Customer relationship management (CRM) solutions help sales teams manage leads, log communications, and build campaigns. In recent years, they’ve also embraced marketing and customer care teams. While such systems were once used exclusively by enterprises with thousands of dollars to spend on software products, the proliferation of affordable software-as-a-service (SaaS) systems has opened up the CRM world to small and midsize businesses. Low-cost CRMs lack some of the features more expensive solutions offer, but they are typically easy to implement and manage.
What is CRM Software?
CRM software is a type of software that companies can use to manage their sales and marketing communications with current and potential customers. Common CRM features include lead management, customer data management, sales forecasting, social media monitoring, workflow automation, reporting and third-party integrations. The software is often customizable so businesses can modify it to meet their specific management needs.
Small businesses have many CRM pricing options. There are free and inexpensive CRMs, which are best for small teams and microbusinesses. These platforms come with plug-in upgrades if extra functionality is needed. There are also heavy-duty CRM platforms that cost more and have a much greater number of features (both native and plug-in). These CRMs offer better flexibility and scalability.
When deciding on how much you’re going to spend on CRM software, try to strike the right balance between understanding your current business needs, anticipating future needs, and what your business can afford.
Most cloud-based services offer the option of monthly or annual billing, with the possibility of up to a 20 percent discount for paying for the year upfront. On-premises CRMs, where the system is hosted on your computer network, often charge a flat one-time per-user fee.
Complicating matters further are add-on products and services, storage upgrades, mandatory training and implementation fees, and automatic upgrades. One CRM software’s per-user price might be cheaper but when you plug in the add-ons you need to achieve the functionality you want, it may end up costing you more.
Satisfy yourself that you fully understand the pricing structure of any CRM product before you decide on one platform. Make sure you specifically ask about automatic upgrades, storage limits and user limits when inquiring.
Here’s our mini guide to give you a sense of the general price range of CRM software.
- Inexpensive cloud CRM systems often have a free version for up to 10 or so team members. Usually, entry-level paid subscriptions begin at around $15 per user per month.
- Midrange cloud CRM subscriptions tend to run from $20 to $40 per user per month. These systems generally meet most small business users’ needs. If ultralight solutions aren’t working for you, investigate this level.
- Enterprise-level cloud CRM products are available for about $50 to $150 per user per month. These systems often offer higher levels of customization, more features and personalized customer support or training services.
- High-end cloud CRM subscriptions can cost upward of $250 per user per month, but most SMBs will not need the wide range of features they offer.
- Client-hosted CRM software can cost well over $900 per user per month. On-premises systems offer more control but also require a significant upfront investment, as well as technical knowledge and skill to maintain.
Consider how many of your team members need access to the CRM. The fewer users you need to onboard, the less expensive and easier to implement the CRM will be.
CRMs run the gamut, with lightweight services intended for quick and easy customer relationships and lead management as well as powerhouse systems that offer integrated e-commerce solutions and advanced analytics.
While many small business owners worry that they’ll sign up for a product that won’t offer enough functionality later, these concerns are often overblown. Higher tiers of service and add-on features are nearly always available.
Also, while more CRM features and functionality may seem inherently better, too many options within a system can be overwhelming. An excess of features often extends the implementation process and makes the system more complicated and expensive.
If you already know what you’re looking for but want to narrow down your options, ask yourself and your team these questions:
- Should we have workflows with built-in multilevel approvals?
- Will we need to email clients directly from the CRM?
- What sales tools do we need?
- Do we want software we can use immediately after setup, or do we want to do lots of customization ourselves? If we do want to customize the system, how much API access do we want?
- Who will be the primary software admins and what is their comfort level in that role?
- How much are we willing to spend, either per user or on an annual basis?
In addition to your answers to those questions, list the integrations you need (including proprietary legacy software, if applicable) and ask the CRM company how you’d achieve such integrations with its software before you choose a product.
For example, in some CRM systems, integration with an outside solution is as simple as clicking a few boxes; in others, you must use a third-party tool (like Zapier) to click your way through the integration. Some even require hands-on coding to make integrations happen.
It’s important to understand which key functions a CRM should offer so you get the most out of the program. Here are some of the most important features.
Automation
You want to use a program that automatically executes actions based on data in the program. For example, when a customer fills out a form, your CRM should automatically send the message to the appropriate sales representative. After the message is received, the CRM should send a notification that the message was received or opened.
Workflow automation minimizes or eliminates much of the time-consuming, nonproductive work involved in data entry and sharing. It gives your staff more time to make sales and reduces the chance that a lead may be overlooked or lost in the system.
Reporting Tools
Reports help you understand how well your sales and marketing campaigns perform. Knowing how many leads or sales you get within a certain time frame and the point at which leads drop off can help with sales funnels. Knowing how many outbound calls each team member has made enables greater visibility on KPIs. You can spot training opportunities for reps whose conversion rates are lower.
An effective CRM system helps you to make more informed decisions about your marketing and your wider company in general.
Customer Data Management
Understanding your customers is a big part of your business’s success and customer data management features with CRM systems help you collate and interpret that information.
Well-organized, easily accessible data on current and potential customers can help you build better relationships, which will help you sell more and increase the lifetime value of a client.
Customization
Customizable CRMs allow you to pick the features you need to help your business run better. You can create workflows and automations specific to your business that help it run more efficiently.
