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What is a CRM system and how to choose it correctly

CRM systems *
Original author: Kinzyabulatov Ramil

In modern business the need of automation in various processes have already become commonplace. It is already becoming difficult to imagine a warehouse or accounting without the use of specialized software. The representatives engaged in trade use a special application for registration and sending the order to office directly from pads or mobile phones. Mostly the orders that are ordered from the website are delivered in the form ready for processing. But at the same time customer relationships, at least in the medium and small business for some reason, very often maintain without the integration of automation and sufficient attention to the account.

All this I observe often enough, as a business consultant in constant contact with small and medium-sized businesses. And every time I have to tell my customers how to automate relationships with customers, how to operate a CRM system, what they are, and why in a specific case it is necessary to choose a particular system.

What happens if the sales Department are carrying out without the accounting system? Every sales Manager works as it is convenient, maintain the fixation of calls and other interactions with customers in its sole discretion: some works on paper, some in Excel spreadsheets, and someone in General does not consider it necessary to record the process of their work.

Incoming calls or requests of the new customers from the website are also not fixed, sometimes even hard to understand who of the managers engaged in incoming request. In result the real records are maintained only at the level of paid orders and shipment of goods. How efficiently the sales department works, whether entering LEADs are being processed, whether any work on already existing contacts is carrying out, to define it appears to be impossible.

In addition, in the case of dismissal or illness of the employee, all of his unfinished negotiations, and a raw contacts, the company could lose, which is also highly undesirable for effective operation of the sales Department.

The way out of this situation is: automation and standardization of management of relations with clients, i.e. the implementation of a CRM system.

This solution will help:

  1. To obtain a general standardized database of contacts (clients, contractors) for the company.
  2. Effectively implement the quality control of work in sales Department at any time.
  3. Get statistics and analytics of the effectiveness of lead (incoming calls, queries).
  4. Plan to improve the quality of work and develop business strategy.

In General, the process of choosing and implementing a CRM system is no different from similar work on choosing any other software. How I spend working on the selection and implementation of the software, I have already told in detail in past articles, for example, choosing a software product for a client. Requirements collection. Now I want to talk about the specifics of the choice of CRM systems.

In this article I will try to avoid advertising one or other CRM systems. I always ready to answer your questions individually if someone is interested which one i use at work personally, and what Im ready to recommend in a particular case. Here I want to talk about CRM systems in general, including what they are, for whom and for what they are for, how to choose a CRM system for the needs of a particular business.

What is CRM system?

If you search in Wikipedia, you can get the following definition:

CRM system (Customer Relationship Management or Managing customer relations) — this is a software application for organizations, meant to automate interaction strategies with customers (clients), in particular, to increase sales, optimize marketing and improve customer service by storing information about clients and history of relations with them, establishment and improvement of business processes and subsequent analysis of results.

Actually, the CRM system can be considered to be any variant of control and accounting that will help improve interaction with customers. Even if you maintain call history and contacts on paper or in Excel — this can be considered a CRM system in the case if the scheme of accounting and control works and allows controlling all options of interaction with customers. Of course, such methods of accounting are left in past indeed in present world without effective automation difficult to imagine the work of any business. Therefore, when talking about the CRM system, usually mean special software.

In some cases, the developers introduce additional confusion in terminology, by promoting the term CRM. This combination of characters doesnt decode, as it is simple writing in Russian letters, the English abbreviation. I believe that even for promotion in search systems, this term is not worth to be used.

Software developers often try to impose their vision of what can be called a CRM system. Usually the list of necessary qualities of a true CRM coincides with the option that they implemented in their software product. In some cases, such marketing is working quite clearly and Intrusive, according to the principle: CRM should this way and only (and here it is our product!). Other developers (mainly foreign companies) do this less obviously, just showing their product and say: “this is the CRM system”.

You need to understand that there are common standards and a clear understanding of what is meant by the term CRM system. It can be any convenient business management system of clients relationship.

