How Does CRM Software Work?

Category: B2B News
How does CRM Software Work?

CRM software makes your sales process more efficient by using tools that revolve around automation, record association and insightful reporting. The software helps you identify key prospects and follow up on high-yielding deals, while freeing up your sales reps from manual, time-consuming administrative tasks so they can sell more.

Customer relationship management (CRM) is a strategy for boosting the value and profitability of a business by promoting customer loyalty and satisfaction. It is built on the premise that there is better business sense in focusing on creating long-term relationships with existing customers rather than on making new ones. The now much-cited Harvard Business Review study findings is generally accepted by marketers: “acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.” This is backed up by other studies, like the one from Bain & Co. that reports increasing customer retention by 5 percent boosts profits by at least 25%.

This article will answer fundamental questions such as, “How does a CRM software work?” and the software’s other important aspects.

How Does CRM Software Work?

CRM plays along the top concern of marketers, as shown in this HubSpot study.

What is CRM software?

CRM software is a powerful, useful tool that allows businesses to manage their interactions with current customers and potential ones. It can be used to improve your business in numerous aspects. Specifically, you have CRM for e-commerce or CRM for retail, but in general, CRM software platforms are for any industry, offering tools for sales tracking function, a marketing automation platform and contact management.

All these business-critical information and processes are integrated by CRM software into a single unified system. The entire transaction history of your customer with your business is efficiently and intelligently monitored and recorded together with those of all your customers and other business deals. Everything—your sales calls, inquiries, appointments, emails, etc.—is readily accessible and managed in one interface.

The best CRM systems can even notify you in real-time whenever your customers visit your company website, check out your product offerings, and click a link in one of your promos. That’s a massive storehouse of valuable customer information in a single system. A recent report says that CRM has enabled organizations worldwide to largely improve their customer relationships, advance collaboration and communication, optimize their business systems and practices, and boost lead conversion rates by as much as 300%. If you are failing or having issues in these aforementioned areas, take them as signs you need to replace your CRM solution

CRM can give you that quick insights on your KPIs, as seen here on a HubSpot CRM dashboard.

How Does CRM Software Work?

1. It makes your sales workflow more efficient

At the core of every CRM software is workflow management. Its functions are divided into two major functionalities, pre-sales and post-sales. All transactions begin with a lead from anyone you can think of as a potential customer. After you place a lead, the CRM software will funnel it through the sales process, while associating the lead with relevant records on calls, reminders, documents and messages.

2. It alerts you of important sales tasks

Whenever something needed must be done, the CRM software reminds you about it, based on your settings. You can also make it perform pre-scheduled activities like sending emails and initiate phone calls. Everything done with the software is recorded, giving you enough time to make better action plans to close any potential sale.

3. It generates opportunities

Once you’ve closed a deal, you can use the CRM further post sales. For example, the software can track issues the customer has logged in an integrated help desk or alert you of his or her question that suggests a need for upsell or cross-sell. In such case, the customer can be funneled back to the lead pipeline for more potential revenues.

4. It integrates with your other important business systems

In its most simple form, a CRM software is a sales pipeline that accepts and organizes customer data and transactions, at times in coordination with other application, such as e-commerce platforms, help desk and marketing automation systems.

5. It helps you gain better sales, marketing and support outcomes

Used the proper way, CRM drives powerful results for any business. It improves marketing, sales and customer service results. particularly, a CRM software helps you build a sales and marketing strategy.

Despite the many benefits and efficiencies of CRM, many organizations still fail to take advantage of it. Here are some case examples to help you appreciate CRM benefits with clarity.

CRM can also drill down to customer data details, seen here from a Freshsales interface.

Examples of CRM Software

1. HubSpot CRM

A leading CRM program, HubSpot CRM is a popular tool from software developer HubSpot. Many attribute this popularity to the fact that the app is available for free.  The system is highly-intuitive and flexible and can be used readily after installation. Such is possible as it does not require users to make changes to their workflows to be able to use it. The solution was built specifically for small and medium-size businesses, most of whom are known to be preparing to migrate to CRM systems. It is an easy-to-use platform that does not entail complicated processes even as it offers all basic functionalities, making it among the top 3 CRM systems around.

Other HubSpot CRM features include the ability keep every customer detail organized and let users to create both company and contact profiles. Transactions are assigned and tracked by the the solution, even as it provides users with absolute control over agent performance. Team members monitor all activities using a single platform. Notable integrations include Salesforce, Zapier, Microsoft Dynamics and Shopify, among many others.

The vendor offers a comprehensive free trial to get you up to speed with the features. You can sign up for the HubSpot CRM free trial here.

