign you need to look for a CRM solution. And most businesses, both small and large, prefer online CRM systems for their convenience and easy set-up.

Benefit #1: CRM helps you keep all information in one place

While you can keep track of some notes about your clients in non-CRM tools, these notes will be hard to manage.

Imagine the following situation.

Jane Doe has been your client for the last 2 years. It’s quite a long time and you’ve already interacted with her on multiple occasions. Besides her contact details, you’d also want to have:

• A record of your email communication with Jane
• Any call or meeting notes
• Invoices or other documents
• And many other things, depending on your business model.

Remembering all of this for every client doesn’t sound feasible.

A CRM system allows business owners to keep all relevant client information easily accessible in one place instead of being scattered across several apps.

Similar to how you look at LinkedIn profiles, you need to be able to work with client profiles in your CRM and quickly grasp what’s the story behind this contact by looking at their Contact Page.

Benefit #2: CRM can increase your bottom line

CRMs are built for managing and structuring your client information. This, in turn, can increase your bottom line.

When used correctly, a CRM can unlock several benefits for your business:

• A 360-degree view of your clients. This means that you’ll be able to provide them with a more personalized experience. For example, if during a call, your client mentions that they are planning a short trip this weekend, you can leave a note in your CRM and ask them about their trip the next time you’re on a call with them. This small personalization touch can help with client acquisition and retention.
• Smooth processes. Having a CRM helps you streamline processes and speed up routine work. You won’t need to pause to think about what the next best step is — your CRM can record this information after every client interaction and nudge you when it’s time to act. If you have a team, by using a CRM, your team members can assign tasks and notes to each other to make sure that everyone is on the same page and there is no miscommunication.
• Optimization. With the right CRM, management can get insights into the sales team’s performance and forecasted revenue to optimize the sales process.

Benefit #3: Put this information into action

Simply having all important information neatly organized right in front of you won’t make your business grow. Information without taking action is not helpful. That’s why, as a small business, you need an action-focused CRM.

An action-focused CRM lets you take control of the data you have in your CRM and proactively work on building relationships with clients. For example, scheduling follow-up appointments or triggering automated events based on some changes to data.

The best CRM for any business, regardless how big or small, has a solid follow-up functionality. Research from The Bridge Group of 355 leading B2B sales teams revealed that “sales development reps who make 12 contact attempts (instead of the average 8) perform 16% better!”. Without a tool to manage those interactions opportunities will be missed.

“Your CRM will deliver a ROI of $8.71 for every dollar spent.” – Nucleus Research.

Should my business use a CRM?

Think for a moment, can you remember the names of all your customers and prospects?

As a general rule, you need a CRM if you can’t remember the name of every customer and prospect you deal with. It means you are starting to let opportunities slip through the cracks and forgetting to follow up in time.

5 signs you need a CRM

• Leads and opportunities are not followed up and lost.
• You begin to get bad customer or potential customer feedback.
• You lose important data. Well, you know it is somewhere but you can’t remember where.
• The sales cycle has too many touch points to keep track of.
• You can no longer remember the history of leads and customers.

How to choose the best CRM for your business

1. List out the top 2-3 business objectives you want to achieve. They should be rather specific. For example, instead of “improve client communication” use “ensure a consistent follow-up process”.

2. Based on your top objectives, do a google search or ask around your network for recommendations. For example, if you’re trying to optimize your sales pipeline, look for “pipeline management software”.

3. Choose a list of core features you need. Modern CRMs are complex solutions with lots of features. CRMs built for small businesses are usually simpler and much easier to use. You can also use our checklist to choose the best CRM.

4. Obtain the total price (incl. all setup, integration, onboarding costs and training).

5. Get a demo or webinar from each.

6. Find out how good their support is. A good CRM will have a great customer support team to help you and your team make the most of the application.

7. Read customer reviews. You can use review platforms, such as G2, Capterra, or SourceForge. You can also do a simple google search to find out what customers say about the CRM you’re interested in.

8. Check how secure they are. Make sure that your CRM of choice has a good reputation. From your research and customer reviews, it should be obvious if there are any reasons for concerns.