For example, for one of my clients CRM is, above all, records of contacts and cooperation with them, he believes that other opportunities is unnecessary because he doesnt use them. And many developers of powerful CRM platforms will consider that the concept of CRM is much broader, from their point of view, even CRM system of many banks will be functional enough to be called a real CRM. Actually, it all depends on the goal and scope.

So, in a small trading company CRM system may include just phones, email and customer addresses. A beauty salon, for example, will need to add to this list the frequency of visits of each customer and the average check. These data are important for successful interaction.

My personal definition is:

The CRM software is any software that helps you to successfully control the work with clients, organize and plan.

In the medium and small business, the most important requirement is not to lose a client. I realized this in practice. It is not so important whether to send the Happy Birthday or happy New Year congratulations to the contact person. The main thing is not to lose a client, dont lose the interaction that all the effort that was spent on his involvement, was not in vain. Therefore very important to control the flow of incoming calls and requests from the website, email etc.

Who needs a CRM system?

Before choosing a CRM system, you need to understand whether it is necessary to your business. It often happens that someone told the business owner about the existence of such systems or software and vendors trying to impose their product. And really — do you need this system indeed?

CRM-system is necessary for every business that works directly with clients and seeks to expand the number of buyers.

So, if incoming calls or requests (leads) from new customers in your work are important, if the business is making some effort to obtain and retain new customers, then a CRM system is required.

For example, an online store, wholesale company or beauty salon will not be able to work effectively without careful attention to the lids (incoming requests and calls). After all, in each of these types of businesses it is very important that all the orders were completed, buyers of goods and services were satisfied, and customer loyalty increased.

On the other hand, if your business is not interested in increasing the number of clients at this stage of development, if the loyalty of regular customers based on long-term contracts, and all contracts with new customers based on personal meetings, even the best CRM system will not give anything.

For example, a retail store will not use the CRM system in their work as contacts of buyers is impossible to fix. Here is customer loyalty based on quality of products service, personal contact with the seller. Also, a CRM system will not help in cases when the company signed long-term contracts for the supply of goods in chain stores, power of the supplier will be barely enough to fulfill the orders of the trading network, and everyone is satisfied with the condition.

But if you develop your business, if you invest in advertising, making other efforts to attract and keep customers, then a CRM system will become a great helper in your work.

What the CRM system need for?

Explaining complex and new things is an integral part of my profession. And often have to explain why the client needs a CRM system. What is this, a businessman can know himself. But very often representatives of small and medium businesses do not understand why they need it. Because the number of customers is relatively small, the sales Department in the companies of this level consist of only a few people. And, it seems that even without a CRM system to control the work with buyers is easy. In fact, it is not. Very quickly after the introduction of the automated system revealed a large number of defects and the quality of work of the sales Department grows significantly.

CRM needed for:

  1. Not to lose a potential customer, not to miss any incoming call and query. In the small and medium business in our country, the competition is very high. Companies have made significant efforts in order to attract customers. Compared to other costs for customer attraction from this you can allocate a significant budget. It is very important that all these tools and efforts were not in vain. Automated systems allow obtaining assurance that it will work in the sales Department right that way. You will receive the latching of each incoming call, each request, each LID.
  2. Staff control and standardization of work with clients. Without a common standardized CRM system, everyone works as he used to. Someone keeps the records in spreadsheets, some in a notebook or diary someone does not keep at all, focused exclusively on the reports from 1C or on its own memory. Contacts also happen quite randomly. Customers letters can be sent with both corporate and personal mailbox, calls can be made from any phone, control the quality of work impossible. The system CRM is almost completely solves this problem. Information about all incoming and outgoing contacts will be in a single repository, from where it can be removed at any time.
  3. Statistic is being accumulated which is also very important for the success of any business. Through the use of a CRM system working all the information is collected in a common database in a standardized form. As a result, the Manager can analyze statistics, prepare various reports (many of which are already in finished form present in CRM-systems), i.e. to analyze the work and plan future work more consciously.
  4. Prepared solutions from which you can start to build your own system. Every CRM system is the realization of a vision for developers of how to work with the client. It contains many ready-made tools which allow transferring the work to a new level. For example, the integration of CRM with telephony allows you to record all calls to memorize all the new contacts and to analyze the quality of the sales lead. In the small and medium business customer directs most often the head (owner) of the business. He has no experts and often no experience for working with clients. The Manager does not have anything to rely on that and in this issue, therefore, the sales Department often works far better. Implementation of CRM-systems allows obtaining not only a tool but support, the opinion of the developers on how to work the sales Department. In its turn the development of a CRM system is usually based on best practices, experts and in work with clients. So if you actively use CRM system tools, then the work of your sales team will also be optimized. Various system tools themselves suggest what steps worth to make for the process of optimization of work with clients.

