5 reasons why you need a small business CRM

woman placing a customer order in a shop
(Image credit: Shutterstock)

Your customers have a huge range of choices when they’re deciding who they want to buy from.

One of the most powerful ways to stand out from your competitors is to create lasting, authentic relationships with your clients. Meeting customer needs through great communication, superb service, and deep insight helps you to build trust—and that really is a competitive advantage.

Creating those connections takes some work, but you’ve got a powerful ally in your corner—customer relationship management (CRM) software. Once the domain of huge enterprise companies, the best CRM software is becoming increasingly important to small businesses.

It’s also getting more accessible and easier to use—a small business CRM ties together your systems, technologies, and processes to put the customer front-and-center. 

What does CRM software do?

Choosing the best small business CRM for your business 

There are hundreds of types of CRM solutions out there, from enterprise software like Microsoft Dynamics, Salesforce, or Oracle Netsuite through midrange CRMs like Hubspot or Zendesk to smaller vendors like Pipedrive, Zoho CRM, or Freshworks. You’ll want to rightsize your CRM software to your small business, and make it a central part of how you work.

We believe it’s worth exploring what a CRM is in more detail—not just what they do and why they matter, but how they can transform your small business. Used well, a CRM helps you to deeply connect with your customers, optimizes how you communicate and sell to them, creates new opportunities, and makes you much more than “just another business”.

You’ll see significant results, too. Customers are likely to spend 20% to 40% more when they engage with a company using CRM; CRM applications can increase revenue by up to 29%; and CRM systems improve customer retention rates, which leads to a profit increase of 25% to 85%.

We’ll start by defining what small business CRM software is and what it does, then outline five key areas on how it can help your organization.

Let’s get into it.

Small business CRM software—what it is, and what it does 

Open plan office with workers at desks

A small business CRM brings all data and interactions related to customers together, so you can better manage relationships (Image credit: Unsplash)

With CRM software you can manage every aspect of the “customer lifecycle”. This starts with initial marketing campaigns and leads, then supports sales and onboarding, ongoing client requirements, customer service, and reporting. 

It brings together all of your customer information and interactions in one place for seamless relationship building. CRM software integrates with your other systems, automates common tasks, and lets you optimize how your small business functions.

We can break CRM functions down into several areas.

Storing customer information

  • Records and updates customer contact details
  • Centralizes customer data from across multiple systems
  • Provides a single view of each customer, communication, and interaction

Managing leads, deals, and sales

  • Captures potential customer interest in buying your products or services
  • Manages the sales process for each customer, from initial interest through to closing the deal and follow-up
  • Helps to keep the sales pipeline full

Driving marketing and promotional campaigns

  • Provides insight into your customer base to allow for audience segmentation and targeting
  • Tracks the effectiveness of marketing campaigns at creating leads
  • Builds a marketing funnel, so you can tailor your campaigns to customer awareness and interest

Making and tracking customer interactions

  • Manages email, phone, and other communication channels with customers
  • Implements social media, omnichannel, and other types of marketing
  • Brings together interactions made in other customer-facing systems

Creating and storing quotes, proposals, and other documents

  • Manages the quoting and proposal management processes to win new business
  • Creates a central storage area for all of your sales- and customer-related documentation

Integrating and automating business systems and processes

  • Integrates with multiple other business systems to provide a central point of management, awareness, and control
  • Automates common tasks within the customer lifecycle to ensure nothing falls through the gaps
  • Drives best-practice workflows and business processes for best-in-class customer management

Providing customer service and support

  • Supports customers with questions, issues, or requests
  • Strengthens the customer journey through customer success activities
  • Enhances customer retention

Reporting on customer and business metrics

  • Tracks individual and aggregate customer success measures
  • Tracks the effectiveness of marketing campaigns and goals
  • Tracks the efficiency of the sales pipeline and closed deals
  • Allows for forecasting of likely future sales and other KPIs

As you can see, CRMs can be as simple or as complex as you want to make them. You can put them at the heart of your business and run many of your critical functions through them, or limit them to very specific processes like communications or the sales pipeline.

Here are five key areas where a good small business CRM will maximize the success of your business.

1: Starting relationships with potential customers through your CRM 

two women in a business meeting

With the help of a CRM, your small business can improve customer relationships and boost sales (Image credit: Photo by Amy Hirschi on Unsplash)

The smaller your customer base, the more important it is to start off every customer relationship in the best possible way. For small businesses, those first steps can grow into long-term customer sales, satisfaction, and advocacy.

Your small business CRM software ensures every customer gets the attention, products, services, and support they need. Here’s how it can work:

  1. Gather together customer information from email lists, lead generation forms, and other marketing response channels
  2. Create a customer profile for each contact you have, and attach any other relevant information you’ve collected about that person or business
  3. Learn about customer requirements, ask questions, and establish customer interest. Center conversations around customer needs and how your products and services can meet those requirements
  4. Build a repeatable communications process to interact with your potential customer in a welcoming and service-driven way
  5. Ensure that your sales staff follow best practices to start relationships with a specific customer
  6. Track interactions between your business and your potential customer, together with their responses
  7. Create a series of communication and interaction “rules” depending on the customer response
  8. Move through the sales process, looking to close a deal with the customer

Working out this initial customer relationship process requires time, practice, and tweaking. What works for one customer may not work for another. Start identifying the factors that get you to a “yes”, and refine your processes to appeal to different types of customers. 

