This post was written by Efficyers

Table of Contents

  1. What is a CRM?
  2. How does a CRM work?
  3. Why do businesses need CRM?
  4. Types of CRM Available
  5. How to choose a CRM for your business?
  6. Benefits of having a CRM for your business
  7. Getting started with a CRM

What is a CRM?

CRM stands for Customer Relationship Manager. It represents a collection of tools, processes and techniques used by a business for the purpose of nurturing, acquiring and retaining its customers and managing their relationships with the business.

A CRM software captures data from multiple streams and stores them in an easily retrievable way to ensure a smooth customer journey throughout their lifecycle with your brand or business.

Today, many of us are used to the comfort of having a contact app on our phone to store and remember all of our contact details and this information is just a tap away. A CRM is a contact app for business except that it does much more than just remembering phone numbers.

Any typical CRM system can collect, analyse, store and retrieve customer data from multiple channels into a centralised database that everyone in the organisation can see.

Trivia: It is believed that the term Customer Relationship Management was coined in 1995 by Tom Siebel, Jagdish N Seth and the Gartner Group.

History and evolution of CRM

History and evolution of CRM

Like any modern technology, the Customer Relationship Management software(s) and service(s) that we know and use today was conceptualised and evolved over the past. From being a collection of paper cards to becoming the sophisticated digital customer database that every modern business relies on, the journey of CRM is quite exciting.

The Rolodex

The first ever stepping stone of the modern CRM was the rotating contact filing device called Rolodex founded in the 1950s. Businesses back then were using this method to file their customer information in specially designed cards that are notched onto a rotating spindle.

The database

After the mainframe computer systems were made available to businesses in the 1960s, many businesses adapted them to store their customer data in a digital format. This process then further led to the development of the database model in the 1980s.

By the late 1980s businesses started embracing the digital way of customer acquisition by sending their brochures through e-mail and outbound calls with the help of their customer database they had built.

Birth of automation

When the customer databases became quite large, new technologies and processes were needed to better manage the amount of data businesses collected. This led to the development of Sales Force Automation (SFA) in the early 1990s.

By 1999, the first ever mobile CRM system by Siebel systems was launched to allow on-the-go syncing of user data. Also during the same year, with the growing adaptation of the internet, the concept of Software as a Service (SaaS CRM) was launched by Salesforce with their CRM service, and they went on to become the market leader in the CRM space.

Cloud and social revolution

When the Software as a Service model started to gain momentum, it paved the way for the birth of many cloud based online CRM companies in the early 2000s. Along with it the concept of open source CRM in the form of SugarCRM was also introduced.

By the late 2000s after the advent of social media, businesses understood that they can use social channels to reach their customers.

The present

With the invention of cloud based CRMs came the concept of integration. With the new found ability of a CRM to synchronise with other business tools, businesses were able to accomplish more. As a result, many CRM service providers started to offer integrations with other softwares such as email marketing tools, project management suites, Team communication tools and so on.

Today, the modern CRMs are equipped with artificial intelligence and machine learning capabilities that enable them to predict the entire customer journey with any given brand through the available data about each of the customers in the database.

Now that you have an overview of how a customer relationship management tool came into existence in the form of cards in the 1950s and its evolution over the years, let us try to understand how CRMs are able to process extensive customer information from multiple channels to help your business.

How does a CRM system work?

For an overview, A Customer Relationship Manager fundamentally allows marketers and sales teams to methodically collect and manage information about their company’s past, present and potential customers.

A CRM populates historical user data to help marketers, sales or customer support persons whenever they get in touch with the customer or prospect. This helps the representative to interact with the customer or a prospect in a more personalised way and thereby gain their trust.

To give you an idea, any typical CRM tool will have the capability to track your customer’s interactions across the following channels, but not limited to

  • Forms on your website
  • Search engines
  • Social media
  • Email
  • Phone calls and many more.

In practice a CRM helps with the complete lifecycle of a customer from awareness to upselling and everything in between.