In addition, the user of the CRM system will receive many other useful things, most of which depend on the selected system. But these four are the basic things I clarify always, because they are very important for small and medium business, and because they are provided from any of the existing CRM systems.

How to choose a CRM system?

When selecting a CRM system the most important thing is to make sure you have all the features that you would like to see in the process. So, if the incoming calls are very important for you, then you need to ensure that the selected CRM system supports integration with telephony. But if you get most of the leads through the website, one of the main standards will be the ability to integrate the CRM system with your CMS.

The rest depends on your tastes, and the recommendations that your specialist give to you. Actually, if the specialist who will be implementing the CRM system offers you a certain software products, in condition that in provided system are all the features you need, and you are satisfied with the cost of the product, it makes sense to agree with his opinion. Experts usually suggest a product that they know very well, that would certainly be an advantage at the implementation stage.

To study the CRM-system via videos and test access is quite difficult, in every system there are many nuances that you will learn in the process of working with the system. But there are some fundamental points that will help to make the right choice.

So, the main thing — is to implement a CRM system. Further, if you have any preferences, you saw a system that for some reason you like then implement it. In all other cases, the best way is to rely on expert opinion.

Saas, or a Stand-are they clouds or private server?

There are two types of CRM systems, created on the basis of different technologies:

  1. Saas or system as service. By this option, all software and data are on the server of the service provider. You will get online access to the system via browser, client software or mobile app. All processes occur on the service provider side.
  2. The Standalone is a license for installation and use of the software. You get a solution that you install on your own server, if you wish, modify to suit your needs, depending on the opportunities offered by the supplier for the CRM system.

While selecting Saas-solutions, you will have some limitations. You will not be able to change anything in the code of the product, as software solutions are on the side of the supplier of CRM system. Usually, CRM systems allow you to configure access rights of employees, to integrate any external system to get data from website, record incoming calls, etc.), to change the registrations using the constructer to customize reports, etc. But it will all be stored on the servers of the CRM system supplier.

It is also important to understand that when you use Saas solutions, you should always have access to the Internet. Of course, in our time, reliable Internet is very important part of any business, in the absence of access to the network many business processes can be paused. That is because the optimal solution is to have a reliable basic and in addition also backup access to the Internet.

There is another important thing that you need to understand when choosing Saas solutions: most likely, for every creation of database backups and other similar operations, you will need to pay separately. For example, in the system, which actively I use, backup costs $ 10 for 1 backup.

Features of Saas solutions:

  1. You dont need your own server to host the software;
  2. You will not need to deal with updates yourself, it all lies on the service provider, and you just use the decision.
  3. About the CRM system as about Saas solution, you can say a lot. Maybe I will write separate article about it. To select the type solution the described above features are enough.

Stand-Alone solution, as I said above, is to buy a “boxed” solution that you install on your own server and will be able to change the code (in the limits of access that was provided by the developer). In some cases, for example when there is a need to implement unusual solutions, this level of access is very important.

