Customer Relationship Management Software Buyers Guide

1. What is CRM software?

Expanding your customer base and retaining existing customers are goals common to every business. But as your customer numbers grow, using manual tools to track their details becomes tedious. That's where customer relationship management (CRM) software can help.

In this guide, we explain everything you need to know about CRM software -- what it is, how it benefits your business, which features you should choose, and how you should go about choosing a tool that best suits your needs.

CRM software is a technology solution that helps your business manage the data of current and potential customers to maintain healthy relationships with them. It lets you track leads, send marketing emails, automate sales tasks, create custom reports, and much more.

CRM software, in short, is a centralized repository of all customer-related information and details. It provides your sales, marketing, and customer service teams a unified view of every client interaction.


2. What does CRM software do?

A CRM system assists your salespersons, marketers, and customer service agents with various activities, including:

  • Storing customer data at a centralized location: Your staff members interact with multiple customers every day and collect a lot of information about them. CRM software provides a centralized system to store and organize all the information, ensuring no data is lost, siloed, or misplaced.
  • Tracking sales opportunities: With all customer information stored at a centralized location, you can target customers with the right products or services. You can use the collected data to identify prospects and their needs as well as track their journey through the sales pipeline.
  • Managing marketing campaigns: CRM software helps you plan marketing campaigns, taking into consideration the interests and preferences of different customer segments. You can also use it to send automated marketing emails to your target audiences and increase their chances of conversion.
  • Automating customer management workflows: Manual data entry and repetitive tasks such as following up with customers via email are time-consuming and can affect the productivity of your sales reps. A CRM system helps make your sales force more efficient by automating customer management tasks such as scheduling client appointments, moving leads through the pipeline, and sending communication emails.

3. What are some common features of CRM software?

What a CRM software solution can do will vary based on the features it offers. Some CRM tools offer plenty of features, while others provide only the basic functionality needed to manage customer data and interactions.

Most CRM solutions offer the following common features:

  • Contact management: Store the contact information of customers and prospects, including their name, address, and contact number, in a centralized searchable database.Contact management in Centra Hub CRM

Contact management in Centra Hub CRM (Source)

  • Lead management: Manage the process of converting prospects into potential customers by identifying, scoring, and moving leads through the sales pipeline.
    Lead management in HubSpot CRM

Lead management in HubSpot CRM (Source)

  • Interaction tracking: Document customer conversations, track the activities of specific contacts, and add notes about client interactions.Interaction tracking in Salesflare

Interaction tracking in Salesflare (Source)

  • Workflow automation: Automate tasks that you're handling manually, such as sending marketing emails, scheduling follow-up events, and setting criteria for lead qualification.Workflow automation in Salesmate

Workflow automation in Salesmate (Source)

  • Pipeline management: Get a 360-degree view of your entire sales pipeline. Track which stage every lead is in and the number of leads you have under different stages such as lead nurturing or closed deals.
    Pipeline management in Salesflare

Pipeline management in Salesflare (Source)

  • Quotes/proposal management: Create and send quotes to customers. Quotes include details about the product or service cost, tentative billing structure, and services to be provided at the decided price.Proposal management in Hanna CRM

Proposal management in Hanna CRM (Source)


4. What are some additional features of CRM software?

Besides the common features, advanced CRM tools offer other features as well. Some of these include:

  • Reporting and analytics: Get reports on various CRM metrics such as daily, weekly, and monthly sales revenue or sales rep performance.
  • Sales forecasting: Predict your organization's sales growth for any specific period (e.g., a month or quarter) based on your pipeline of potential sales deals and other market factors.
  • Task management: Allocate job responsibilities or tasks to the members of your team and track their progress.
  • Marketing automation: Automate marketing tasks such as sending emails, posting on social media, and creating ad campaigns.

5. What are the benefits of using a CRM system?

Investing in CRM technology benefits multiple teams - sales, marketing, customer service, business development, and more. Let's look at some benefits your organization can get from a CRM tool:

Advanced customer insights

Sales is a data-driven process, and your customer relationship management software is a treasure trove of data. Analyzing customer data can help you understand their shopping styles, favorite products or brands, payment preferences, and more. Most CRM tools offer built-in data analytics features, but if you want advanced data analysis options, you can export your CRM data to any BI tool to dive deeper.

Higher productivity for sales reps

CRM software is a one-stop location to find customer information. Your employees don't need to call or email their colleagues repeatedly to find out about customer interactions or how far in the pipeline a lead has progressed. Everything they need is stored in your CRM tool's database. This saves countless hours spent in back-and-forth communication between the sales and marketing teams.

Consistent experience for customers

When buyers interact with different customer service agents or marketers, they often receive inconsistent responses. CRM software helps solve this issue by providing all your staff members up-to-date information about the customer interaction history. This helps ensure consistency and continuity in customer conversations.


6. How much does CRM software cost?

Most products in the market are priced on a "per user, per month" basis and can be broken down into three pricing tiers based on their starting price.

Price ranges:

  • $0 - $12
  • $12 - $37
  • $37+

*The pricing included in the table is for the entry-level/lowest priced offering that was found on the vendor website on Dec. 21, 2021.

The above list includes pricing for the base plans of these products. An enterprise or premium product that is priced higher may include additional features such as artificial intelligence bots, sales forecasting, API calls, and partner management.