HubSpot CRM

This award is given to the best product in our CRM Software category. It highlights its superior quality and underlines the fact that it's a leader on the market.

HubSpot CRM won our Best CRM Software Award for 2018

Our score
User satisfaction

2. Freshsales

Freshsales is a product of popular app vendor Freshdesk. This tool is built to provide the needs of today’s sales teams, helping them track contacts while being able to resolve customer concerns and queries. The developer’s own need to efficiently manage its sales processes, along with the goal to enable users to perform tasks with but a singular solution, paved the way for Freshsales’ development. Among key Freshsales details is that it is basically a contact management solution that lets users manage leads by the thousands with an easy-to-use interface.

The system likewise acts as a dynamic analytic contributor, capable of providing sales tips and insights on how to use the same as leverage. The product does not come with complicated procedures, making setup a breeze. It has many popular integrations, making it easy for most systems to work with the software. Other notable features like email tracking, event, tracking, direct calls, reporting, sales management, analytics and lead management are also present.

The vendor has an appealing free trial where you can tinker with the features at no cost. You can sign up for the Freshsales free trial here.

3. Salesforce CRM

Another highly-respected name in the category, Salesforce CRM is a powerful tool originally developed as part of the vendor’s sales and marketing systems. The solution makes it possible for users to track all client information and interactions from a singular location, which allows them to follow additional leads. The system has all the needed apps to follow leads until they are ready to be converted.

Although there are a bunch of Salesforce CRM pros and cons, when you use the product, chances are your sales team will get that much-needed productivity boost, regardless if they are in the office, out in the field or in cyberspace. Salesforce CRM comes with apps that support both iOS and Android devices, making it capable of catering to the mobile workforce. Real time information and custom reporting can be accomplished by the system, along with a Feed First functionality that allows users to view key information. If you want to add more apps to the platform, you may do so via the AppExchange Apps. Popular integrations include those of, TeamSupport, Zuora, FinancialForce ERP, Zendesk and Ambassador.

If you want to investigate the features closely you can easily do so when you sign up for a Salesforce CRM free trial here.

4. Pipedrive

A robust CRM solution that aids businesses in organizing leads, Pipedrive provides organizations clear visibility into their sales so that they could focus on top priorities. This user-friendly system can be used immediately upon setup completion. Setting it up is also easy, all that is required is to register an account and off you go.

However, perhaps the best among Pipedrive benefits is its ability to manage sales pipelines and help sales teams negotiate deals while maintaining relationships with leads. The software is highly-customizable, even allowing users to promote their brands. If users choose to, the entire modules can be turned on and off without impacting service quality. The solution can cater to more users as it is mobile-optimized. It has robust integrations with third-party apps that include Google Calendar, Google Apps and Google Contacts, to name a few.

You can check the solution closely when you sign up for a Pipedrive free trial here.

5. Zoho CRM

Zoho CRM is a web-based tool that is designed to help businesses achieve growth by attracting, satisfying and retaining clients. The solution can manage sales pipelines and purchase control, aside from handing contacts and leads. As for Zoho CRM details, the software is an easy-to-use interface comes with the solution, from which all tools can be easily accessed. It has a customizable dashboard, which can be tweaked to be business-specific.

The software is designed to cater to businesses of any size and type, helping them engage clients, track sales and automate business activities. It can also be accessed from any device as it is mobile-optimized. For those who want to give the app more functionalities, they can go for its integrations with apps such as Microsoft Outlook, MailChimp, Quickbooks, ConstantConnect, CloudWork, Google Apps, OneSaas and major Zoho productivity tools.

You can easily sign up for a ZohO CRM free trial here and get to know the features firsthand at no cost and without commitment.

6. MyCRMDashboard Mortgage CRM

Mainly designed for those in the residential mortgage industry, MyCRMDashboard Mortgage CRM delivers a plethora of tools that simplify lead generation and client engagement. Lead generation is automatically handled by the platform so users can focus on attracting, nurturing, and retaining their prospects and customers.

Aside from properly documenting each client engagement and interactions, MyCRMDashboard Mortage CRM prevents any opportunity from falling through the cracks through sending of follow-ups and automated marketing campaigns. Simply put, MyCRMDashboard Mortage CRM benefits mortgage companies and loan officers with streamlined customer relations while enhancing their cross-sell efforts, repeat businesses, referrals, and client retention.

Where Can You Use CRM?

