Every time a customer clicks an email, makes a purchase, or reaches out to support, they leave behind a piece of data. Multiply that across hundreds or thousands of contacts and it adds up fast. That's exactly what customer relationship management, or CRM, is designed to solve.
CRM stands for customer relationship management. It is the process of managing interactions with existing and prospective customers throughout the sales process. Any strategy or approach that uses data to build, improve, and manage customer relationships falls under the CRM umbrella, but the term most often refers to the software and technology that makes it possible.
What is CRM software?
CRM software or technology is a tool or system of tools that help businesses aggregate, organize, and analyze customer information data to better manage relationships with customers throughout the customer lifecycle. This includes enhancing customer loyalty by providing a personalized experience.
CRM systems are designed to integrate seamlessly with various business tools to streamline operations and enhance productivity.
Some of the key compatible tools include calendars for scheduling and tracking appointments, messaging and email services for communication, and phone call applications for efficient customer interactions.
This compatibility ensures that all your business processes are connected, allowing for a more cohesive and efficient workflow.
When data for potential and existing customers is collected and stored in a CRM system, tracking information across every touchpoint in a customer's journey (details shared through forms, engagement with marketing campaigns, interactions with customer support, buying patterns) can help you cater to their needs, build better relationships, and market smarter.
CRM software can help your business grow, and organizations in all industries are adopting CRM technologies and reaping the rewards; more than 64% of companies say CRM tools are impactful or very impactful.
Key features of CRM software
CRM software packs a lot of functionality into one platform. The most commonly used features include:
- Contact management: Store and organize customer information in a central, searchable database.
- Customer segmentation: Group contacts by behavior, demographics, or purchase history to send more targeted messages.
- Marketing automation: Automate email campaigns, drip sequences, and follow-ups so nothing falls through the cracks.
- Personalized customer experiences: Use what you know about customers to tailor every interaction, from subject lines to product recommendations.
What does a CRM system do?
In short, CRM (Customer Relationship Management) systems serve as a hub for organizing and making sense of valuable audience data and insights, providing all the tools needed to collect and manage information about people who are important to your business.
This single platform allows for seamless interdepartmental collaboration among sales, marketing, and customer service teams.
This function can look very different across departments. For example, CRM can:
- Help sales reps quickly see past interactions and purchases before making a phone call, enhancing their sales pipeline management and improving sales performance.
- Provide support teams with the background and contact information needed to provide great customer service (promoting interdepartmental collaboration and efficient file sharing)
- Give marketers access to details that will help them target their campaigns, and tailor their marketing messages using effective CRM Marketing strategies.
Organizing and understanding CRM data insights has become a key responsibility for any customer-facing role within a company. But as the importance of audience info grows, so does the amount of details that businesses need to keep track of.
With many online channels and multiple ways for customers to engage on each, data often gets siloed in different tools, making it difficult (or impossible) to get a complete picture of your customer and talk to them in a meaningful way.
That’s why businesses of all sizes and across all industries are turning to CRM tools to create a central hub - a unified platform — for audience reports. This helps in gaining a better understanding of who their customers are and what they want, and building stronger relationships as they grow.
CRM software also helps them engage with potential customers, gain time with sales automation, increase customer engagement and close more deals.
The numbers don’t lie; the average ROI on CRM is $8.71 for each dollar spent, according to Nucleus Research.
Why is CRM important for marketers?
As a marketer, you collect valuable information with each campaign you send and every customer interaction that results from it (including clicks, views, and purchases across new, existing, and prospective customers).
Your customer knowledge is one of the most valuable resources you have for improving your marketing and sales to grow your business.
Effectively collecting and organizing your info can tell you everything you need to know about your customers’ preferences: Which products they love, what they’re looking for, the messages that tell them what they need to know, and where you’re still missing the mark.
The sooner you can begin capturing, organizing and making sense of that data through a CRM Marketing platform, the sooner you can start using it to improve customer experience, streamline your sales cycle, and build better customer relationships.
Moreover, CRM provides insights into customer behavior and customer activity, allowing you to make informed decisions in your marketing strategies. With features like email marketing, drip marketing campaigns, and automation workflows, you can deliver timely and relevant marketing messages to your audience across mobile devices and social media platforms.
Do small and midsize businesses need a CRM tool?
CRM isn’t just for enterprise businesses or Fortune 500 companies. In fact, 91% of companies with 10 or more employees use a CRM.
Using statistics to improve customer relationships has become an essential function for businesses of all sizes and niches. In fact, there’s no better time to do contact management than when you’re just starting out.
From the moment you create an online presence for your business, you start gaining access to valuable info about your customers and potential customers.
CRM can help you lay a strong foundation for building and tracking relationships with those customers, collecting data about their preferences and setting up marketing automation processes for consistent, personalized touch points over time.
CRM doesn’t need to be a full-time job: Whether you have a small sales team or you’re a solo entrepreneur relying on occasional marketing campaigns to sell your brand, putting your data to work for you can help you stay on customers’ radar, find news sales leads and save time.
It also allows you to make knowledge-based decisions about where to focus your budget to reach customers on whatever channel they prefer—so however or whenever they’re ready to make a purchase, they’ll think of you. Plus, using CRM tools can give you a competitive advantage in your industry.
How to choose the right CRM for your small business
Your specific needs for CRM will vary widely based on how your business operates and sells to customers, so you should always take the time to figure out how your strategy will look based on your goals.
Here are the key questions to ask yourself when evaluating your own needs:
Who will use your CRM tools?