Stages in a Customer Relationship Management System

The stages in a CRM are tied to a typical customer lifecycle. A customer lifecycle starts from outreach and ends with customer loyalty.

Stages in a Customer Relationship Management System

A CRM helps a lead become a loyal customer through the following stages

  • Creating Awareness
  • Nurturing
  • Customer Acquisition
  • Conversion
  • Customer Retention & Upsells
  • Customer Loyalty

The above process is a combined effort between marketing, sales and customer support teams. To help you understand, let’s see how each stage works in detail.

1. Creating Awareness

It begins with the marketing team introducing your business or brand to the prospect through the following activities.

  • Research:
Marketers start off this process with the research about their ideal customer demographics and try to understand what are their interests, likes and other preferences.
  • Segment:
Based on the information collected during the research phase, the customers are segmented into different groups based on their interests. Each group or segment is called an audience persona. This information helps marketers to come up with the campaigns to be targeted.
  • Target:
For each of the target personas, marketers will then run A/B tests with the campaigns that they have come up with to identify what works and what does not.

With the above process, a CRM tool equips marketers with sound knowledge to precisely target each audience persona with effective campaigns.

2. Nurturing

After successfully introducing your brand or service to your target demographics, it is necessary that they are encouraged to learn more through further communications through various touch points.

Marketing team will strategically drive each lead towards the CTAs on the business website and capture the email or phone number, stored on the CRM database.

3. Customer Acquisition

When the contact details of the lead is captured in the CRM system, it assigns further actions to a sales person to help them reach out to the leads through various channels.

All these touch points are recorded in the CRM system which will then analyse and group these information that can be retrieved easily, as and when needed.

4. Conversion

If the leads are convinced and are engaging with your brand often, it is time to push them towards the sale.

Based on the nature of the engagement, each lead will be attributed with a criteria on whether or not they are ready for a sale. These hot leads are then assigned to a sales representative to convince them for a sale.

A lead could be converted into a customer through various stages of convincing, and 58% will buy only based on their beliefs about the brand. So, it is vital that a positive impact about the brand is created among the leads to become customers.

5. Customer Retention & Upsells

A role of a CRM does not end with the conversion of lead into a customer. For any business, customer lifetime value is more important for them to stay afloat and make profits.

Relaxing after making the first sale will lead to low customer lifetime value. After a sale, every business should ensure that their customers get the best possible experience with their product or service and offer support whenever they need.

When you make your customers feel satisfied with your product or service, you can choose to put them into a new nurture sequence for an expensive product or service that you offer.

6. Customer Loyalty

When a customer trusts and buys a product or service from the business, they become loyal and eventually become your brand ambassadors to influence their friends and family towards your product or service.

Why do businesses need CRM?

Why do businesses need CRM?

Whether you are a solopreneur or a multimillion dollar startup, you need to have a streamlined business process across your marketing, sales and customer support teams to understand customer expectations and build an intimate relationship with them. A CRM helps you achieve just that.

For the abilities of a CRM  to generate, nurture, convert, upsell and retain a customer throughout the entire lifecycle, CRM tool has become an essential part of business.

Know your prospects

As a business or business owner, you need to understand and keep pace with the pulse of your customers in every step of the way. A Customer Relationship Manager like Efficy works as a virtual employee for your business to collect every fathomable information about the customer available on the internet.

The collected information is then centralised in an easy to digest way for everybody in the organisation to see. This process will help businesses identify and attribute their customers based on where they are on their purchasing journey with them.

Extract valuable information

CRMs are capable of building extensive dashboards filled with detailed information of any prospect or customer. These information are otherwise harder to collect without the help of CRM. With the help of information wealth created by these CRM and instant data retrieval, marketers and salespeople can work towards providing a personalised and exceptional experience.

Launch personalised marketing campaigns

With the help of information about each of your customers and prospects, it is a relatively easier task to identify the past spending patterns of a customer and accurately predict what they might be interested to buy next.

With this data, marketers can create a funnel for each of the customer profiles they have and target them with personalised campaigns based on the interests of the customer or prospect. This will improve the profitability of the business while freeing the valuable time for every customer-facing department in the organisation.

