8.5 min

What is CRM Software and How Does it Work?

CRM is one of those terms that gets thrown around a lot in the business world. But what does it actually mean? And why should you care?
 crm software main blog image, a women sitting with a laptop
Written by
The Storyteller
Published on
March 10, 2023

Table of Contents

  1. What is CRM?
  2. How do CRM platforms work?
  3. What Makes a Good CRM?
  4. Top CRM Providers
  5. Benefits of CRM systems
  6. Implementing a CRM Solutions
  7. Conclusion

So why should you care for CRM? Well, for starters, if you're running a business, you probably care a lot about your customer satisfaction. After all, your customers are the ones who keep you in business! And that's where CRM systems come in.

According to recent estimates, about 22% of sales professionals still don't use any CRM systems, unaware of the benefits they're giving up.

In this blog post, we'll take a deep dive into what CRM software is, how it works, and how to choose the right one for your team. We'll also discuss the features that make a good CRM system and the benefits it can offer businesses.

crm system illustration
crm illustration

What is CRM software?

Let's start with the basics: what exactly does CRM stand for? CRM stands for Customer Relationship Management. But what does that actually mean? Essentially, a CRM system is a tool that helps businesses manage their interactions with existing and potential new customers.

It's a way to keep track of who your customers are, what they've bought from you, what their preferences are, and how you've communicated with them in the past.

For example, let's say you run an online store that sells pet supplies. With a CRM platform in place, you could track each customer's purchases, along with any other interactions they've had with your brand. It's like having a stalker, but in a good way!

Over time, you might notice that a particular customer tends to buy a lot of cat food, but never buys any toys. With that information, you could send them targeted promotions for cat toys, or even reach out to ask if they have any feedback on your toy selection.

CRM software info summary / team photo

Customer relationship management (CRM) system has become an essential tool for businesses of all sizes. It helps organizations automate repetitive tasks and streamline business processes.

When you're just starting out, you might be able to keep track of customer interactions in a spreadsheet or a basic contact management tool. But as your business grows, you'll quickly find that it's impossible to keep track of everything manually. That's where a CRM system can really shine, by automating many of the tedious tasks associated with managing customer relationships.

At its core, CRM software helps businesses manage their interactions with customers and improve customer relationships. It enables organizations to store customer data, track customer interactions, and automate business processes.

crm tools can store customer data and automate sales process. / illustration

CRM software also provides insights into customer behavior, which can help businesses make more informed decisions. By consolidating customer data in one place, the CRM system provides a 360-degree view of customers.

It helps businesses personalize their interactions, elevate their business strategy, and manage all the different touchpoints they might have with their consumers, from emails and phone calls to website visits and social media interactions.

elevate your business strategy / illustration

How does CRM software work?

Customer Relationship Management software typically consists of a database that stores customer data, a user interface for accessing that information, and a set of tools for automating business processes. The database can store a wide range of information, including customer contact details, purchase history, and customer service interactions.

The user interface provides access to this information and allows businesses to view and edit customer data. It also provides tools for creating customer profiles, managing customer interactions, and tracking sales leads.

crm systems automate repetitive tasks / illustration

The automation tools can help businesses streamline their processes by automating repetitive tasks such as data entry, email campaigns, and customer follow-ups. This frees up time for employees to focus on more strategic tasks, such as building relationships with customers.

Now that we've covered what Customer Relationship Management software is and how it works, let's look at what makes a good CRM platform. A good CRM software should have the following features:

With CRM tool you can monitor  your customer's journey

What Makes a Good CRM System?

1. User-Friendly Interface

The best CRM software should have an intuitive and user-friendly interface. This makes it easy for you and your team to learn how to use the software quickly and effectively. Look for software that has a clean and organized dashboard, with simple navigation and clear labeling of functions. The software should be intuitive and easy to use, even for employees who are not tech-savvy.

2. Customizable Features

Every business is unique, so it's important that your CRM software can be customized to fit your specific needs. Look for software with crm features that allows you to create custom fields, workflows, and reports, as well as integrate with other tools and software you use.

3. Industry-Specific Features

Some CRM systems offer industry-specific features that can be beneficial for businesses in certain sectors. For example, a real estate company may benefit from a CRM tool that includes property management features.

4. Customer Data Security

All your customer data is sensitive information, and it's important that your CRM tools provide strong security measures to protect it. Look for CRM solutions that offer features like encryption, two-factor authentication, and regular data backups.

5. Mobile Accessibility

In today's fast-paced business world, it's important to be able to access your CRM software on the go. Look for software that has a mobile app or is optimized for mobile use, so you can easily access customer information and manage tasks from your smartphone or tablet.

