What is a CRM and what is it actually for?
A single record of every person and company you deal with, and what happens next.
A CRM is one shared record of every person and company you deal with, every interaction you have had with them, and what is supposed to happen next. That is the whole idea. Everything else a CRM does is built on top of that one fact.
Define it by what it replaces
Before a CRM, that information exists but it is scattered. Contact details in someone's phone. The history of a relationship in an inbox only one person can search. Pipeline in a spreadsheet that is accurate on the day it is updated. Next steps in a notebook or a memory.
That arrangement works until one of four things happens: someone leaves and their knowledge leaves with them, two people contact the same prospect, a customer asks a question nobody can answer because the context is in a departed employee's mailbox, or leadership asks a question the spreadsheet cannot answer. A CRM exists to prevent those four situations.
What it actually does day to day
- Holds the record. Contacts, companies, and the associations between them.
- Logs the history. Emails, calls, meetings and notes, attached to the person rather than to an individual employee.
- Tracks what happens next. Deal stages, tasks, owners and due dates.
- Automates the repetitive parts. Routing a new lead, creating a follow up task, sending a confirmation.
- Answers questions with evidence. Where leads come from, what is in the pipeline, how fast leads get contacted, what closes.
The honest part: when you do not need one
If you are one or two people, everyone knows every customer by name, and you have fewer relationships than you can hold in your head, a spreadsheet is fine. Buying a CRM to feel professional is a way to spend money on data entry.
The signals that you do need one: you cannot answer where last month's customers came from, two people have contacted the same prospect, a lead went cold because nobody owned it, or somebody left and took the context with them. When one of those happens twice, it is time.
Our complete guide to what a CRM is and how to choose one, and how a CRM actually supports a sales strategy.
Related: How do you choose a CRM platform? | What is the difference between a CRM, marketing automation, and an ERP? | What is HubSpot?