What is CRM? (and how can it help your business grow in 2024)

In the days before the internet, it was pretty straightforward for small business owners. Face-to-face, they could get to know their customers’ preferences directly, make the best recommendations from over the counter and take the time to answer every query. However, with more strict demand for personalisation from customers, the rise of ecommerce, and the development of technologies this has become more difficult – and that’s where CRM for small businesses comes in to save the day.

A CRM system keeps your customer contact details updated, tracks your customer interactions, and manages your accounts. By equipping your business with this data, you can improve customer relationships and continue to add value. CRM is therefore a universal tool that is useful for all your teams who interact or deal with customers in some shape or form, from sales to marketing to customer services.

What does CRM stand for?

Short for Customer Relationship Management, CRM is a comprehensive software solution that allows you to manage your customer relationships. From collecting customer data to strategising how best to follow up with a lead, CRM gives you the insights necessary to retain and grow your customer base.

See our guide to CRM examples to learn more about some of the tools on the market.

What is CRM?

Customer Relationship Management (CRM) can be many things; a strategy, a process, a business goal. Here, though, we focus on CRM as a software; a cloud-based, digital tool that stores, organises, and manages data about your customers – and how they interact with your business. 

At its most basic level, CRM software is a digital version of an address book – a place to securely store all contact information. Your CRM database stores all of the valuable data you have about your customers, which is produced through every action and interaction. This data includes:

• Name, title, and email address
• Date and nature of last interaction
• Visits to your website and engagement with your brand
• Their previous orders and spend
• Even personal information such as their interests and hobbies, or the name of their dog (for the sake of small talk)

A CRM database is your foundation for success. And yet, for teams focussed on crunching the numbers to analyse performance, increase revenue, and drive growth, it’s so much more – it’s the building blocks of scalability and sustainable success.

That’s because CRM software allows you to not only store your business’ crucial client, lead, and prospect data, but to use it, too. Clever CRM automations mean it can feel effortless to leverage your customer data into effective comms or sales pipelines.

For sales teams, that means:

• Convert more leads – benefit from complete lifecycle management, from a customer’s first interaction, all the way to a purchase
• Get a 360-degree view of your pipeline – easily monitor and track targets with drag-and-drop pipeline management
• Don’t miss out on a deal – review historic, current, and projected deals, and engage lapsed prospects
• Plan for the future – engage with the data that matters most to your business to produce accurate sales forecasts and reports

For marketing teams, CRM will help you:

• Create beautiful emails – use templates to craft clever, colourful communications
• Boss your campaign management – document ideas and delivery methods, and target the right audience with the best message
• Coordinate events and projects – advertise for, register, and manage attendees for events, and push projects forward more effectively
• Understand the customer journey  – chart customers’ interactions with your business, and engagement with your emails and phone calls

For customer services teams, CRM allows you to:

• Manage customer interactions – store all conversations with your clients in a central, easily-accessible location
• Unify your communication channels – pull info from email, social media, phone calls, SMS, and live chat into a single, digestible stream
• Detail preferred communication methods – record how and when customers like to be contacted, and catch them at the right time
• Get better at handling complaints – receive a notification whenever someone mentions you on social media or complains, so you can deal with it instantly

How much does CRM software cost?

Cloud-based CRM software can cost your business anything from £12 to £200 per month. The specific cost will depend on several factors, including the size, scope, and requirements of your business, plus any initial onboarding costs during your CRM implementation process.

CRM software is commonly priced per user, per month – in other words, the more employees you’ll need using the system, the more you’ll pay. CRM software is typically tiered, with different plans available at ascending prices, each unlocking more features than the last.

Head to our dedicated resource on CRM costs to find out how much a CRM system will really cost you. Or, if you’re still wondering what cloud-based CRM software is, we’re about to explain – so read on.

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What is cloud-based CRM?

CRM can be deployed as an on-premise, cloud-based, or hybrid solution. 

An on-premise solution is deployed on your business’ premises, and you’ll own and operate all the hardware involved. You’ll get ultimate control over your own data and software, too – though you’ll have to stomach the extra costs involved, which include implementation, installation, data migration, and maintenance.

A cloud-based solution, however, lets you sidestep these fees. Your data will be stored securely on the servers of your chosen CRM software provider, and you’ll pay just a lone monthly fee to lease the software.

The big benefit of cloud-based CRM software is its dynamism. There’s nothing to install or download – in most cases, you can access all your data from a web browser. Better still, cloud-based CRM facilitates the real-time collaboration of remote colleagues, from wherever in the world they are (providing there’s an internet connection there, of course).

Hybrid solutions are a bespoke blend of the two. Better-suited to larger, enterprise-level businesses, they offer the highest levels of customisability… at a price.

Out of these options, we most recommend cloud-based CRM software. Its benefits include:

• Tiered pricing – cloud-based CRM providers offer options to suit every budget, and many offer a free (albeit limited) package
• Cheaper – a low monthly fee trumps the heady multitude of costs that come with an on-premise system
• Ease of use – no servers means no maintenance, and none of the costs and hassle that come with it
• Scalability – use only what your business needs, and add to it as you grow
• Quick setup times – it’s an online solution, so you can usually be up and running quickly and easily
• Additional services – vendors provide training and customer support
• 24/7 access – as the CRM software is hosted on the cloud, you’ll only need an internet connection and a smartphone to use it
• Up-to-date – cloud-based CRM software providers offer automatic updates, keeping you up to speed with the latest developments

To find out which cloud-based CRM software is right for you, check out our recently updated guide to the best CRM systems for small UK businesses. Or read on, as we finish up with our top tips for selecting a CRM provider.

Choosing the right CRM system for your business

In order to choose the right CRM system, you’ll need to understand which functions you might use. Stel Kabouridis, a CRM expert from a large lead generation company, gives the following examples of how different businesses might use CRM software:

Any business could use CRM software to inform customers about one time offers, or other special deals.

A website, blog, or publishing-based business could use CRM software as a forum to build brand loyalty, and to promote engagement via newsletters and other correspondence.

They could also use the software as a consistent method of driving return visitors to their sites. This in turn would raise their domain authority, as well as promote their commercial pages.

An ecommerce business, or any business with multiple conversion points, can use CRM software to help with upselling. The software could also help nurture users towards a conversion – for example, a customer who has searched for “how to build a website” could eventually be steered towards an affiliate website builder they can sign up with.

If this is your goal, we recommend using our free tool to get quotes, and to help you compare and contrast the range of CRM software providers out there. It takes 30 seconds, and there’s just a couple of steps involved.

Simply provide us with a few details about what kind of CRM software your business needs. Are there specific features you require? How many users will it need to support? Let us know.

You’ll then receive quotes from leading CRM system suppliers, tailored to your business and requirements. It’s the quickest, easiest way to get matched with the right CRM software for you.