6. Integration with Other Tools

Your CRM software is just one piece of the puzzle when it comes to managing your business. Look for software that integrates with other tools you use, such as email marketing software, project management software, or customer support software.

7. Reporting and Analytics

The software should provide insights into customer behavior, sales performance, and other key metrics to help businesses make informed decisions.

8. Good Customer Support

Finally, make sure the CRM software you choose has good customer support. Look for software that offers a variety of support options, such as email, phone, or live chat, and has a reputation for providing helpful and responsive support.

best CRM software should have good customer support / illustration

With the right CRM software in place, you'll be able to build stronger, more meaningful relationships with your customers, and grow your business in ways you never thought possible. And who knows, maybe you'll even have a little fun doing it!

CRM software can vary widely in cost, from free options to enterprise-level solutions. Consider your budget and the features you need to find the best fit for your business.

Now that we've covered what makes good CRM software, let's take a look at some of the top CRM tools available today.

Choose the right CRM platform for your team / photo

Top CRM Software Options

1. Zoho CRM

With a user-friendly interface, customizable features, and strong data security, Zoho CRM is a top choice for small to medium-sized businesses.

2. Salesforce

One of the most popular CRM software options, Salesforce offers a wide range of features and integrations, making it a great choice for larger businesses.

3. HubSpot CRM

HubSpot offers a free CRM software that is easy to use and integrates with other HubSpot tools, making it a great choice for small businesses.

4. Monday.com

With a straightforward, understandable interface and a custom design, Monday.com really gives you the power to concentrate on what your company needs in order to succeed and expand.

5. Pipedrive

Pipedrive offers a simple and intuitive interface, making it easy to learn and use. It also offers strong sales management features, making it a great choice for sales-focused businesses.

These platforms vary in price, features, and complexity, so it's essential to do your research before choosing one.

CRM Systems need to provide strong security for customer data / illustration

Benefits of Customer Relationship Management systems

Implementing CRM software can offer numerous benefits to businesses, including:

1. Improved customer relationships:

By providing a central repository of customer data, businesses can better understand their customers and provide more personalized service (which can lead to more customer loyalty)

2. Increased efficiency:

Automation tools can help businesses streamline their processes, reducing the time and resources required to manage customer interactions.

3. Better sales performance:

CRM data can help businesses track sales leads, manage sales pipelines, and provide insights into sales performance, helping sales an marketing teams close more deals.

4. Improved customer retention:

Businesses can improve customer retention rates by providing better service and more personalized experiences.

5. Greater visibility into business operations:

Reporting and analytics tools can provide insights into business operations, helping businesses make more informed decisions.

crm systems are essential for businesses of all sizes / photo

Implementing a CRM Solutions

Once you have chosen the right CRM solutions for your business, the next step is to implement them effectively. Here are some tips for successful implementation:

Define Your Objectives

Before implementing any CRM systems, it's important to define your objectives and goals. This can help you determine how to customize the system to meet your specific business needs.

Train Your Team

To ensure a smooth implementation, it's important to provide training to your team. This can help them understand how to use the system effectively and take advantage of its features and functionality.

Customize the System

Customizing the CRM features to meet your specific business needs can help you get the most value from it. This can include customizing fields, workflows, and reporting features.

Clean Up Your Data

Before migrating your customer data (or all data in general) to the new system, it's important to clean it up and ensure that it's accurate and up-to-date. This can help prevent errors and ensure that the system is working effectively.

Test the System

Testing the CRM system before going live can help you identify any issues and ensure that it's working as intended. This can include testing workflows, reporting, and data migration.

Monitor and Evaluate

Once the system is live, it's important to monitor and evaluate its performance. This can include tracking key metrics, such as customer satisfaction, sales, and revenue, and making adjustments as needed.

Train your team before implementing CRM systems


So, there you have it: a brief overview of what CRM software is and why it's useful. Of course, there are a ton of different CRM services out there, each with their own strengths and weaknesses.

Not all CRM systems are created equal. Some are great, and some are... well, not so great.

It's like the difference between having a butler and having your weird cousin who always smells like cheese try to manage your customer relationships. One is smooth, sophisticated, and knows what they're doing. The other is... not. The key is to find the one that works best for your business, based on your specific needs and goals.

But no matter which CRM software you choose, the most important thing is to use it consistently and effectively. After all, even the best CRM software is only as useful as the data you put into it. So, take the time to learn the ins and outs of your chosen platform, and use it to build better relationships with your customers.