What is a CRM? Definition, uses and examples

A CRM (customer relationship management) is software where you keep your contacts, the companies you sell to, every open deal and a record of what has been said to each customer. It shows where each deal stands and what the next step is.

What a CRM stores

A CRM organizes four kinds of information:

• Contacts and companies. Who each person is, which company they work for and how they reached you.
• Opportunities. Each open deal, with its estimated value, its stage and the expected close date.
• Activities. Calls, emails, meetings and tasks, with a date and an owner.
• History. What each customer has bought or asked for, if the tool connects to your store or your invoicing.

What separates a CRM from a notebook or an inbox is that everything sits together, with dates and an owner.

Three example uses in a small business

All three are hypothetical examples, but each one is a task most sales teams do every week.

1. Quotes with no reply. A design agency sends 20 quotes a month. Each quote is an opportunity at the "sent" stage. If nobody hears back within a week, the deal shows as needing follow-up and the person who owns it sees a task.

2. Customers who stopped buying. An online shop wants the people who bought six months ago and have not come back. The CRM builds that list from orders, so nobody has to search a spreadsheet.

3. Who owns each account. A firm with three salespeople splits contacts by owner. If one of them is on holiday, their deals stay visible to the team, so follow-up does not depend on one person's memory.

Is a spreadsheet enough?

A spreadsheet is enough while one person uses it, the contact list is short and you do not need reminders. It starts to break down when:

• More than one person edits it and changes overwrite each other.
• You need reminders so follow-ups are not forgotten. If the file does not warn you, your memory is the reminder.
• You want a customer's full history (emails, calls and orders) in one place.
• You want to automate a step, such as a welcome email when someone fills in a form.

If two of these apply to you, it is worth comparing CRMs. The guide how to choose a CRM for a small business covers the criteria.

What to check before you choose one

Check three things: whether the CRM fits how you sell, what it costs when the team grows and whether you can export your data when you leave. Flowgration is an all-in-one CRM for small businesses and online stores, with a sales pipeline, multichannel journeys (email, SMS and WhatsApp), a shared inbox and orders synced from WooCommerce and Shopify. It has a free plan. Current plans are on the pricing page, and you can read more about the all-in-one CRM.

Frequently asked questions

What does CRM stand for?

Customer relationship management. The term describes software that organizes contacts, deals and follow-ups.

Is a CRM the same as email marketing software?

No. Email tools send campaigns. A CRM keeps the record of each customer. Many products do both, so check what each one includes.

Does a freelancer need a CRM?

It depends on volume. If you manage a few clients and do not need reminders or a shared history, a spreadsheet can work. If follow-ups slip through, a simple CRM is usually enough.

When is a spreadsheet enough?

When one person uses it, the contact list is short and you do not need reminders or automation.

Does a CRM include invoicing?

Some do and some do not. If you need invoices from the same place, check whether the tool issues them or connects to your invoicing software. Flowgration includes invoicing.

How much does a CRM cost?

It depends on users, contacts and modules. For a comparison with dated prices, read how much a CRM costs.