What Is A CRM System and Why Do I Need One?


A customer relationship management (CRM) system is a software program that tracks and records interactions with existing and prospective customers. Ideally, the information captured by the CRM system improves company performance in the areas of sales, marketing, or customer service (or all three).

Many small businesses don’t have a need for such advanced and costly software, but eventually, your business will grow to the point that it becomes an essential part of your day to day operations.

Which Teams Can Use the CRM Effectively?


Sales teams are in a great position to make use of CRM systems as a means of keeping complete and up to date customer information. It can keep records of all contact that has been made with a given customer, with the ability to set notes and follow-ups for future appointments or action. A properly kept record can keep sales efforts coordinated and customers safe from irritating duplicate calls, inappropriate sales offers, and abreast of relevant promotions and updates.

The most useful sales automation programs also feature reporting options such as sales funnels, targets, projections, and lead quality so that the salesman and his manager can plot sales campaigns and evaluate performance. Some programs can also be linked to production so that sales teams will be able to track customer orders on their behalf.


A comprehensive customer database is a goldmine for marketers. Marketing managers can sift through customer data for patterns and trends with regards to customer demographics, buying habits, and product preferences and tailor their marketing plan accordingly. Contact information from these customers and prospects can be used to create mailing campaigns to launch new products or announce promotions and sales (provided the customers have opted in). CRM tools can also track the effectiveness of these campaigns by recording stats such as clicks, responses, and registrations.

Customer Service

Customer service and support teams can also use CRMs to process and solve customer requests. If the sales and customer service databases are linked, then sales teams can be notified of any issues that customers are facing with their orders and work with support to get them solved. Loyalty rewards programs can also make use of CRM software as a further aid to marketing and sales initiatives.

What are the Overall Benefits of a CRM?

So now we know how individual teams can utilize a CRM, but what are the overall advantages for a company?

  • Increased productivity. Because all information goes to a single database, all teams involved are more coordinated and there is less re-work and duplicate effort. Sales staff can become more efficient and effective, while managers are better able to track and manage their teams’ performance. Automated alerts can reduce the number of missed appointments and flag issues so other team members can assist.
  • Better customer satisfaction. More coordinated sales, marketing, and customer service efforts mean that the customers will be better serviced. Issues can be flagged for further action and alerts set for important milestones. Better response rates overall will mean better client feedback.
  • Targeted campaigns. An accurate database means better information that marketing and sales managers can examine when developing their campaign strategies. Managers can develop targeted campaigns that will be more relevant to prospects and result in better conversion rates.
  • Employee management. The CRM can be used to assist in employee management, specifically for tracking the performance of sales and customer service staff. Sales funnels, contact reports, and customer service databases can serve as support material for any commendations and promotions, or as evidence for termination or remedial/punitive action.

Are There Any Drawbacks to A CRM?

No solution is perfect, of course. There are certain drawbacks that organizations will have to address when implementing a CRM system:

  • Demanding maintenance. The CRM’s database is only as good as the information you put in it. Data needs to be keyed in correctly and updated on a regular basis, in addition to someone going in every so often to clean up the inevitable data errors.
  • Adoption issues. Many employees will resist the change to the new CRM, preferring instead to work the old-fashioned way. If this resistance isn’t dealt with, the data of your new CRM is going to be full of holes, rendering it useless.
  • Process-heavy. A CRM’s very nature demands that users follow specific procedures to enter information and create new records. If not set up properly, this process can become obstructive and slow down workflow.
  • High cost. Most CRM software requires a significant financial investment before companies realize their benefits. Lower priced solutions are available, but they have limited features and may not scale well to larger organizations.
  • Integration issues. Unless your other business software is from the same manufacturer, like Microsoft or SAP, your CRM may have difficulty integrating with other programs, which will require you to switch back and forth between applications.

Garbage in garbage out

Can you Give me Some Examples?

SAP OnDemand. One of the biggest names in the Enterprise-level software industry, this German company has recently branched out into providing Software-as-a-Service (SaaS) solutions such as SAP OnDemand. It is very reliable and integrates with SAP ERP software, although this is more suited towards large companies. It also has some usability issues that keep it from getting better reviews.

Siebel CRM. Owned by Oracle, Siebel was one of the pioneers of the CRM field. It has a very deep functionality that allows it to be customized and adapted into nearly every aspect of a business, including order fulfillment and customer service. It’s priced at the high end, but worth every penny. Large companies will probably get the most out of this.

Dynamics CRM. Microsoft’s Dynamics CRM is the de facto CRM for small businesses, with the most recent update proving to be the most stable and user-friendly version of the Dynamics line. It can either work as a hosted solution or installed on-premise, which gives businesses a little more flexibility in how they’d like to apply it. It’s economically priced and integrates perfectly with MS Outlook.

Ringgle CRM. Owned by SpellBrand, our own CRM system is suitable for small business owners and is less complex than the examples above. It was designed by a business owner for business owners and hence is lightweight and easy to use.