But most of all, for small and medium businesses Stand-Alone solutions are not required. The need for profound change occurs very rarely, so I usually recommend Saas.

Integration with telephony

I think that any CRM system must be integrated with the telephony. If you are not able to record incoming calls and initiate outgoing connections, this is a big minus. So when choosing software for my clients I always pay much attention to this possibility and how it is implemented. It seemed that data about calls can be entered by hand. People begin to resist, they are annoyed to do extra work. Besides, any person may simply forget to enter one or another important call into data.

So, to record calls in the system is necessary. There are 2 options of implementation:

  1. Call is done from the browser itself, it passes completely through the system; all interactions are being done through the browser. It is important to understand that through the system passes the whole call, and because of the browser and code CRM depend the quality of the sound, the speed signal processing, etc.
  2. Telephony integrates with third-party services — asterisk Avaya etc. In this case, you set the virtual telephony on the basis of these services and connect your numbers to this phone. While this all outgoing calls and receive incoming calls, you can do through a SIP tube, not through the browser. How does it happen? Your SIP service provider receive a call from a client, forwards it to your system by virtual ATC, and it already sends information about the call in the CRM program. Thus in the CRM data telephone number, time, call duration, etc. are being fixed. The user just will need to add his notes regarding the call (subject in a short way, result, comments).

Of course, there is the option of recording information about the calls manually but I have already described above why this wont work in practice.

API integration: the availability of ready-made solutions

Every business uses different services to receive requests, keep record, paperwork, etc. When choosing a CRM system it is worth to pay attention whether there are API solution to integrate with your site, for data exchange with 1C, IT-telephony, other necessary programs and services. The availability of a ready API integration is a big plus.

Cooperation with a contact (customer) usually consists of several things:

  1. Phone calls;
  2. Email correspondence;
  3. Messaging (SMS or email);
  4. Meetings.

The first 3 things should be automated.

They give an idea about the history of the relationship with the customer; help understand what is happening to him at the moment of work, what were his last actions.

Planning and working with tasks

When choosing a CRM system it is worth to pay attention whether there is a possibility in the system that allows planning, formulating and working with problems. Employees must have the ability to create tasks for colleagues and themselves, set reminders, etc.

Besides working with clients CRM-the system must have the necessary tools for cooperation between employees. The communication in the office or via phone between the employees discussing projects and solve any problem is not enough. It is also necessary to have the ability to control workflow and communication.

Users should be able to put tasks for themselves and others related to customer support so with reporting other necessary actions. Also a very convenient feature is the ability to customize the service automatic tasking of, for example, once a quarter will be created with the task of processing the quarterly reports, etc. Or when receiving contact information of a potential customer (the new lead) via system, it will automatically create a task for the defined employee, for example, to recall to the specified phone number.

Integration with SMS service

As such integration with an SMS service, I have not seen, for example, ready solution for integration with certain services, SMS. This is done through business processes or through the API. Accordingly, the system must have the ability for mass SMS sending for all clients, a specific group of contacts or a specific contact personally (e.g. notification of certain actions).

Data Import

Carefully review the opportunities of CRM system to import the data. In what format download of information is possible? Is there a ready module for migration from other systems, if yes then from which systems?

You should understand how the primary fulfillment of data will implement during the system startup. It is very important to realize the import of data fast, simple and transparent. Without the convenient automatic transfer of all contacts and other important information, system startup most likely will fail. Of course, you can enter all the data manually, but this will take a very long time and its uncomfortable. But if you enter these data part by part then the risk of duplication of customer cards increases, in the result, you can expect confusion and lining.

I personally really like the option of moving data from an Excel spreadsheet, this option is universal visual enough and convenient. In Excel is possible to upload from any system, including 1C. And download data in this format is also quite fast and convenient.

