Tablet with words "customer" on it. Concept: CRM system
Sean Salas
By: seansalas
Read in 6 minutes

What is a CRM System or Customer Relationship Management System?

Keeping track of your customers is vital to the success of your small business. A CRM system, or Customer Relationship Management system, can help you. But, what exactly does a CRM System do? 

What is a CRM System?

A CRM system is a database that tracks a business’s interaction with its customers. The type of CRM system can vary from a simple excel data sheet tracking your customer interactions to a fully-integrated online system providing real-time information on customer data, marketing campaigns, and performance.

In this article, we will evaluate the advantages of having a CRM system. We will also expose the different types of CRM systems, so you can find the one that best suits the needs of your business.

Advantages of a CRM System

If you operate a customer-oriented business with more than a handful of clients, then your business needs to have a CRM system.

Not having a CRM system doesn’t mean your business is going to fail. However, it will be at risk of not maximizing the earnings potential of its customers. Moreover, your business could be at a competitive disadvantage, given competitors with Customer Relationship Manager systems will know their customers better.

These are the two key benefits of having a CRM system:

  • Customer Interaction Tracking

A CRM system evaluates how your business is interacting with its customers. If interaction with your customers is 100% transactional (at the office or retail store), then you have a problem.

Find new, innovative ways to interact with your customers through social media, newsletters, website, Yelp, and events. Your customers will love you more for it. More love, more money.

  • Customer Performance Tracking.

Tracking a customer’s performance allows you to maximize your earnings potential. Key data points that you should track include: frequency of customer purchases (daily, annually), revenue and profit per customer, and new and lost customers.

Must-Haves in a CRM System

  • Contact management. You can access, add, and update all the information about your customers (like contact and conversation history) from one single place.
  • Lead management. Monitor your company’s activities, progress, and targets.
  • Sales forecasting. Your sales team can identify leads, monitor their own progress, and create forecasting reports that sales managers can use.
  • Instant messaging. Your employees can send and receive real-time instant messaging, improving communication, support, and workflow.
  • Email tracking and integration. Emails integrate with Outlook and Gmail so you can create and manage them from one single place.
  • File sharing. Team members can upload information, content, and files to a central server so they can be easily shared and accessed.
  • User-friendly dashboard. Dashboard displays can be customized to each of your employees’ needs.

What CRM System is Right for You?

The rule of thumb here is: start simple and then build-in complexity.

At Camino Financial, our first CRM system was an excel sheet. By starting simple, we figured out what were the customer data points we wanted to capture. In addition, starting simple helped us establish administrative procedures to track our customer information.

Establishing processes to update a CRM system is as important as the CRM system. You may also want to consider using existing financial tools, such as QuickBooks, as a way to begin tracking customer performance. But existing financial tools or an excel sheet will take you only so far.

A more sophisticated CRM system will give you more capabilities such as customer forecasting, mobile data entry and tracking, social media integration, and marketing campaign optimization. Depending on your budget and type of business, there are many different CRM systems that may suit your business needs.

What Are the Top 5 CRM Systems?

These are Camino’s top choices:

  1. Hubspot
  2. Podio
  3. Apptivo
  4. amoCRM
  5. Freshsales (Recommended for restaurants)

All these products have two things in common: they all are affordable and simple to use. We encourage you to find there the CRM option that best suits your small business. The Customer Relationship Management system of your choice will make a difference in the way you interact with your customers, thus having a great impact on your business.

Investing in technology is always a wise choice for your business, but it can come at a cost. If you need an injection of capital to purchase the latest technology and software for your business, consider applying for a business loan from Camino Financial.

Submitting your application won’t impact your credit and you will know immediately if you pre-qualify. Find out now!

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