How to painlessly choose a CRM tool in less than 1 hour

Information Overload is one of the biggest irritations in modern life. This is exactly what I experienced when I was tasked with finding an appropriate CRM tool for Gradient, a tech startup. A simple Google search poured forth hundreds of sponsored ads from CRM companies around the world, all promoting their services. In the same way, I came across thousands of blog posts from independent reviewers revealing their own experiences. Unfortunately, finding a source of information that offered a summarised service, cost and storage comparison of popular CRM tools was difficult.

I set out on a mission to explore five popular CRM tools available today and carried out comparative analysis. I am now providing you with my findings, which hopefully will help you to make the right choice when selecting a CRM tool most suited for your business needs.

What does this blog cover?

1. What is a CRM?
2. What can CRM tools do?
3. CRM complexity for start-ups
4. Popular CRM tools used today
5. How we made a choice.
6. What did Gradient choose?

What is a CRM?

Customer Relationship Management (CRM), was first coined in the 1990s. At the time, it simply meant managing the relationship with your customer. Today, it is used to describe software designed to manage this relationship, brought about by technological advancements, innovative drive and demanding clients. Gartner predicts that the global CRM industry will total $36.5 billion by the end of 2017. No wonder there are thousands of CRM companies playing within this super crowded and lucrative field, tailoring their offering by industry size, features and pricing.

What can CRM tools do?

There seem to be four things that are handled by your average CRM tool:

1. Sales Force Management — These tools help to manage your sales pipelines, nurture leads, acquire new customers, and on-board new clients with ease.
2. Marketing Automation — These tools allow you to automate aspects of your marketing, so you can more effectively target customers at various stages of the sales funnel. For instance, taking care of predictable tasks like initiating an email campaign whenever a new prospect enters the system.
3. Analytics — Analytical CRMs make it easier to manage the processes of customer acquisition and retention, as well as keep track of customer details. This is an ideal solution for companies that want to collect and analyse a large amount of data.
4. Collaboration — This type of CRM system is designed to improve the customer experience. Collaborative CRM features streamline communication for all parties — both between the customer and your company and between various departments and stakeholders.

CRM tools may simply be used to collect customer data and make data accessible. But as you grow, a CRM can quickly expand to include more sophisticated features to help teams collaborate with colleagues and customers, send customised emails, gather insights and ultimately gather a holistic performance overview in real time. Gradient is currently looking for a CRM that can not only store customer data, but also should be able to become a fully functional tool, that does all of the above in the future.

CRM complexity for start-ups

For a startup, the decision of selecting the right CRM tool can be particularly challenging. To quote an article from Forbes, ‘choosing a CRM system is like buying a garden hose and unless you’re a full-time gardener, you’re not going to know which is the best hose for your needs’. Unfortunately, I’m not a full-time gardener or a CRM expert by any means. But I know for a startup, price is an extremely influential factor and so is selecting a CRM tool that can be aligned to both existing and future needs.

The best way to understanding your existing and future needs is to ask yourselves four questions:

1. What does your business model look like and what does potential growth look like?
2. Consider how many customers you expect to connect with. Will a relationship be created with every customer or only one contact of an organisation?
3. Is there a need to send out emails as a marketing tool? If so, how many? Moreover, does this need to be managed within your CRM or would another email marketing tool be a better alternative?
4. Think about the customer’s journey and experience. Will they find you through social media? If so, you might want good automated integration into those platforms.

Once you have identified your existing position and understood how you think you’ll grow, it becomes easier to determine which CRM tool is most appropriate.

What are the popular CRM tools used today?

Today’s CRM tools offer companies the ability to manage the entire sales process, from initial qualification of leads to opportunity management, forecasting and eventually deal closure. Similarly, some also provide the ability to keep track of campaigns over various channels such as snail mail, phone, email search, social media, and something called “fax”.

Here are the most popular tools I found that are used and championed by similar startups to Gradient.

1. HubSpot

HubSpot offers a full stack of products for marketing, sales, and customer relationship management; powerful alone, and even better when used together. Its free — this is a massive advantage over its competitors such as Salesforce.com and Pipedrive. Some organisations need a fully functional enterprise grade CRM system and there are others that do not. This is where the free HubSpot CRM is positioned and where the paid licence in addition can become fully functional if required. HubSpot does want to sell you its flagship product HubSpot Marketing, as well as HubSpot Sales licences on top of HubSpot CRM, but in our opinion, it’s not a forgone conclusion that you have to take the additional products to get the best out of HubSpot CRM.

2. Pipedrive

Pipedrive is a sales management tool built for salespeople by salespeople. Used by more than 50k sales teams globally, it helps to see the big picture, then gives step-by-step guidance to keep everyone focused on the activities that drive deals to close. Pipedrive is relatively easy to use and helps to keep focus. It is also simple to get started, but powerful enough adapt to any sales process.

3. Close.io

Close.io is an effective platform developed by actual salespeople to help their fellow salespeople make more calls, close more deals, and ultimately hit their targets on or before their deadlines. Close.io is built with the aim of helping users spend more time communicating with their existing customers and potential clients and do less on data entry.