The availability of localization

This setting today is not the most relevant, as the most powerful widely-known CRM systems have Russian localization from long ago. But, nevertheless, when you choose software for this option, you should pay special attention always, because without Russian localization, it will be difficult for you and your employees to work. Beside it I think there is no sense to deprive yourself of comfort, if you can avoid it.

Licensing: Is it an Open Source or proprietary architecture?

The difference between Open Source and proprietary architecture is that in the first case, you get a system with open code and the second with closed. It is clear that here we are talking about the licensing options for Stand-Alone software products as any Saas system by defaults has closed code. Proprietary (closed) architecture sell mostly large developers. In this case, you get a powerful system that you will be able to amend in the limits specified by the developer. I personally do not see anything wrong here, as I wrote above, for small and medium businesses we rarely need any non-standard solutions.

An Open-Source license (open code) differs of its formulation, created mainly on the basis of any CMS. In this case, you get extremely wide possibilities to integrate and operate the website or other system. On the other hand, such CRM modules largely lose large CRM systems, specifically designed to account relationships with customers.

Contacts and counterparties

When choosing a CRM system pay special attention to how directories are implemented, what their structure are. So, if you work only with individuals, then you will only need one level of this contact (the client). In this case you can actually use any version of the structure of the contact directory.

Another thing, if you work with legal entities. In this case, your contact is an organization. But on behalf of this contact can call different people, for example, accountant, supplier, storekeeper, supervisor, etc. It is very important that the CRM system provides the opportunity to make a card for each contact person (contractor) separately and combine them in a single contact, organization. This is very important, because otherwise to arrange a sufficient level of control automation of work with clients will not work.

The cost of the system

Any businessman before implementing one or another software solution, asks a question, how much it will cost? In determining the price of CRM you need to understand that the numbers you see on the website under “cost of product” or “ cost of license” is only part of the total cost. Therefore it is worth to figure out what is the full cost of implementing a CRM system.

The total cost of the product consists of several parts:

  1. The cost of the license (purchase). This can be a payment for access to “cloud solutions” or the cost of 1 copy. Transformation of the data into system. You will definitely need some way to transfer contacts and other data. Thats why the presence or absence of a ready module, as well as the complexity of the preparatory training of data importation will also affect the final cost.
  2. The cost of improvements.
  3. Even if you bought a “boxed solution” or access to the saas version, anyway some refinement will still be required. It will be necessary to adjust access to the rights, reports, problems and so forth.
  4. The cost of maintenance.

Besides, many people are missing another important but less obvious point. It is a financial loss during the transition period. You need to understand in advance that during the transition to a CRM system may arise some problems due to which you may lose some leads, etc.

While implementing any software there are some difficulties may appear. Even if the seller of the software product tells you that right after making payment you can immediately start work, still in practice problems arise, problems that lining of the human factor (employees still do not know how to use the new system or know it but not well enough, etc.). There are also indirect costs during implementation. So, your staff instead of performing duties will devote the part of their time to the training and testing of the system. The leader also will have to devote part of his time to solve the issues associated with the implementation of CRM and the control of work for solving this task.

If you are going to understand in advance that expenses in the stage of implementation will be for sure, if youre ready to devote time and effort to the implementation of a CRM system, if you will get prepared for the possible overlap, then these costs can be minimized, and to make the process very easy and painless.

The cost of the license

Depending on the chosen type of CRM system, there are various options for purchasing a license. You can:

  1. Buy a license without expiry.
  2. Purchase license (subscription) for a certain period (month, year, etc.)
  3. Purchase a copy of the software for installation on your own server.
  4. Unlimited license is purchased once and is valid on a permanent basis. It is convenient, but the amount that must be paid immediately, usually quite significant.

The subscription involves the purchase system access for a specified period. The subscription price is usually not much, but you will have to make regular payments to extend access to the CRM system.

When comparing the cost of licenses, you need to also take into account marketing moves, which are often used by sellers. So, very often the sellers of CRM systems advertise on the website the minimum price of a package of services, which will operate only under certain conditions. But in reality you will need to pay more for this system.