They also allow you to arrange your dashboards and reports in a way that makes more sense to you. You can get your CRM to do more by adding on extensions and plugins that you can often find in your provider’s marketplace.
Integrations
Third-party app integrations connect your CRM software directly to the other programs you use in your business.
This is also a great timesaver because it eliminates the need to switch between apps and manually input data you have on other apps.
To determine the features you need in a CRM, list what you want to do with it. Make sure you know exactly how you would use each feature and determine its potential value to you before investing in it. If you can’t see a clear use case for a feature, don’t purchase it.
1. Set Your Budget.
CRM software costs range from free to hundreds of dollars per month for enterprise-level solutions. Know how much you’re prepared to spend before you begin researching your options. This saves time by eliminating CRMs that are too expensive, and also makes impulse purchases less likely.
2. Write a Feature List.
Review the basic CRM feature list above and determine which of them will support your sales and marketing campaigns and processes. Decide which tools are essential and which would be nice to have but are not mission critical.
3. Ask Around.
Prior to working for you, your colleagues may have had both good and bad experiences with certain CRMs. The same is true for your supplier and your customers if you sell business to business.
Canvass as many opinions as you can to determine which ones should make your shortlist.
4. Research the Market.
Visit business advice websites for an overview of popular CRMs, pricing and features.
Trade associations and membership organizations related to your industry are also great places to learn about solutions designed specifically for your type of business.
5. Check Out Reviews.
Read a variety of user reviews about each CRM you’re considering. Look for patterns in the comments to learn common pain points and standout features from people who use them every day.
6. Try Out Your Favorites.
Most popular CRM vendors offer free trials as a hands-on way to get to know their products. Try as many as you can to develop a good understanding of their capabilities and how they compare to one another. Make sure you ask the rep consulting with you at each provider the questions you need answers to.
Free trials may highlight a CRM’s best features only. Try all of the tools you may need, not just the most prominent ones.
7. Make Your Selection.
Now you’ve done your due diligence, it’s time to make a final decision.
Before you commit, negotiate the price. Most CRM software for small businesses has set pricing based on features and the number of users, but it never hurts to ask.
You may wish to play suppliers off against each other on price and functionality to secure the best deal. If you’re thinking about switching to a new CRM platform, you could use these quotes to try to extract further discounts or additional functionality from your current provider.
There are many benefits to using CRM software in your business but, perhaps, four stand out over all others.
First, the sales funnel data generated by CRM software helps you gain a better understanding of what your customers want. Over time, you get to know what keeps prospective new clients on the funnel long enough to make an inquiry or purchase.
Second, you get to see which team members are performing better than others. Without centralized information on prospecting and conversion rates, it’s difficult to see who’s not getting in touch with enough new people and who’s not closing enough of their prospects. CRM systems allow you to identify training opportunities in coworkers struggling and make sure the top sellers get the best leads.
Third, you get to see your customers over the life cycle of their time with you. You identify more clearly who your top customers are and can nudge them when you need to get revenues up. You can also track interactions with your company to identify churn patterns (i.e., when a customer stops purchasing from you).
Fourth, CRMs save time. They automate the repetitive, dull, unproductive-but-necessary tasks and improve communication between sales, marketing, customer service and all other teams.
Perhaps the biggest breakthrough in computing since the dawn of the internet has been the emergence of AI. It’s been slowly developing for some years but it burst into the national consciousness with the launch of ChatGPT. Since then, a more advanced model has been released and OpenAI is actively working with developers to integrate the technology into their apps.
We’ve seen this reflected in CRMs. As you can read in our reviews of Salesforce, Freshsales, Zoho, Zendesk and Pipedrive CRM platforms (linked above), they have already deployed AI in their platforms to take care of tasks like forecasting sales and workflow automation. Closely allied to that is the rise of the no-code and low-code movements. The Zapier plug-in to GPT4 already makes it easy to connect apps that have no native integrations to each other without the need to code. Given the rate of development, we would not be surprised to see drag-and-drop interfaces on all CRMs and third-party apps that allow integration without the need for a developer.
Integrating AI into business operations has transformed how companies interact with their customers, enabling them to deliver tailor-made experiences effortlessly. By leveraging AI to analyze user behaviors, preferences and search histories within CRM systems, businesses gain valuable data-driven insights that are instrumental in crafting more tailored content strategies specifically designed for their target audience, significantly improving customer engagement. We expect the use of AI in CRM systems to increase in 2024.
In addition to AI, omnichannel communication is big too. You can see just how pervasive it’s becoming by reading some of the reviews of the best call center platforms — we’re starting to see the ability to converse with customers by phone, email, social media direct messages, WhatsApp and more built directly into CRMs. This is a sensible trend because customers now expect to be able to communicate with the brands they shop with on whatever channel they want.
In 2024, the focus will be on self-service CRMs to improve the customer experience. A Salesforce report found that 65 percent of customers prefer self-service to resolve simple matters. You can see how Zoho and Zendesk are doing this in our reviews of them (linked above).
According to Technavio, the CRM market was valued at $57.83 billion in 2021 and has a projected growth of $59,426.56 million from 2022 to 2027. Experts believe the growth momentum will progress, and North America will account for 52 percent of the market’s growth from 2022 to 2027.