4. Salesforce

Salesforce has capabilities that include sales management, marketing automation, partner relationship management and customer service. These applications help organisations manage customer accounts, track sales leads, conduct and monitor marketing campaigns and provide service post sale.

5. Insightly

Insightly is an easy-to-use, feature-rich CRM software that won’t break the bank. Insightly comes with all the time-saving CRM capabilities that a startup requires, such as contact management, project management, opportunity management and detailed sales reports, all in a single solution. But it can also be scaled to meet your needs as your business grows.

How we made a choice

Selecting a CRM Tool is undoubtedly a complex process and once you have identified your existing and future needs, you need to explore what CRM tools actually do offer.

To gain a better understanding of what the popular CRM tools mentioned above offer, I researched ten key questions that mattered to us.

1. What is the price? We can’t avoid that this is a factor, especially for a start-up.
2. How many users can log in for free? Otherwise known as number of seats.
3. What are the storage restrictions across the various tiers?
4. Can the data be exported? We don’t want to be locked in, and the ability to move to a different system will reduce the risk of a decision for us.
5. Is there a visual reporting and analytics platform?
6. Is there Gmail integration? This is more important for us at Gradient as we use G-Suite and require that integration at the moment.
7. Do they offer API integration?
8. Do they offer a free trial? We want to try it out before we commit money to anything.
9. What are the benefits?
10. Are there any other limitations?

While researching, I built out a summary table to help visualise what I had learned. I found that all five CRM tools offer a number of basic features. They all permit data to be exported, offer a reporting and analytics platform, provide an API interface, and enable users to test the tool on a free trial basis — great news for a startup looking to select an effective tool.

Now comes the difficult part — how can we compare the tools against price, storage and number of seats? The table above does not give a clear, comparative and representative view of the CRM tools, especially with regards to the price and contacts storage. For example, how can we rank each of the CRM tools in ascending order according to price, if each of the tools have a range of different price tiers? In the same way, it is also difficult to rank them against storage levels, as each tool provides a level of storage in a different unit — e.g. HubSpot in users vs. Pipedrive in gigabytes.

I performed a price and storage comparison analysis that provides an accurate and representative assessment of the five most popular CRM tools.

I created three scenarios, shown below, which depict the stages of an organisation’s lifecycle from startup to growth and maturity. These scenarios are only a guideline for comparison purposes, but I encourage you to go to the following link and plug in your business values and see whether your results are similar to mine.

1. Scenario A is the common state for start-ups, with approximately 100 customers and 10 seats (number of users logging in to the CRM tool).
2. Scenario B goes one step further with 500 customers and 50 seats, characterising a growing organisation.
3. Scenario C has 1,000 customers and 100 seats, embodying a fully-grown and mature organisation.

The key reason for creating three scenarios is to model the changing costs a start-up will incur from a chosen CRM tool as a result of growth.

I .Price Comparison

In order to gather a clearer picture of the price offering, I averaged each tier cost of all CRM tools.

Then, I calculated the average price of the CRM tools against all three scenarios.

The results are quite revealing. HubSpot, despite being a ‘freemium’ tool, is the most expensive CRM when additional sales and marketing add-ons are purchased — interesting. Similarly, Pipedrive, which may be the cheapest tool for a startup in Scenario A, has a big jump in price when paying for services in Scenario B and C. It can be attributed to the fact that HubSpot does indeed provide extra sales and marketing add-on services, which Pipedrive does not. Then again, you have to question whether you receive value for money when you have more customers and more seats? Insightly is the cheapest CRM tool for all three scenarios (just), but is this because their services are limited? Same question for Pipedrive. Nevertheless, Salesforce seems to have the fairest incremental increase in price, however only very slightly from the others.

II. Storage Comparison

You need to consider the level of storage you will need for your organisation and how much you intend to use over the years. It is important to note that the storage amount does not just reflect the number of contacts you store on your CRM database, but also your email trace history and other additional documents you want to collect and hold per contact.

The below table indicates the level of storage each of the CRM tools offers. To understand this better, 1GB of storage accounts for approximately 9000 emails and 3000 attachments.

Storage

In order to gather a clearer picture of the storage offering, I first standardised each CRM tool’s storage offering to 20GB. I then averaged the storage.

Standardised to 20GB

Then, in the same way as before, I calculated the average storage of the CRM tools against all three scenarios.

Salesforce holds the least amount of storage in all three scenarios, followed by Insightly. Pipedrive holds the most. You should consider your existing level of storage and how much more you will need in the future.

What did we choose?

After a long week of intense research, cost and storage analysis and detailed comparisons, we decided to move away from HubSpot due to what we perceive to be hidden costs and chose to move to Pipedrive. We felt it would be the easiest to implement, the most effective for our use cases and would provide us with plenty of storage for future growth.

The analysis above is completely objective and Pipedrive didn’t sponsor this post. I worked with the information available on the CRM’s website and spoke to sales representatives to gather additional evidence — some were more forthcoming with information than others. I hope you find it useful when selecting your CRM tool that meets your business needs.