Automate repetitive tasks

Dealing with repetitive and error-prone tasks take a mental toll on the person. Modern CRMs are not just for delighting the customers, they also are equipped to help businesses by automating the repetitive stuff so that it eliminates the manual errors that might cost you a customer.

Marketing automation

Marketers need to be creative and like to spend their time coming up with creative ideas to promote the product or service. The last thing they want is the boring and repetitive stuff that bogs them of their creativity.

Marketing CRMs are equipped to automate mundane tasks of marketers like sending out campaigns to customers on their preferred channels and keeping track of their status in real time.

Efficy’s marketing automation capabilities helps marketers streamline their workflow and create personalised experiences for customers in real-time.

Sales automation

Similar to the marketing team, the sales team needs to spend their time with the customer rather than spending most of their time on preparing their schedules and leads to talk to.

With a sales CRM like Efficy, a salesperson can quickly identify the hot leads and prioritise who they should interact with. Business is often about being there at the right time for your customers and CRMs help you do just that.

Customer service or Support automation

After sale and customer support is what builds brand loyalty. Customers may jump to your competitors if you are not competitive in offering a great experience for them.

With the help of service CRMs that allow your customers to raise support tickets, you will be able to attend to the most important issues to address rather than spending your time on finding where the problem lies.

A CRM can be a boon to your growing business. We at Efficy have come up with a handbook emphasising the 5 ways to boost your sales with a CRM.

Download 5 ways to boost your sales

Types of CRM software available

CRMs come in many forms, features and capabilities. With various players in the market, it becomes hard for a business to understand them clearly as to what types of CRM exist in the market.

There are fundamentally three main categories of CRM available in the market.

Types of CRM based on Features

Based on the features or area of application, there are three distinct types of CRMs. As the market is crowded with CRMs you will often come across CRMs that can do many or all of the below.

Types of CRM software based on Features

  1. Operational CRM

Operational CRMs are the ones that focus on improving your daily business operations across sales, marketing and customer support.

Operational CRMs are the most widely available CRMs as they solve a very fundamental purpose of what a CRM is for.

  1. Analytical CRM

This breed of CRMs are primarily focused on collection and analysis of customer data. Analytical CRMs will collect customer information across multiple touchpoints and excel in preparing analytical reports that help business leaders to make decisions based on the customer’s behavioural patterns.
  1. Collaborative CRM

Collaborative CRMs are typically your workplace communication tool that has 360° information about every customer to help every stakeholder and employee in the business so that they could accomplish better customer relationships.

Types of CRM based on deployment

Based on the infrastructure that is used to host the CRM software and its data, there are two kinds of CRMs.

  1. On-Premise CRM

The CRMs which are hosted on the business location with all of its server, Operating system, database and all the peripherals are called on-premise CRM.

The greatest advantage of this kind of CRM is the access to great control of every part of the CRM. This type of infrastructure requires upfront investment and the recent boom of cloud has lured businesses to move away from such CRMs.

  1. On-demand CRM

A CRM whose code, OS, database and peripherals are hosted on the cloud and accessed on-demand is called an on-demand or CRM-as-a-Service.

On-demand CRMs offer greater flexibility and can be accessed from any device and any location. As opposed to the traditional methods of hosting the CRM on premise, on-demand CRMs and Cloud based softwares are much more affordable and low on maintenance thus allowing maximum productivity.


Types of CRM based on code

Based on the availability of access to the code that constitutes the CRM, there are two types of CRM available.

  1. Open source

Any CRM whose codebase is available for the public to access and use is called an open source CRM. These types of CRM do not charge anything to give access to their code and hence it is affordable.
  1. Proprietary or closed source

A CRM whose codebase is not disclosed and is maintained by a business or creator and gives conditional access by selling the capabilities of the CRM to the end user.

Unlike open source CRMs where you have to manage every part of it and take care of maintenance and updates, managed or closed source CRMs are consistently looked after and maintained to ensure that you get the best out of it.

Explore how you can grow your business with our detailed handbook on CRM.

