The Ultimate Reference Guide on How To Choose A CRM

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how to choose a crm

Last updated on January 11th, 2024 at 12:34 pm


Every business is unique in many ways, and so is the industry it operates in. 

The question of how to choose a CRM for your business can be a daunting task. There are many different types of CRMs in the market designed to solve specific challenges. It is very important for you to prioritize your needs and then objectively look at all the parameters before you decide the right CRM for you and your team. 

This guide is put together in detail on how to choose a CRM. It helps you understand the various types of CRMs that exist in the market, what do they specifically solve, which CRMs you should evaluate for your business, and finally what are the parameters you should consider while choosing the right CRM software for your business.

Before we get there, let us first understand why companies need a Customer Relationship Management software and what they could accomplish through it. 

Why Do Companies Need CRM Software?

CRM software (Customer Relationship Management) investment is one of the most strategic decisions a company makes. The right CRM can deliver a huge competitive advantage to help companies outgrow competition and gain market-share. 

A CRM system helps automate sales, marketing and service operations. These departments need to manage a lot of data and information pertaining to their leads, client details, deal information, tasks and activities, etc. 

Most companies in their initial days generally track all this information in various spreadsheets, word docs and sticky notes. Over a period of time, this unstructured and unorganized data breeds business inefficiencies and hinders business growth. 

Lack of CRM prevents organizations from being proactive in their client engagements; thereby hampering client relationships & customer experiences leading to decline in revenue. Companies also end up losing a lot of critical information about their clients and deals; which could have delivered them a competitive edge. Last but not the least, the lack of the right information pulls down your team’s productivity and their ability to efficiently meet client expectations. 

It is extremely important for companies to plug these holes in their business operations and lay the foundation for future growth. Most studies have proven that the right CRM can give a boost of up to 50% in your growth.

What Are The Different Types of CRM software?

To be able to choose the right CRM, it is important to understand the various types of CRM software available in the market. 

Deployment: On-Premise CRM v/s Cloud CRM

Generally, CRM systems are of two types depending on the type of deployment – On-Premise CRM and Cloud CRM software

On-Premise CRM software:

As the name suggests, on-premise CRM software systems get deployed within the company premises. The necessary infrastructure, hardware, application software, and database application are installed in the company’s data-center. 

On-premise software involves huge capital investments and costs. The costs include infrastructure, hardware, networking, application software, and database costs. 

You also need to consider the cost to hire and retain a dedicated IT team that can manage your IT infrastructure and business applications. In most cases, these companies solely depend of their own IT staff for supporting its users and change requests that come up from time to time.

The other challenge with on-premise CRM applications is that you will need to constantly plan for updates and upgrades of your systems. Only then you will be able to avail the latest capabilities and features. Also, these updates are extremely critical to remove security vulnerabilities that could come up from time to time. 

These upgrades are applicable to your hardware systems, CRM applications, and database software. At that point in time, one needs to also keep in mind the compatibility and interoperability aspects between these systems. 

If not planned well, on-premise CRM applications can lead to a lot of downtime and outages; thereby adversely impacting your cost of business operations. 

While making your decision, it is important that you consider all these parameters and then arrive at the Total-Cost-of-Ownership (TCO). It is not a good idea to blindly look at only the costs shared by the software vendor. I am sure you would like to avoid future surprises after you embark on a project like this. 

Many traditional companies still use on-premise CRM systems. Companies in Banking & Financial Services (BFSI) and Government entities generally prefer on-premise software to comply with data regulations and data privacy norms. 

Cloud CRM software:

Unlike On-Premise CRM, the Cloud CRM application is not deployed within your premises. They are hosted and managed in the cloud infrastructure. 

In this case, the total cost of ownership (TCO) is much lower than that of On-Premise software. You need not commit any upfront capital cost for in-house infrastructure or software applications. Cloud CRM applications are available on subscription based on pay per use model. Also, this model will allow you to scale-up or scale-down easily depending on your business needs. 

You need not spend a lot of money on software upgrades and updates that is generally witnessed with On-Premise CRM. You also avoid any downtime-related costs due to these upgrade projects. The Cloud CRM vendors will seamlessly push these updates making sure you are always on the latest version. 

You may read this detailed article to understand many more differences between On-Premise CRM and Cloud CRM.