How to implement a CRM system in a small business

As a small business, you want your CRM system to satisfy four conditions:

• It should be super-simple to use. Intuitive and without any paid training. No extra add-ons or too many pricing plans.
• The interface should stay clean. You’ll be spending lots of time in your CRM system. You don’t want to get distracted by too many elements or features that you’ll never use.
• It needs to be action-focused. If you’re still in a growing or scaling stage, you’d want to have an Action Stream instead of the usual A-to-Z listing.
• Your CRM should be affordable. If upgrading from one plan to another is followed by a huge cost increase, you might think twice before subscribing to this CRM.

Once you find the one that checks all the boxes, you are good to go and implement it. Regardless of how simple your chosen CRM is, there should be a CRM strategy in place.

Here’s a list of things that you need to keep in mind when implementing a new CRM solution.

1. Set up your CRM system

Before migrating any data to your new CRM, make sure that all admin questions are dealt with. For example, how many user seats do you need? What currency do you want to use? Is the time zone set correctly?

The second biggest reason a CRM implementation fails is the lack of proper user training and onboarding.

2. Clean and migrate data

The higher the quality of your database the more your teams will trust it and less resources are wasted.

If you’ve been using a different CRM before, ensure that the data you downloaded from your previous CRM is clean. Delete unused tags or duplicated records and merge accounts or contacts that have similar information.

Capturing duplicate contacts and leads is impossible to avoid. Contacts get entered by different members of your teams and sometimes automatically if your systems are not syncing the proper way. And the same contacts will sign up for many of your campaigns and offers.

If your new CRM can search and find duplicates and allow you to merge them into a single contact, you can clean your data in your new system instead of doing it manually.

In most modern CRMs, you can also import contacts in bulk which is a very handy feature if you have thousands of records in your previous CRM or a spreadsheet.

Since CRM is a central database for all your client information, it’s good if it has integrations with Dropbox or Google Drive or allows attaching documents and files to contacts. There is nothing worse than having to hunt down files, specs, quotes, and other documents across different folders, email inboxes, and systems.

3. Decide on the best data segmentation

Some companies sell to one particular contact within a company. Others sell into a company and deal with many different contacts across different departments. Account-based selling describes the goal of selling into a particular company, drawing up a list of possible contacts within that company and systematically targeting those contacts to get a foothold within the organization.

If you are doing company or account-based selling your CRM needs to understand the relationship between contacts, the company they work for, and associated contractors and consultants they have relationships with.

Decide on what custom fields you need to set up and how to do it the best way. Good CRMs allow customization and data segmentation. Ideally, you should be able to add your own custom information to contacts, accounts, and deals relevant to your business type.

Every so often you will need to contact just the customers who bought product x, or maybe the ones in a certain city, or the leads your team captured at a conference, or downloaded a resource from the website. Tagging, grouping and segmenting provide multiple ways to slice and dice your customer data for analysis, marketing, and targeting.

4. Integrate your CRM with other apps

Your CRM system should offer the ability to connect to other parts of your business (like lead generation, lead nurturing, accounting, or communications). Making sure that your CRM system is connected to all of your important apps can help you maximize your revenue and make the most of your CRM implementation.

Set up the following core integrations:

Gmail and Outlook. Two of the most common email platforms. Enable contacts and emails import to build a history for a customer or company.

Email sending. Even better is if you can connect Gmail or Outlook to the CRM and then send emails directly from within the CRM application without having to switch between different systems. Bonus points if the CRM then allows you to track if your emails were opened by a prospect.

Email marketing. As you can guess, in business, many things still revolve around emails. Integrations with an email marketing platform like Mailchimp will allow you to quickly select a segment of your contacts and send them an email newsletter. An example would be selecting all the contacts you met at an event and sending them a bulk email to thank them. You can include further details on how to follow up with you. Or you might notify all or a segment of your customers about a new product update.

Finance and accounting. Ideally, this should work in two directions. Before you call a contact, you should be able to see in the CRM if they paid their last invoice or what their last purchase was. When you make a new deal with a customer you should be able to send the details of that deal over to accounts to create a new quote or invoice.

Customer support. Imagine calling a customer to renew their account for another term only for them to angrily tell you they have been talking to support all day with an issue. Not the best timing. Your CRM needs to pull in this kind of information from across departments. With a central customer record and history, your team can be more effective.