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How to choose a CRM for your business?

With varying capabilities and varieties, choosing a CRM that is right for your business is a time consuming process and a careful financial investment. Multiple factors such as price to feature ratio, technical support, ease of use, updates and a lot more have to go into your consideration for a CRM.

We have put together an easy-to-follow process to help you choose a CRM for your business.

How to choose a CRM for your business?

Step 1: Establish goals

If you are starting your search for a CRM, The first step is to identify what purpose a CRM will serve for your business i.e., identify what are the business goals you are trying to achieve with the help of the CRM.

It is important to factor in the historical business performance indicators or KPIs that matter the most to your business. Ideally, you should have Specific, Measurable, Achievable, Realistic and Time bound (SMART) goals defined for the near future, say the next 2 years.

Step 2: Gather requirements

When you have successfully defined the goals you are trying to achieve in the near future with the help of a CRM, the next step is to gather your marketing, sales and support teams to collectively find what their requirements are.

A CRM is a business-wide solution so it is important that all the needs and requirements of every department within the organisation are met with regards to what the new CRM system could do for them against their requirements.

For example, the requirements of your marketing team to create and publish personalised campaigns will be completely different from the requirements of your customer support, sales and accounting teams.

Step 3: Make a list of desired features

After you have set the goals and collected the detailed requirements from all of your stakeholders in the organisation. It is now time to carefully consider the features that your organisation needs in an ideal CRM.

Any CRM involves the use of personally identifiable information of your customer or prospects and hence it is vital that the CRM you are considering should have the basic data protection features like data security through safe and sound storage, two factor authentication systems for authorisation and so on.

Your ideal CRM feature list should include the mission critical features like the following.

  1. Contact Management: Sophisticated and industry leading contact management abilities with centralised contact profiling and retrieval.
  2. Lead Management for marketing: Importance should be given to the capabilities such as lead scoring and lead nurturing to help marketers.
  3. Email marketing capabilities: With the extensive amount of data that a CRM collects, it can help automate the process of ending personalised marketing communications to customers based on their journey with the business.
  4. Sales management and reporting: A complete visual representation of the entire sales process along with the ability to generate reports in a few clicks.

Apart from the essential feature list, there are industry specific CRMs that are built with an aim to solve the problems faced by marketing, sales and customer support teams of that specific industry.

A CRM will have the capability to adapt and scale to every business type and size, so evaluate what customisations you could implement when you choose to go with any CRM.

You may also have the option for some nice-to-have features your CRM provider may offer based on the price you pay for. It is important to clearly understand what you will get from your CRM before proceeding to shortlisting them.

Step 4: Conduct market research

After having a clear list of consolidated requirements, the next step is to research the options available in the market and evaluate them against the requirements. You may choose to take the following approach to find about the various CRM options available for you.

  1. Read reviews: You can search for the online and print media that covers business solutions and look out for their CRM software recommendations that may suit your needs.
  2. Get recommendations: Ask your peers, network and other business owners about their CRM of choice and their opinion about it.
  3. Read user reviews: The best way to assess any product in today’s age is to read the user reviews about the product on public channels. This would give a holistic idea of the various CRM software options even before trying them.

At Efficy, we offer a free trial to unleash your business growth with our 360° customer relationship management platform. Book a demo today. Our expert team will carefully evaluate and guide you through your requirements and suggest the best CRM possible implementation strategy.

Step 5: Implement the CRM of your choice

After trying various options available on the market and deciding on which software you like to go with, it is now time to prepare for the implementation CRM strategy.

From assembling an implementation team with stakeholders from all the relevant teams in the organisation to having the CRM up and running is a collaborative team effort, if done right will definitely lead to success.

Avoid pitfalls

Choosing a new business software solution like a CRM is a time and resource hungry process. There are many options and each one is trying to solve a different problem that modern businesses face so it is important that you do your research carefully before selecting the right CRM for you.

You may evaluate a CRM on the following factors to ensure that you are not getting into any pitfalls and setting yourself for success.