Category: B2B CRM v/s B2C CRM

One of the important criteria to decide on the right CRM is to consider the type of clients you work with. The way to analyse this is to look at who pays for your products or services. At a very high level, these get categorized in to two – 

B2B clients: you raise your invoices on companies or legal entities; they are the ones who pay you

B2C clients: you raise your invoices on individuals; end-consumers make the payments to you

The needs of B2B clients and B2C clients are very different. It is important that you select your CRM on this basis to make sure you get the best out of your CRM initiative. 

B2B CRMs are designed and built to enable long-term client relationships to maximize customer lifetime value (LTV); unlike B2C CRMs that’s designed to support high volume transactional businesses. B2B buyers are very rational and cautious due to higher perceived risks. Whereas, B2C buyers are impulsive and emotional. 

B2B CRMs allow you to manage multiple stake-holders, influencers and decision-makers at the client’s place. This may not be a priority for B2C clients. 

B2B CRMs support very high-touch complex sales engagements with long sales cycles unlike transactional short sales-cycles in B2C. 

Last but not the least, B2B CRMs help you to automate your Accounts Receivables (AR), Quotation Management, Order Management, and post-sales Service operations which are not supported by B2C CRMs. 

Department: Marketing vs Sales vs Service

Based on its operational use, CRMs are designed for various LoBs (line-of-business) and departments like Marketing, Sales, Service, Customer Success etc. 

The needs of these departments are quite different and it is important that you select your CRM keeping their objectives in mind. 

Marketing CRM: is designed for helping with large-scale marketing campaigns. The main objective of a Marketing CRM is lead generation, also called demand generation. Integrated marketing tools play a vital role in optimizing the different aspects of campaigns.  Understanding the capabilities of these marketing tools helps in choosing the right marketing CRM.

Sales CRM: is designed to accelerate end-to-end sales operations all the way from lead management to deal closure coupled with order management process. Main objectives of a Sales CRM are to improve deal conversions, boost sales productivity and enhance sales efficiency for the sales teams. It also helps with sales activities and tasks.

Service CRM: is used by clients to automate post-sales and service operations. It is useful to manage service tickets, AMC management and timely service visits. 

Few CRMs like HappSales support a combination of these. It supports other departments like Accounts Receivables (AR) and Customer Success also through its unique integrated Account Management CRM framework

Industry: vertical-specific

As mentioned before, different industry verticals have their own unique needs. For example, a company operating in the Hotel industry would want support with guest loyalty and guest onboarding. Educational institutions would want to improve student engagements and acquisition. Hospitals focus on patient management and patient loyalty. 

So, it becomes important for you to make a list of your objectives that might be specific to your industry and then make a decision based on the solution fitment. 

Usage: Web-based CRM vs Mobile CRM

As per HBR, conventional CRMs have a very high failure rate. The main reason for this is due to poor adoption by the end-users who find these very boring, cumbersome and time-consuming. 

Mobile CRMs can help address these challenges, especially given the fact that an average person spends over four hours per day on their smartphones nowadays. 

Moreover, Mobile CRMs can engage the users better, and help them to capture and fetch information with ease. It is a great way to empower your reps with a productivity tool that can give them the flexibility and freedom to manage their business efficiently. 

You may go through this article to understand Top 10 Benefits of a Mobile CRM

HappSales is the only voice-enabled Mobile CRM that leverages Machine Learning and NLP technologies to help improve productivity by leaps and bounds. This is made possible through a unique personal-assistant called Ami. 

Mobile CRM apps also offer other capabilities like business-card scanning, easy attendance management, GPS support, etc. which are very useful for on-the-move reps.

How to Choose a CRM : Key Factors To Consider

Here is a list of  key factors to be considered when determining how to choose a CRM that is right for your business.

Types of CRM

As discussed in the above section, assessing the various types of CRMs would be the first thing to do. Basis this analysis, you should arrive at the right one for your business – 

    • Cloud CRM or On-Premise CRM 
    • B2B CRM or B2C CRM 
    • CRM for which Department 
    • Is there a need for an industry-specific CRM
    • Mobile CRM or only Web CRM or Both 

You may read the previous section for more details on the above.

Features & Capabilities

You may think that most of the features provided by all CRMs are the same. You will be surprised to find that it is not true. Every CRM is designed for a specific purpose or department or industries or use-cases. 