Consider everyone in your organization who could benefit from access to customer insights (whether it’s just for visibility or to use data for a specific purpose) to find a tool that will accommodate what you need, ensuring effective sales management and customer service. This promotes better interdepartmental collaboration.
How much complexity do you need to get started?
You likely won’t build a complex CRM strategy overnight. Find a tool that will allow for a simplified approach with the basic features you need, so you can adjust your strategy and add complexity gradually as you learn.
Consider the cost aspects and potential cost challenges associated with different CRM solutions, and look for options that offer a trial period.
Which marketing channels are you using to talk to your audience?
Find a tool that integrates directly with the channels you use most, so that info can quickly be turned into action, and insights are unlikely to get siloed or lost. A CRM that offers a single platform for your marketing needs, including email marketing, social media, and support for mobile devices, can provide a competitive advantage.
Will your CRM scale with you as you grow?
Over time, you will find new ways to use your audience reports and automate CRM processes, so it’s important to find a tool that allows you to add this functionality as you’re ready for it.
But keep in mind that if there are CRM processes you’ll never need, you don’t want to be paying for (and working around) unnecessary complexity. Look for a CRM with a flexible business framework that aligns with your business objectives and offers a blend of features suitable for your needs.
CRM vs. other business tools: what's the difference?
CRM often gets lumped in with other marketing and sales software, but there are real distinctions worth understanding, especially if you're trying to figure out what you actually need.
CRM vs. marketing automation
Think of CRM as the system of record and marketing automation as the system of action. CRM manages relationships: it stores contact data, tracks interactions, and gives you a complete view of each customer. Marketing automation executes campaigns: it sends emails, triggers workflows, and moves leads through a sequence based on their behavior.
The two work best together. Your CRM tells you who someone is and what they've done; your automation tools use that information to decide what to send them next. If you're a small business just getting started, you may find a platform that does both - like Mailchimp - is all you need.
CRM vs. email marketing software
Email marketing platforms are built for sending: designing campaigns, managing lists, and tracking opens and clicks. CRM is built for knowing: storing the full history of every contact and understanding the relationship over time.
The distinction matters less when you use a tool that combines both. Mailchimp gives small business marketers the ability to manage contact data and send personalized campaigns from the same platform, so the insight and the action live in the same place.
How Mailchimp can help with your marketing CRM needs
Most Mailchimp customers know their campaigns generate helpful data reports—but many don't realize Mailchimp also provides tools to organize and interpret that info on a higher level. Best of all, many of these tools are free.
Create a central hub for customer data
When all your audience data lives in one place, it's easier to spot patterns and act on them. Connecting your e-commerce store to Mailchimp automatically imports customer data into the platform, giving you a cross-channel view of who your customers are, how they engage with your marketing, and what drives purchases.
Segment your audience for more targeted campaigns
You want all your customer insights in one place—but you won't want to talk to everyone the same way. Mailchimp gives you instant access to pre-built segments based on data already in your account (location, age, engagement), and lets you build custom segments with up to 5 criteria for even more precise targeting.
Organize your contacts with tags and groups
Mailchimp's tags and groups give you flexible ways to organize your audience. Tags are labels you assign—like "uses coupons" or "social media influencer." Groups are self-selected by subscribers when they sign up. Both can be used to filter your audience and trigger targeted campaigns.
Personalize your campaigns
Use merge tags to include details like a customer's first name or a product they've browsed. Personalize send times by time zone or open history. With a connected store, you can even predict customer demographics to tailor your messaging further.
Automate your marketing
Once your data is organized, put it to work automatically. Mailchimp's automations can help you:
- Welcome new subscribers with a discount or promotion
- Recover lost sales with abandoned cart emails
- Reward your best customers with exclusive offers
- Nurture leads with drip campaigns over time
Mailchimp tracks revenue from each automation so you can see what's working and optimize as you go.
Optimize campaigns based on data
Test subject lines, images, and content to see what resonates. Mailchimp's growth, engagement, and revenue reports give you a clear picture of campaign performance—and the more you use it, the smarter your insights get.
Target new customers more effectively
Your CRM data isn't just for nurturing existing customers—it can help you find new ones. Use your best customer data to build Facebook lookalike audiences and target the people most likely to love what you offer.
How small business marketers use Mailchimp for CRM
Here's how a few different business types put these tools together:
- E-commerce: Sync store data, collect leads with pop-up forms, and use tags to track customer interests for personalized campaigns.
- SaaS/digital products: Integrate your app to sync user data, tag users by in-app behavior, and trigger onboarding welcome series automatically.
- Content/media: Use signup groups to capture subscriber interests, then use that data to create more relevant content and find the best times to engage.
Need something more robust? Mailchimp integrates with standalone CRM platforms for businesses with more complex sales processes. But for most small business marketers, Mailchimp has everything you need to get started.
Better customer relationships start with the right CRM
CRM is both a strategy and a tool. At its core, it's about knowing your customers well enough to serve them better and having the infrastructure to act on what you know.
You don't need to be a large enterprise to benefit from that. In fact, the businesses that get the most out of CRM are often the ones that started early, while their data was still manageable and their processes were still being formed.
Getting organized at the start is far easier than untangling years of scattered spreadsheets and siloed tools later.
The right CRM grows with you. It starts with basic contact management and expands into segmentation, automation, and multi-channel personalization as your needs evolve.
For small business marketers, Mailchimp is built to be that starting point, giving you everything you need to put your customer data to work without the overhead of an enterprise-grade system.