2: Building relationships with existing customers using your small business CRM 

Once you’ve started interacting with a customer and made your first sale, you can continue developing that relationship. This helps your small business to create repeat sales and retain customers—which is much less expensive than acquiring new customers. 

Your small business CRM software lets you build on the previous good work you did starting a relationship as you develop it further. Here’s how it can work:

  1. Create an onboarding process within your CRM, and use it to get customers up and running with your products and services. Assign resources—staff, support guides, and similar—so your customers can make the most of your products
  2. Continue gathering information about each existing customer—how people and businesses are using your products and services, and the value your offerings provide
  3. Schedule regular follow-ups in your CRM tool for high-ticket sales. Learn how effective your products are and provide customer service and support, as this can be a huge competitive differentiator
  4. Identify other ways that you can help specific customers, and see if they map onto other products and services that your small business offers
  5. Create a sales process to upsell and cross-sell these additional offerings
  6. Track the effectiveness of upselling and cross-selling, tweaking the process as needed

Building on an existing customer relationship is easier than starting one from scratch. You’ll already have a basic level of trust—you can expand on this by getting to know the customer better and suggesting more solutions to help them meet their needs. 

3. Creating a repeatable, client-based sales process in your CRM tool 

Two Women Working on an Online Store

With the right sales process, a CRM can help you balance customer needs and your small business's expertise (Image credit: KOBU Agency / Unsplash)

We’ve mentioned the importance of a customer-based sales process—now it’s time to dive into the details. The right sales process balances customer needs with your expertise, reassuring your clients that you understand them and that your products are the best solution. Here’s how it can work: 

  1. Review and document any existing formal or informal sales processes within your small business
  2. Talk to your marketing and sales teams about existing processes and how they can be reengineered, replaces, or improved
  3. Explore what the “ideal” sales process could look like. Let your sales and marketing teams define the outcomes of a successful sales process, and suggest how you could build one
  4. Start mapping out the end-to-end process with a particular focus on customer interactions and the impact they will have
  5. Use the capabilities of your CRM software to build a repeatable, automated process, so that you have a smooth, understandable workflow that incorporates your best ideas
  6. Test your CRM software and sales process using dummy customers, to ensure everything is working as intended
  7. Start by “soft-launching” your sales process with limited numbers of new prospects. Track how effective the process is at driving conversions and sales
  8. Discuss the sales process with your team, and use a combination of data and team expertise to tweak and refine your sales operations
  9. Make gradual changes and continue to test and refine

Your sales process will adapt and evolve over time. As you get a deeper understanding of customers, and launch more products and services, you can refine your sales process to focus on the value you add. 

4: Build deep CRM integrations and automation with your other business processes and systems 

One of the main advantages of a CRM tool is that you don’t have to build everything from scratch. If you’ve been in business for a while, you’ll already have plenty of customer, sales, and other data in existing applications and systems. A CRM can bring all of this together. Here’s how that can work: 

  1. Identify all of the systems, databases, and other repositories where you’re storing customer, sales, and other relevant data
  2. Audit these data sources to learn what data you’re holding and the format of that data
  3. Identify a CRM tool that will allow you to integrate and interact with data in other systems
  4. Test how the CRM tool can collect, sanitize, centralize, and manage that data
  5. Integrate the data into your other CRM processes—starting and building relationships, sales and onboarding processes, marketing, and other areas
  6. Identify the parts of your CRM processes that you can automate—this might include client communications, resource sharing, customer profile updates, and other parts of your workflow
  7. Track the success of your integrated and automated processes, making changes where you need to

Integrations and automation mean you don’t need to reinvent the wheel. You can build on all the data and information you’ve already collected to create even more optimized ways of interacting with customers. 

5. Drive customer service and success via your CRM tool 

open plan office with workers at desks

CRMs can be integrated with other systems, or offer native integrations, to further strengthen customer management (Image credit: Unsplash)

Your CRM tool isn’t limited to marketing and sales. Many CRM solutions can be combined with customer service, support, and success systems to manage every aspect of the customer relationship. Here’s how that could work for your small business: 

  1. Create customer service and support options based around each client. This will allow a customer to ask questions, report issues, and get personalized help based on their individual needs
  2. Identify the key questions that your customers ask, and create resources and training guides to meet those needs—then deploy them on your website or via email
  3. Create a customer success function in your business, This team, which is closely related to sales, would be responsible for explaining how your products and services are supporting your existing customers. This can help to significantly boost retention

Creating a central place where you can track and resolve everything for your customers leads to a much more holistic and complete approach for those relationships.


CRMs can revolutionize how you manage clients and make sales in your small business. Investing in a CRM will drive up your revenue, set you apart from your competitors, and build trust. 

Your CRM will be a critical tool that brings together disparate processes and systems, so you can create better relationships, gain more customers, and help your small business thrive.

Further reading on CRM software

Should you be considering investing in a business CRM, view our guide to the best CRM software to find the best provider for your needs. In turn, our comprehensive Salesforce review and Freshworks review profile two leading services.

We also discussed seven changes you can make to a CRM for business that will drive customer growth, and answered a key question: what is CRM software?

Paul Maplesden

Paul is a professional writer who creates extensively researched, expert, in-depth guides across business, finance, and technology. He loves the challenge of taking complex subjects and breaking them down so they are easy to understand. He can quote 'The Princess Bride' in its entirety and believes the secret to good writing is Earl Grey tea.