While the capabilities seem to be the same, every CRM software achieves the objective through unique business flow and design. It is advisable for you to study these in detail and not blindly go by the list of features mentioned. 

Also, try to visualize what features might come in handy when your company grows and scales in the future.

Ease of Use

Analyze the CRM to understand if your users will find it easy to use and adopt. Most CRM projects fail when the users find it complex and they resist to use. 

Find a CRM tool that will require the least amount of training and can be easily adopted. A well-designed user interface of the software makes a huge difference. 

Which is why, as per most surveys, 85% of the users say they consider user-friendliness as an important criterion when choosing a CRM.

Accessibility from any browser or device should be possible. Choosing a CRM with an integrated mobile app is a great choice. 

HappSales CRM was designed with ease of use and mobility at its core, that is why it was awarded Capterra best ease-of-use CRM in 2021.


It is advisable to have a futuristic view evaluating a CRM software. CRM investments are not short-term investments. It is recommended to plan for atleast a 5-year horizon. 

Give some thought to your company expansion plans. This could include the new businesses that you may enter into, the new geographies that you may serve, ever-growing expectations of your users, dynamic needs of your departments etc. 

Make sure the CRM is flexible and scalable to accommodate your changing business requirements. This does not mean that you should select a CRM loaded with a lot of features. Most often companies only end up utilizing half of the features available to them. There is no point is overwhelming your users with features they would not utilize. 

Total Cost of Ownership (TCO)

This is one of the most important criteria when selecting the right CRM system. However, don’t do the mistake of considering the cost of CRM software in isolation. You need to take the sum total of all direct and indirect costs – referred to as the TCO.

Some of the components to be considered to arrive at the TCO includes the cost of CRM software, cost of implementation and training, cost of customization, hardware and infrastructure costs if applicable, cost of regular maintenance for upgrades and updates, other operational costs, etc. 

Look for a tool that aligns with your budget and time commitment. Do you need to consider the number of users when calculating the cost? What are the up-front costs for setting up and training? How much are the monthly ongoing fees? what are the fees for additional support and training? what are the terms of the contract, monthly, annual, multi-year, etc? 

Implementation Timeframe

Total implementation timeframe is an important parameter. It not only gives you an idea on the time it will take for you to go-live, but it is also a good indication of the complexity and costs involved for implementing the CRM software. 

Implementation Vendor

It is advisable if you decide on the implementation vendor beforehand along with the CRM software vendor. This will avoid any surprises later on. 

You should discuss and evaluate the vendor’s expertise in the space, industry experience and domain knowledge of the resources involved. You should also discuss the project timelines, milestones and cost of implementation to arrive at the overall TCO.

Infrastructure Needs

In you are planning for an on-premise CRM software, discuss with your vendor the infrastructure prerequisites for implementing the CRM software. These include necessary hardware, operating system, database, storage, datacentre, security systems etc. 

If you are going for a Cloud CRM software, you may want to check the cloud infrastructure on which the CRM software is hosted. It is advisable to go with CRM applications hosted on the one of the leading cloud infrastructure providers like Microsoft Azure, Amazon Web Services (AWS) or Google Cloud. That way you will be assured that the CRM vendor is using some of the global best-practices recommended in terms of hosting, data security, etc. 

Software integrations

Most companies use a wide variety of software to run their business smoothly, like accounting software, HR software, Indiamart etc.  In order to integrate your CRM with these, you will need to choose a CRM solution that provides an open API for custom integration.


Last but not the least, you need to make sure that you choose a vendor who stands behind their product with excellent customer service and support. Irrespective of the features offered, the choice of a CRM platform that offers exceptional support is of utmost importance. Ensuring a seamless customer experience, starting from implementation to ongoing support should be a key consideration in how to choose a CRM. 

Steps on How to Choose a CRM

Choosing CRM software for your business is not an easy task, especially when there are so many CRMs to choose from. It is a commitment towards a software solution, which needs organization-wide involvement and many changes in the way how processes and people work. It is important to do good research on all the pros and cons, benefits and challenges, resources and options, needs and goals to be able to make an informed decision.

Remember, you don’t have to choose the best CRM available in the market, but rather a CRM that is right for your business and suits your needs. You don’t just buy the best, most expensive car from the market but you need to find the best fit for yourself, that suits your need, fits in your budget, and serve the purpose for which you are buying it. You must research the functionalities well before making that investment. Following are the suggested steps to make you feel confident about your CRM purchase.