Webhooks and API. Sometimes the business system you want to talk to does not have an easy integration or Zapier connection. In this case, you might need to get a programmer to code something bespoke to connect the two systems. For this to work your programmer needs access to your CRMs API or Webhooks.

5. Automate repetitive tasks

Once you migrate data to your new CRM and set up integrations, explore available automation features and how you can use them for your business. For example, you can automate repetitive tasks to avoid manual data entry or schedule automatic reports delivered to your inbox on a regular basis.

Too much data entry, while great for management reports, is simply a waste of a your team’s time. A certain amount of data entry is needed to be effective but it needs to be as easy and as fast as possible. You want to be paying your team for making sales and growing your business, not data entry.

Some CRM solutions also allow you to create a sequence of tasks that resemble your usual business processes. You can then add these sequences to new contacts in just one click to avoid typing each step manually every time.

If your CRM provides tools for automatic data capture, it’s can be a time-saving feature for your business. For example, a browser plugin that detects a lead’s contact details on a website and automatically imports them into your CRM (check out Lead Clipper).

6. Install available mobile apps

Chances are your web CRM application has a few extensions and mobile apps that might be useful to you.

Mobile access is a vital component to your success. In fact, according to Nucleus research sales reps saw productivity increase by 26.4% upon adding mobile access to their CRM application.

Not only will a mobile CRM increase sales productivity, but it’s also a significant factor in helping sales reps meet their sales quotas. Ideally, your CRM of choice will have dedicated Android and iOS mobile and tablet apps to give you and your sales team access from anywhere.

Ensure you can access all the key functionality you need on mobile as well as the desktop, as some mobile sales CRM apps offer a cut-down feature set of the full application.

7. Appoint a CRM champion

Having a CRM champion will help you keep your team aligned and boost the CRM adoption rate and overall productivity. As with any other tool, a good CRM is evolving every year with new features going live or old features being improved. A CRM champion usually keeps up-to-date on all CRM changes and can educate the rest of your team on all important updates. Besides, when the time comes, it’s very handy to have a person who’ll be motivating the team to do a CRM audit on a regular basis.

8. Don’t forget about security

The majority of modern CRM solutions are quite secure. For example, OnePageCRM stores customer data on Amazon servers and uses an SSL certificate. The data is encrypted via 256-bit encryption which is very similar to internet banking. that regular back up’s are being undertaken on daily or weekly basis.

Not only CRM security is important. You need to take measures to educate your CRM users on how they can keep their data safe. For example, enable different permission settings for different users. In business, not everyone needs the same access to information.

9. Ask for feedback to increase CRM adoption rate

Make sure that if there are any problems, your team is comfortable with sharing their feedback with you. If your team thinks that something is not working, find out what you can do to improve the situation.

There is no point in getting a CRM that can do everything but no one can use it. An effective CRM helps your team do their job quickly and effectively and then gets out of the way. It needs a simple and intuitive user interface where your team is left in no doubt about what to do next and how.

10. Involve the whole team

If CRM implementation is not managed correctly the results can have a domino effect. You need to have the whole team from different departments interested in implementing a CRM. The benefits of CRM implementation should be obvious to every department and person that work with client data.

Top 12 reasons why CRM adoption fails

It is easy to buy software for your business. It is less easy to get everyone to adopt and use it day to day. Low user adoption is one of the biggest (and most expensive) reasons why software fails in an organization.

Here are top reasons why CRM adoption fails:

1. Business goals for the CRM are not defined

One of the biggest reasons users do not adopt and use a CRM is due to neglecting to clearly define the business objectives for the CRM.

“85% of companies that buy CRM software to automate sales do not pick the right tools because they fail to define business objectives or to develop processes for meeting objectives.” – Gartner analyst Robert DeSiste

2. Lack of ownership

To ensure that your team buys in, CRM decision-makers must involve the team in the selection process, analyze their needs, and answer a few questions early in the CRM selection process. A good idea is to designate someone in-house as being responsible for keeping the CRM in check, the CRM advocate of your company also known as “the super user” (or a CRM champion).