1. For more efficient sales management

CRM platforms lets you automate your sales workflow to fast track deals and promote consistency in your sales process. One common CRM-automation process is systematic lead nurturing, which is a powerful strategy for making the most of your long-term leads. Likewise, sales managers can utilize a CRM system to establish sales targets and monitor their achievement. You can also use CRM to envision progress for your sales force to keep them encouraged in meeting sales targets.

CRM also makes team performance analysis easier and more realistic to conduct. Done either for the entire sales force or per sales agent, you can use CRM to undertake periodic performance reviews based on actual sales achievements and make workable adjustments.

In this regard, sales managers can use CRM data to identify the poor and good performers, determine particular sales performance issues and their causes, and pinpoint strong and weak strategies within the sales process.

CRM can also be used to reinforce sales performance. For instance, the platform can be employed to identify which behaviors of your sales agents are efficient after assessing the practices and specific selling strategies of your company’s top performers. These vital information can then be shared as in-CRM guide for your poor-performing sales staff.

On a more sophisticated level, CRM has special algorithm features that can be used in recommending upselling and cross-selling opportunities to sales team members as derived from the past successful deals and customer buying behaviors and history.

2. For efficient marketing strategy

Having ready access to CRM data makes your pre- and post-sales processes more insightful, personalized, efficient and transparent. You can gauge clearly customer preferences, consumer trends, and customer engagement levels aggregated by your campaigns, websites, social media channels and support channels, all of which offer insights to crafting a better marketing strategy. Customer data assessment also allows for more effective market segmentation, while CRM market analysis affords marketers a better understanding of their efforts in terms of pipeline activity and revenues generated.

CRM is also a powerful tool in making the most of your online presence. It can identify potential customers and generate leads. It helps capture accurate information on all deals and communications as well as in the timely sharing of all records with marketing team members. It is also a surefire way to improve marketing and lead quality.

Insights like new deals and lost deals and their amount can guide your next marketing campaign. This Pipedrive dashboard aggregates the figures in one clean interface.

3. For more profitability

Analysis of CRM data allows you to identify your high-profile clients, thus letting you focus on higher-yielding leads. Observing how they respond to your marketing and sales programs and their purchasing behavior will help you respond more efficiently to any negative signals, thus allows you to improve retention of such important clients.

Top executives can employ CRM data to make revenue projections and profit management. A good practice here is to divide wide-ranging targets for revenue increase and cost reduction into smaller units and use the CRM platform to monitor them and generate data for analysis. For instance, cash inflow can be improved by framing goals for upselling and cross-selling.

For non-managerial positions, CRM can be used to drive poor performing sales staff by providing them more leads to convert into actual sales. Likewise, a CRM’s automated nurturing notification can be utilized to optimize the work hours of sales agents, enabling them to process more leads for every sales period, and in turn improve HR expense ROI.

The CRM system can also be used to visualize the sales pipeline as this allows you to determine the precise phase where a potential customer is in his/her process to become an actual customer. Sales visualization also tells you regarding the extent your business (through your service and product offerings) is interacting with the potential customer. CRM also facilitates the preparation and timely communication of follow-up activities, thereby you don’t overlook any important portion of your sales operations.

A basic purpose for CRM is to help you get organized in your business processes. This is done by enabling smoother handling of your customers and by automating the typically tiresome sales activities. By doing so, CRM helps in improving the profitability of your business.

4. To better monitor competition

CRM allows you to closely monitor your competitors and learn why your customers decide to stay with you. To protect your market share, you must monitor and assess the market and determine which areas you must improve upon to improve your competitive edge. An efficient way to do so is by building your firm’s customer profile database. A CRM helps you gather important customer data and then integrate it with the marketing automation feature to generate insightful reports on why your clients favor you more than your competitors.

Losing customers is common in any sales process, and CRM also helps in minimizing or preventing customers from leaving you. CRM systems enable you to monitor reasons for lost customers and generate relevant reports. With this vital information, you can make a sound assessment of every lost deal and frame reasons and patterns of customer behavior for choosing your competitors’ offerings.


CRM software is all about engaging in more worthwhile connections with customers and any business seeking to win big against its competition should embrace this robust strategic approach. It is very important to understand first how a CRM software works and the specific way it must be applied to your business. CRM is a business strategy that builds upon technology as a tool, not vice-versa.

You’re ready to explore the different CRM options out there. Go check some of the best CRM solutions to get started on your search for such a tool.

By Jenny Chang

Senior writer at FinancesOnline who writes about a wide range of SaaS and B2B products, including trends and issues on e-commerce, accounting and customer service software. She’s also covered a wide range of topics in business, science, and technology for websites in the U.S., Australia and Singapore, keeping tabs on edge tech like 3D printed health monitoring tattoos and SpaceX’s exploration plans.

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