For example: on the page describing the package of provided services price is 40 USD per 1 user per month. But if you read the entire text, including the text and notes, it turns out that this price is only valid if you purchase at least 10 licenses at once for a period of 1 year. And if you need totally 9 licenses, price already will be quite different.

Such marketing tricks are very specific to IT market. But the details of the tricks of the licensing, I plan to talk about in a separate article. But now it is enough just to remember that you need to pay attention to the pricing not to be deceived in your calculations.

In case you purchase the program, you pay once for unlimited number of licenses. You do not need to pay for access to the program neither periodically nor in the case of the staff development. But any updates for your program will be paid.

Modifications and start of the system as part of its cost

Works in settings, updating and running the software will also need to be factored into the total cost of the CRM system.

You will need:

  1. To install the software (when you purchase the program, you will need a large amount of work, setting servers and much more, in the case of Saas solutions may need to install client programs on computers, tablets, mobile phones).
  2. To adjust groups of users, to establish access rights for all groups of employees which will work with CRM-system.
  3. To integrate CRM-system with other services and programs (to adjust information interchange with a web-site, databases 1С, with a telephony and so forth)
  4. Move data from other systems and programs.

Very often while users calculating the expenditures they forget to consider the transmission of data, which is a serious mistake. Data migration is one of the biggest costs when running the system. The data need to remove from the existing system, process, standardize, correct mistakes in them, and then these data can be downloaded in the CRM system.

For example, I usually offer my clients services such as fixing the phone. This is a very common problem: in the cards counterparties 1C, Excel and many other programs the customers phone can be recorded arbitrarily. Eventually, a part of the records is in the format “+7….” another part start with eight, third part — landline numbers even without city code, etc. In order for these phones correctly were entered in the CRM system, they should be standardized, shown in a certain form (often in international format).

It is also important to understand what improvements you need in any case. Even if you are acquiring completely ready-box solution, you still probably need something to work on. Better to focus on what you need to pay and in this matter the services of a specialist as well.

What to modify, if you select a Saas solution?

On the one hand, when using Saas solutions you do not have access to the code, and therefore there is nothing to modify with strength of the programmer. On the other hand, Saas platforms give enough opportunities to customize various forms and reports, business processes, user rights, external appearance of your working system, etc. This work is also need to be trust to the specialist.

Besides, youll need to integrate your CRM system with the website, , telephony, etc. This work also performs specialist, and therefore its cost must be considered.

Standalone solutions require additional investment: purchase or rent a server, its settings, purchases additional software, etc. It is important to understand that when you purchase a Standalone solution, you simply purchase a copy of the program. And all future costs associated with its installation, configuration and using is on you.


You need to understand that in any system there can be failures; first and foremost, this applies to Standalone solutions. And support– is the work of a specialist, which also need to be paid.

When choosing Saas solutions, you may not need any support or it will cost the minimum amount. Most often, once customized solution works fine, unless to try to experiment with the settings.

Why Saas systems dont require regular support:

  1. Such systems are usually very well established, and experts are constantly monitoring the operation of the software.
  2. The functionality of these systems is limited, as it is intended for solving a certain range of tasks and nothing more.
  3. Interface is generally clear, and for most of the actions doesnt need help of professional.

Remind you that for small and medium businesses, I usually recommend the SAAS solutions for CRM systems implementation.


In this article I have not attempted a task on myself to describe a CRM system totally. I wanted to clarify the following questions: what is it, who and why they are needed, and based on what parameters it is best to choose a CRM-system for small and medium businesses. Hope I could help you to sort out these issues. About the diversity and characteristics of different CRM systems already written a lot, perhaps I also will return to this issue again and again. But here and now I have tried to explain basic things from which you can start to get to acquaintance with every CRM system.

Tags: CRM
Hubs: CRM systems
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