3. System is difficult or slow to use

A CRM is a tool that will be heavily used by non-IT users. It needs to be simple and make their job easier not harder. The user interface must be very friendly and appear simple and responsive. Your team must be in no doubt about what is happening at any time and how to do what they need to do next.

4. Too much data entry

A good CRM asks for the minimum of data and makes it as easy as possible to add it automatically. It should ideally eliminate manual logging of interactions and activities. All calls, emails, and replies should be recorded automatically within the CRM or added with a single click.

5. Poor training and onboarding

Getting to know and use new software and a new process is not something that happens overnight. It can take up to a week or more depending on how many people you have on your team. You need to give your team time to get familiar with the software and not penalize them for lost sales and slow processes during this transition.

6. Poor choice of CRM

Choosing a CRM which is not right for your business can cost you both time and money. It must fit your sales process and help everyone achieve their stated goals.

7. Your whole company does not use the system

While sales may be the core users of a CRM they should not be the only ones. Ideally, the CRM should be the system of record for all customers. Lack of organizational use can also be due to lack of technology integration options within the CRM which probably means you have chosen the wrong CRM.

8. Management does not use the system

If management asks for sales reports directly from salespeople and bypasses the CRM, salespeople will simply ignore the CRM. It sends a signal down the chain that not using the CRM is not only condoned but actually OK.

Management needs to lead the usage of the CRM and lead by example. Many managers use the approach of “If it’s not in the CRM, it didn’t happen”.

9. Lack of change management

It is also important for management to oversee, guide, involve, and lead the changeover. Dumping a new sales CRM on the team one day will just engender resentment towards it.

According to a survey conducted by Forrester Research, “people” issues are the biggest challenge to a successful CRM implementation. These “people” issues fall into three distinct categories.

10. Communicate not very often

Hold regular meetings to ensure parties are updated on what’s been achieved, what hasn’t, what’s going to happen next, etc. Ask for rep feedback on the process so far and any ideas to improve upon it. And above all, celebrate your wins and celebrate them often.

11. No CRM champion

A good CRM system will have great customer support. However, it is not a match to having an internal CRM champion. Nothing is as effective as having someone on the team to lead by example. They should be there to answer questions from the sales team when they run into issues, shout about the benefits and results of the CRM loudly and often and watch for the team avoiding using it for all kinds of reasons.

12. You use sales compensation to drive CRM adoption

It can drive the wrong kind of engagement and result in an increase in resentment by the sales team. They need to see the benefits for themselves, not for management.

Summary

Top 5 CRM solutions for small business

1. OnePageCRM
2. Close
3. Pipedrive
4. Zoho CRM
5. Salesforce

Top three benefits of using a CRM system

1. CRM helps you keep all information in one place
2. CRM can increase your bottom line
3. Put this information into action

5 signs you need a CRM

• Leads and opportunities are not followed up and lost.
• You begin to get bad customer or potential customer feedback.
• You lose important data. Well, you know it is somewhere but you can’t remember where.
• The sales cycle has too many touchpoints to keep track of.
• You can no longer remember the history of leads and customers.

8 steps to choose the best CRM for your business

1. List out the top 2-3 business objectives you want to achieve
2. Based on your top objectives, do a google search or ask around your network for recommendations
3. Choose a list of core features you need
4. Obtain the total price (incl. all setup, integration, onboarding costs and training)
5. Get a demo or webinar from each
6. Find out how good their support is
7. Read customer reviews
8. Check how secure they are

How to implement a CRM system in a small business

1. Set up your CRM system
2. Clean and migrate data
3. Decide on the best data segmentation
4. Integrate your CRM with other apps
5. Automate repetitive tasks
6. Install available mobile apps
7. Appoint a CRM champion
8. Don’t forget about security
9. Ask for feedback to increase CRM adoption rate
10. Involve the whole team

Top 12 reasons why CRM adoption fails

1. Business goals for the CRM are not defined
2. Lack of ownership
3. System is difficult or slow to use
4. Too much data entry
5. Poor training and onboarding
6. Poor choice of CRM
7. Your whole company does not use the system
8. Management does not use the system
9. Lack of change management
10. Communicate often
11. No CRM champion
12. You use sales compensation to drive CRM adoption