A customer service representative talks to a customer using a headset.
Customer relationship management (CRM) software helps businesses keep track of their customers in a central location, with each employee having access to the information. — Getty Images/Hill Street Studios

A customer relationship management (CRM) platform tracks customer data for marketing, customer service, and sales teams. But pricing and functionality differ among solutions. Asking the right questions before purchasing CRM software helps you get the best tools for your budget. Use this guide as a springboard to draft a list of questions to ask CRM vendors during product demos.

1. What is customer relationship management?

Customer relationship management refers to the systems and strategies companies use to catalog and track current and prospective client interactions. Along with contact information, various teams may track purchases, the sales funnel, and the customer experience. The purpose of a CRM tool is to build better relationships, leading to more sales and happy customers. [Discover use cases, benefits, and more in our CRM software guide.]

2. What is the difference between CRM and ERP?

Enterprise resource planning (ERP) and CRM software are similar, as both help your small business become efficient; however, each system uses a different approach. CRM platforms focus on customer relationships, whereas ERP systems manage internal business processes. Customer service, marketing, and sales reps use CRM solutions. On the other hand, finance, inventory, and procurement professionals leverage ERPs.

3. Do I need a CRM system for my small business?

Basic contact management systems or spreadsheets may work for startups. But as your small business grows, CRM software allows you to fill your sales pipeline and achieve your customer retention goals. Having one data source ensures service and sales reps have the correct information, eliminating the disjointed experiences that lead to dissatisfaction.

[Read more: 6 Signs You Should Invest in CRM Software]

4. What can CRM software do?

CRM tools are relatively flexible, and small businesses can leverage various features to suit their needs. The bottom line is that a cloud-based CRM program puts customer data on a single platform. It lets different departments view previous interactions and personalize follow-up messages.

A good CRM solution can:

  • Help your sales team generate more leads.
  • Improve customer relationships.
  • Speed up your sales cycle.
  • Monitor customer experience levels.
  • Reduce manual data entry.
  • Increase revenue.

5. How much should my company spend on a CRM system?

Software budgets vary, and you should consider the total cost of ownership while evaluating the value a CRM platform will add to your business processes. Most CRM vendors use a tiered pricing model, with higher-priced plans offering more features. They also charge a monthly per-user fee and may provide discounts for annual prepayment.

Many CRM systems have a free version, including Zoho CRM and Freshworks CRM. Others, like HubSpot's sales CRM software, allow business owners to mix and match plans.

The best CRM platforms are adding artificial intelligence capabilities to streamline the sales process and generate insights.

6. What CRM features do I need?

According to GetApp, “88% of CRM software buyers want contact management and lead management features.” However, the best CRM platforms are adding artificial intelligence capabilities to streamline the sales process and generate insights.

In general, many companies look for the following CRM features:

  • Task management.
  • Email marketing.
  • Sales forecasting.
  • Deal management.
  • Mobile applications.
  • Workflow and marketing automation.
  • Document management.
  • Reporting and analytics tools.

7. How do I choose the right CRM solution?

Pick the best CRM software for managing customers and sales by assessing your use cases: Decide who will use it and what problems a CRM will solve. A sales team has different needs than customer support staff.

For instance, sales CRMs generally focus on sales functions like lead management, sales forecasting, and pipeline analytics. Customer service CRMs track all customer interactions and integrate with help desk software and business phone systems. Lastly, marketing CRMs offer marketing automation and document management.

[Read more: 6 Free or Low-Cost CRM Tools for Small Business]

8. Are CRM integrations important?

Software integrations allow your tools to sync data, ensuring your staff has accurate customer information, regardless of the platform. Integrations also reduce app switching, increasing productivity and making your business processes more efficient. In short, native integrations and application programming interface (API) access allows interoperability among services.

Common integrations include the following:

9. What data security measures should I take?

CRM vendors provide data security tools for small business users, like two-factor authentication and user access management. Companies should enable all security features and follow best practices to prevent data breaches. Notably, several large cybersecurity incidents stemmed from the use of third-party software, so it's important to vet your vendors, read through their security details, and ask questions about their data retention and backup policies.

10. How do I compare CRM software vendors?

Create a spreadsheet or chart, and list the important details for each CRM system. Involve your sales teams and any employees who will use the software. Encourage them to add remarks about ease of use or interactions with the vendor. Get started by reviewing our guide on How to Choose the Best CRM Software, where we break down the specifics.

Remember to evaluate CRM companies and features by:

  • Reading professional software reviews.
  • Checking out customer satisfaction ratings.
  • Making a list of questions to ask CRM providers.
  • Using free versions of CRM tools.
  • Requesting a demonstration or free trial before purchasing.

11. What customer data should I track?

The customer information you monitor depends on who is using the software and the purpose. A sales rep relies on details about past buyers and prospects to inform the sales process. Leaders look closely at the value of sales opportunities and customer experience surveys.

At a minimum, your customer data should include contact information, demographics, and preferred communication channels. But you can add custom fields in your CRM to capture details related to your industry. For example, a boutique may track each client's clothing sizes, while a hotel notes if the guest travels for business or leisure.

12. Is it hard to implement CRM systems?

Introducing new technology can be a big challenge in offices using on-premises legacy systems. In this case, a CRM implementation partner can assist. However, deploying a CRM isn't difficult if your team is familiar with cloud-based tools. Most providers offer tutorials and training videos for onboarding your team. Customer support options like live chat also help the process go smoothly.

Keep the lines of communication open between your employees and supervisors. Doing so will alert you to potential problems and improve the overall process. [For more information on software deployment, see our guide to How to Make the Most of Your CRM Software.]

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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