Business software glossary
CRM
Customer relationship management
CRM (customer relationship management) is how a business keeps track of its leads, customers and every conversation with them, usually in software. It makes sure enquiries are followed up, quotations do not go cold and anyone in your team can see where each opportunity stands.
Why it matters to your business
Most small businesses do not lose deals to a competitor’s price. They lose them because nobody called back. An enquiry received on the phone, a quotation sent on email and a reminder in someone’s head do not add up to a pipeline you can manage. A CRM puts every opportunity in one list, with a next step and a person responsible, so the owner can see what is coming and what has stalled.
How it works
- Enquiry. A distributor calls asking for 500 units. You add them as a lead and open an opportunity worth ₹6,00,000 at the New stage.
- Qualify. You confirm their need, timing and budget, and move the opportunity to Qualified.
- Follow up. You send a quotation and set a task to call back on Friday. The reminder reaches you, not a notebook.
- Nurture or close. If they need time, the opportunity sits in Nurturing with a next date. If they order, it is Won and the quotation becomes a sales order; if not, you mark it Lost with the reason, such as price, timing or a competitor.
Over a few months, the won and lost reasons tell you where you win and why you lose.
Common mistakes
- No next step. An opportunity without a dated next action is a wish, not a plan.
- Everything in one person’s phone. When a salesperson leaves, their contacts and follow-ups should stay with the business.
- Never closing lost deals. A pipeline full of dead opportunities overstates what is coming. Mark them lost and record why.
- CRM separate from billing. When the CRM and billing hold different customer records, names, GSTINs and dues drift apart.
Questions about CRM
What is the difference between a lead and an opportunity?
A lead is a business or person you have not sold to yet. An opportunity is a specific possible deal, with a value and a stage, that you are working on with a lead or an existing customer.
What is the difference between CRM and ERP?
A CRM covers the work before and around the sale, such as enquiries, follow-ups and quotations. An ERP covers what happens after, such as orders, invoices, stock, GST and accounts. Having both on the same customer records saves re-typing and gives one view of each customer.
Does a small business need a CRM?
If enquiries come from several places and more than one person follows them up, a CRM stops opportunities from being forgotten in phone contacts, notebooks and chat threads. A business with a few regular customers may manage without one.
What should a CRM record for each opportunity?
The company and contact, what they want, the likely value, the stage, the next step with a date, and who owns it. When a deal is lost, the reason helps you improve.
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