CRM and ERP software

Customer relationship management (CRM) software can help your business communicate with and market to customers more effectively. It can also be part of an enterprise resource planning (ERP), which is software that combines data from many areas of your company like financials, sales information and HR

These tools gives you access to key information, so you can target customers with offers or analyse customer data to help your marketing strategy.

How customer relationship software works

Central to every CRM system is a customer database. This stores information about your customers – their names, addresses, what they’ve bought, when you’ve contacted them and so on – so whoever answers the phone has access to all the relevant details.

Customer relationship software enables you to segment and analyse this data. For instance, your best customers – those who spend most, order frequently or have been with you longest – might deserve special treatment.

A CRM system will also include a contact manager, allowing you to log every customer contact. This means customers don’t need to repeat information when they call. Read more about using CRM software.

Is a CRM system for you?

Customer relationship software is most beneficial to businesses with a wide product range and large customer base which they contact frequently. Depending on the package you choose, implementing a CRM system can be a big project, so there are some circumstances where full-blown CRM software is overkill:

• If you make simple, one-off sales, tracking customer contacts might be unimportant. For instance, a used car dealership might only sell to the same customer every five years.
• If you have few customers, you may be able to track them using a spreadsheet, database or on paper. For instance, a graphic designer with 10 clients can keep tabs on them manually.

A good CRM system will boost customer satisfaction by ensuring you contact customers at the right time, with the right information.

Types of customer relationship software

There are three main types of CRM software:

• Standalone CRM systems run on a single computer. They are good for businesses where one person handles customers. Standalone software can cost as little as £20 for a single user up to around £200 depending on the functionality you require.
• Server-based customer relationship software runs from a central server. It allows several people to access the system and is good where several employees are customer-facing. To set one up may require new hardware plus the software – budget at least £1,000 for a ten-person company. 
• Hosted CRM systems like Brightpearl and Salesforce are subscription services. You pay a fee (from as little as £3 per user per month to over £150 per user per month depending on the functionality and features you require) to access a CRM system across the internet. It’s a form of cloud computing and a good way to get the benefits of a CRM system with lower management costs.

You should also consider open source software. There is a range of excellent free and low-cost options that might suit your business including OpenERP and vtiger CRM.

Determine what you want from your customer relationship software at the outset. You can then define a clear set of IT requirements to help you hit those goals.

Do you need an ERP system instead?

A comprehensive alternative to CRM software is an enterprise resource planning (ERP) system. These complex packages combine information from different areas of your business.

A typical ERP system might include customer relationship software, stock control and accounting functions. This would enable you to see instantly what products you have in stock and what prices you can offer them at - all while on the phone to a customer.

As the name suggests, ERP systems are generally used by larger companies. Setting one up is more expensive and time-consuming than implementing a CRM system. The main advantage is that you get a more complete view of what’s happening in your business.

You’ll need to work closely with an IT supplier to create an ERP system which meets your needs.

Read more about CRM and ERP software:

• CRM software explained
• Case study: How a back office system helped my business