Step 1: Define your goals and challenges

A complicated cluster of CRM features should not dictate the best fit for you. Your choice of CRM should depend on your goals and the problems you wish to solve. So, before starting to look for a solution outside the company, start by analysing what’s happening inside the company. 

Create a clear list of problems that are needed to solve or goals to achieve. This can be created on a simple word doc or excel sheet. Creating ISO style document or RFP is not required, just note down the points after discussion with team members. 

Have a separate list of features for must-haves and nice to have. For example, you might need reporting features in your CRM to do a thorough analysis of your business, etc. 

Once you are ready with the list you will have a clear picture of all the features that your company might need in the CRM. You will know what your expectations are from the CRM system, what type of CRM might be the best fit, and what you are trying to achieve through the CRM implementation. You will be able to communicate, discuss and analyse better while dealing with a CRM vendor.

This will help you to be ready to discuss all your concerns in detail. Ask the vendor how his Customer Relationship Management software can help solve your problems. Discuss all the features CRM tool can offer.

Step 2: Involve your leadership team

It is suggested that you involve your leadership team from the beginning. It is important to have their sponsorship and support when you plan to rollout and use the CRM software. 

Involving them will help in creating and communicating a vision for your business. It helps if they get an idea of how their existing challenges will be eased. It will be a good idea to create some excitement around the new changes and transformation that the CRM software implementation will bring.

Your front-line team members will use the software effectively only when they see their managers and leaders using the CRM to manage their own business. This will automatically drive software adoption and let your team members know what you expect from them. 

Following this step from the initial stage will definitely give you an edge you’re your competitors who struggle to make CRM a success.

Step 3: Get a guided tour of CRM

Your business is unique in terms of its processes, business needs, and growth dynamics. You need to know how a particular CRM looks, feels and works for you. Ask the vendor to show how they can help you solve your problems specific to your business. 

Self-trials may not be useful as there won’t be proper support to help you resolve issues. Whereas getting free trials with a guided tour of the solution will help you understand the software better and also give you a thorough understanding of the solution offered.  Compare the solution offered by various vendors and then make a decision.

Step 4: Evaluate Client Testimonials

After you have shortlisted a few CRM vendors, review the client testimonials of the vendors in social media. Going through their reviews and recommendations would help you a great deal in assessing the vendor’s ability to support your business. 

Step 5: Assess True Value of CRM 

While deciding on how to choose  a CRM, many do the mistake of looking at only the cost parameters, and that too the cost of software alone. 

We recommend you to arrive at the true value of a CRM. True value of CRM is calculated by subtracting the total cost of ownership (TCO) from overall benefits. 

This is also referred to as the Return on Investment (RoI of CRM). You may go through this detailed article to measure how your CRM can pay you back.

We already covered the TCO aspects in the previous sections. 

According to research based on 300 CRM customers, it was found that CRM helped them improve in the following along with increased conversions: 

  • Centralization of customer data (87%)
  • Improved data quality and value (70%)
  • Improved visibility of communications and activities (60%)
  • Improved customer segmentation (52%)
  • Increased productivity with reduced manual admin (29%)


A right CRM software can significantly improve business efficiency. It helps boost revenue and profitability by creating customer-focused processes. It can improve your team’s productivity by leaps and bounds. We can easily conclude that CRM helps in increasing ROI from customer intelligence multiple folds.

There are many types of CRMs in the market. It is advisable that you make a list of your goals and requirements to arrive at the right solution fitment for your business.

Try to arrive at the return on your investment by calculating the expected benefits and the total cost of ownership. 

Implementing the right CRM is the best investment you can make for your business and your team. You will we making many other investments for your team’s productivity like laptop, mobile, real-estate, infrastructure, broadband etc. A CRM investment will be a fraction of all these costs and your payroll – possibly not more than 5% of all these costs put together. 

CRM investment is like a gym membership. You will not see the benefits if you and your team does not use it optimally. You need to create an organization-wide enthusiasm to use a CRM in the manner it adds value to your organization and your clients. 

CRMs like HappSales can be used to automate service operations, accounts receivables and customer success operations over and above sales operations. 

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