  1. Adaptation: Any good product will have a good adaptation and acceptance from the users. Check whether your CRM of choice is widely used and has received positive feedback from users.
  2. Ease of use: The primary purpose of adapting a CRM is to ease and automate the tedious and repetitive processes within your business. Your CRM should be able to meet your requirements while also not putting you in a steep learning curve.
  3. Availability of mission critical features: You choose a CRM for its abilities and functionalities that matter the most to you. Just because a CRM has an exhaustive list of features for social media management will not solve the whole purpose of marketing across various channels. Evaluate your CRM features wisely before committing yourself to one.


Benefits of having a CRM system for your business

Benefits of having a CRM for your business

After you have successfully integrated the CRM of your choice, it is important that you optimise your internal processes to take advantage of the benefits that a CRM has to offer.

It is given in the name itself, a Customer Relationship Management tools’ primary function is to enable you to better manage the relationship with your customers.

When you have a robust CRM system in place you will have the following benefits.

  1. Centralised Data

A fundamental feature of a CRM is to populate all the available customer data into a single, centralised database that everyone in the organisation can access and make use of.

If you own a chain of retail stores, all the activities from each of the stores is recorded in a centralised database that everyone in the organisation could see and take action when needed.

  1. Data driven processes

Most CRMs have the analytical capabilities that could predict the future behaviours of your customers. This will help you unearth precious data that were previously impossible to gather or arrive at.

For example, let’s consider the chain of retail stores again, with the help of your new CRM you have understood that one of your products is in high demand during a particular day of the week. The operations team then makes sure that you meet the demand of your customers and anticipate any further spike in demand well in advance to provide a blissful experience for all of your customers without running out of supply.

  1. More qualified leads

You post on social channels, you have a blog, you send out marketing emails, you use SMS marketing and all of this data is stored as silos. CRM systems are efficient in combining data from multiple channels and identifying a qualified lead for the sales team to take further action.

A CRM captures and stores every action of your prospects and customers and later gives you an insight to target them with the right message at the right platform to convert a sale. Infact, when you have a CRM in place, your sales cycle drastically goes down.

  1. Automating mundane tasks

Businesses have a lot of time consuming, error-prone, repetitive tasks that engage marketers, sales and support teams. CRM tools will be able to free their valuable time by automating such processes.

Lets again take the example of the chain of retail stores, imagine you are planning on a sale to promote your popular products for the festival season. All of your operational teams from marketing to support need to prepare for this well in advance.

Marketing teams will be able to send personalised marketing campaigns within hours and the salesperson will have all of the hot leads right in front of them sorted by their order of importance so that they get straight to closing a sale.

  1. Increased Customer Satisfaction

When you have a solid, data-driven system backed by a CRM, your team will be able to accomplish more important tasks rather than the boring stuff.

Each team will become efficient in attending the needs of the customers and ensuring they are satisfied. This will lead to increased customer retention levels along with more opportunities to upsell your products and an army of loyal customers for your brand. About 47% of businesses say that a CRM has an immense impact on their customer satisfaction rate.

  1. Easy reporting

With the wealth of real time and historical data available at your fingertips, CRM systems will have the ability to turn them into actionable reports for various teams to take action.

This will then further help to optimise the overall process, thus impacting your business positively.


As you know, a CRM can be a boon to your growing business. That’s why we have created this handbook to help you understand in depth how this software can help you take your business to the next level. Download it now!

Getting started with a CRM

Now that you understand every aspect of how a CRM software could help your business transform into your customer’s dream brand. Let’s guide you towards the most complete CRM solution on the market, Book a demo today.

We at Efficy are committed to offer a 360° CRM system that can be customised to suit your needs and wants. We understand that every business is a world, so first we listen to you and if we think we can help you we prepare a tailor-made solution, thanks to the fact that we are the most flexible and scalable CRM on the market.

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This way, we make sure you don’t spend time and money on finding the optimal solution. Instead, we make it for you.

Find out how Efficy is the best option for your business!

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To know more:

The 7 benefits of CRM use in your company
What is MRR and how to calculate it?