7. What are the different types of CRM software?

Knowing about the different types of CRM software will help you select a platform offering features you need. Though software vendors don't explicitly market their products by type, you can identify them by their features. Here are the common types of CRM software:

Operational CRM software

This type of CRM solution is heavily geared toward automating sales and marketing functions, such as lead management and campaign management, to improve operational efficiency. Key features of operational CRM software include contact management, lead scoring, and sales and marketing automation. Businesses struggling to manage their customer contacts and seeking automation in their customer relationship processes can opt for this type of CRM solution.

Analytical CRM software

Analytical CRM software is powered by features that help organize and analyze customer and sales data. These CRM tools focus heavily on reporting analytics and provide details of metrics such as the average deal cycle, recurring revenue, top sales accounts, and customer retention rates. Data mining and sales forecasting are the prominent features of analytical CRM tools. If you're looking for a tool that provides customer insights besides data management, opt for this type of CRM platform.

Collaborative CRM software

A collaborative CRM tool focuses more on the ability to share customer information between teams. It primarily helps improve customer service, customer retention, and customer satisfaction. Interaction management, relationship management, and document management are some of its main features. Businesses looking to improve collaboration between their internal teams as well as external stakeholders can opt for this type of CRM application.


8. Which tools can integrate with CRM software?

The customer information stored in a CRM system is required across business functions to support operations. For instance, product development teams will be able to better understand customer requirements from the customer conversations stored in your CRM application. Thus, integrating your CRM tool with other software systems is very helpful.

Plan for integrations before implementing CRM software to avoid the need for complex technical intervention later on. Here are some common tools that integrate with CRM software:

  • Email: Being able to connect with email is one of the most important integrations for any CRM software. This integration makes it easy to send and read emails directly from your CRM app.
  • Social media: Integrating your CRM app with your social media accounts will help streamline and automate posting on Facebook, Twitter, Instagram, and other channels.
  • Web form integration: Lead generation web forms on your website should sync with your CRM platform, so your contact list is automatically updated with details of all new leads.
  • Communication software: Integrating communication tools such as Slack and Zoom will help reduce the need to go back and forth between software apps for chatting with your clients or team members or even calling them.
  • Accounting software: Integrating accounting software such as QuickBooks with your CRM tool can give you important updates about the status of client transactions, purchase data and value, and invoices.
  • Marketing automation and customer service software: While marketing automation and customer service software have much in common with a CRM solution, if you're using separate tools then integration is essential to avoid losing critical data and to extend their functionality.

Learning about CRM software market trends will help you understand the latest practices in the CRM technology space and plan your investments accordingly. It'll also help you ask the right questions to your CRM provider about what to expect from their product in the future.

  • Preference for cloud-based CRM software: More companies are investing in cloud-based CRM solutions because of their lower costs, easy scalability, and shorter implementation time. According to Gartner, 70% to 80% of CRM software investments are for Software-as-a-Service (SaaS) tools.
  • CRM software vendors offering AR, VR, AI, and other latest features: Social CRM (with integrations to social media), mobile CRM (accessibility on mobile devices), automated customer conversations, and robotic process automation are features being added to CRM solutions. AI and AR/VR are other features that are being built into CRM tools to meet evolving customer expectations.
  • Vendors are targeting businesses with industry-specific CRM software solutions: CRM providers are offering CRM solutions targeted at specific industries. These CRM software packages offer features, templates, and regulatory guidance customized to various industries. You can opt for construction CRMreal estate CRMhealthcare CRM, etc. depending on your industry of operation.

10. Which is the best CRM software?

This is one of the first questions you may ask when evaluating CRM software. It's difficult to answer it, considering there are hundreds of products in the market.

Capterra's Top 20 CRM Report can help you here. We've looked at various parameters including customers' reviews and rating and general web search interest to identify the top 20 leaders in the CRM software space.

Snapshot of our Top 20 CRM report

Snapshot of our Top 20 CRM Report


11. How to choose the right CRM software?

The best software for one business may not be the most suitable for another. Don't blindly choose any CRM software but, instead, evaluate the tool's capabilities against your CRM needs. Choose a solution that is easy to use, matches your needs, and is within your budget. Also, don't forget to check whether it supports integration with your existing systems. You may also want help migrating data from whatever existing modes you're using to track customer data.

That may seem like a lot to keep track of. Don't worry! Head over to our CRM directory that features 800+ CRM products. You can sort through them using filters for price, features, deployment options, and the number of users supported. Shortlist six to eight CRM software solutions suitable for your business. Then read through the user reviews of the shortlisted products to understand the pros and cons of each product.

Also, take demos or free trials of these tools to get a feel of their interface and capabilities. Contact the vendors to understand their offerings better and negotiate for a good deal. And finally, sign up with a product you feel most happy and comfortable with.

Screenshot of Capterra's CRM directory

Screenshot of Capterra's CRM directory

In case you want more personalized help and would like to talk to one of our advisors to understand CRM software better, click here to chat with us.

Other tools that can help in your CRM software selection journey

1. Customer Relationship Management Software Pricing Guide

2. Customer Relationship Management Software Top Features Comparison Guide

3. Top CRM Software Roundup Infographic

Note: The applications selected in this article are examples to show a feature in context and are not intended as endorsements or recommendations. They have been obtained from sources believed to be reliable at the time of publication.



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