How to set up your first CRM system

Managing sales processes effectively makes the difference between winning and losing business. Customer relationship management (CRM) systems help you keep track of sales activity and can dramatically improve your success rate.

We spoke to business owners and experts about making the leap from spreadsheets and rolodexes to a CRM. This blog looks at:

• how to choose the right program

• what information to keep

• how to set up a sales pipeline that works for your business

Why move to a CRM system?

CRMs store information about your contacts, including when you talk to them. This can help you develop a sales process, increasing the likelihood of winning sales.

“A lot of new business comes down to having a process and plan and executing against it,” says Ginkgo Business Development founder Jack Thompson.

Being able to record notes and track communication encourages you to agree on the next step when you’re talking to prospects and set reminders when it’s time to get in touch.

Thompson describes his CRM as his “surrogate brain”. One that’s much more effective than trying to remember, writing post-it notes or using a diary, particularly as businesses start to grow.

Dominic Bonaker, founder of web development company We are Odyssey, started building the business through his existing network. But as the team grew, it became difficult to keep track of the conversations people were having.

“We work in a digital company and we were still going through a flipbook of 200 business cards when we wanted to find someone.

“A sale would come in and we needed to do that again, but if we can’t track or identify how we made that sale how can we replicate it?”

What information should I record in a CRM system?

There are three main types of record in a CRM system and basic data every business is likely to record for each.

1. Individual contacts: Their contact details and when you’ve spoken to them.

2. Organisations: You might want to capture industry, size (such as headcount or turnover) and location.

3. Deals: The value, the key people that are involved and when it’s likely to close.

How do I develop a process for using a CRM?

Thinking about your sales process before choosing and implementing a CRM makes sure it will have the most impact. The sales process and how you use your CRM will evolve as you learn but it’s great to start with something that's really useful from the beginning.

While there’s basic data that most CRMs collect, it’s worth thinking about how you’ll use this data and what else might be useful. This depends on the type of business you own and how your sales process works – what information might be helpful in the future?

Most CRMs will allow you to add bespoke fields to records. If you’ve created customer personas, use this as a reference point – what information did you think was critical to identifying key customers?

This could be something like the size of their marketing budget, the size of the companies they help or if they use a particular type of software.

Jack Thompson explains:

“A CRM will help you do targeting and segmentation of your database, so it’s whatever data you think would be useful. You don't have to be too granular.”

Recording the source of leads

One important factor is where leads come from. Thompson says there tends to be four main sources for business-to-business (B2B) companies:

• Client referrals

• Partnerships

• Events

• Marketing

Alongside the type of source, you can record exactly where it came from. For example, a specific event.

Tracking this information means you can refine your marketing. When you look at the deals that you closed in a particular quarter, you might find partner referrals were more important than you expect and decide to focus on them instead of other marketing activity.

Setting up a pipeline

A sales pipeline is a visual representation of where prospects are in the purchasing process. CRMs allow you to manage this really easily and provide a one-page view of the status of every deal you’re working on.

Jack says:

“A good CRM will have a process to track where people are in a pipeline. You can name those different stages. Before you do it, try and map out what stages it could include so you can see your funnel and where people are.”

What steps does your business go through before it makes a sale? Common stages include when someone’s a prospect, qualified prospect and when you've sent a proposal. You might have specific elements to your process like making a site visit or doing a demonstration.

Dominic Bonaker says it may take his company six, nine or even 12 months to close a deal because of the level of due diligence involved. It’s been useful to clearly differentiate larger, more complicated projects from simple work when managing the sales process.

The team has a three strikes and you’re out rule for simple deals, meaning they’ll make three attempts to contact the prospect before moving the deal to the “dead bin”. These are checked after six months and requalified. If they don’t need help at that point, they’re removed from the pipeline altogether.

“CRMs do take some time to get your head around. You need to do it and get into it. There’s no shortcut unless you want to pay someone to set it up. But there are countless YouTube videos on how to set it up. My advice is to try and stick with it.”

Developing a sustainable sales pipeline

The number of sales in your pipeline gives a clear indication of potential revenue. But you need to be ruthless about qualifying deals to maintain a healthy sales pipeline. A CRM will help you do this by prompting you to develop and stick to an effective sales process.

Jack says this can help small business owners avoid the peaks and troughs when business owners take breaks from selling to deliver work.

“If you have a steady stream of activity, you avoid the boom and bust that a lot of small businesses face. It’s a classic thing, particularly for B2B. A process will even out that curve.”

What CRMs are useful for small businesses?

There are a number of low-cost CRMs developed with small business owners in mind. Several were mentioned at a recent Enterprise Nation small business meet-up:

• Pipedrive

• HubSpot

• SugarCRM

Each either has a free trial or remains free while your company has less than a certain number of employees.

Dominic says that as a start-up, cost was the biggest factor in choosing a CRM. He opted for HubSpot that he said gives about 70% to 80% of functionality to small businesses for free.

Mariko Broome runs Mariko Broome Photography and has just started using Studio Ninja, which has been developed specifically for photographers.

“It's got workflow examples, the difference between what you send to a wedding client rather than a family client. It's really handy because it makes sure you have all the steps you need, such as reminding you when you should send them a follow-up email.”

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Relevant resources

• Best CRM software for small businesses (2024)

• When to switch from spreadsheets to CRM

• Why your leads aren't replying and how to fix it: A quick guide