CRM tools for small business: Simple tools to build strong relationships and increase sales

Published Friday 5 December 2025

Table of contents

• What is CRM for small business?
• The customer is key to business success
• What can CRM applications do?
• Best CRM options for small businesses
• How to choose a CRM application
• Integrate with your other systems
• Don't let the data go stale
• Run regular reports
• Automate repeated processes
• Make CRM work for your small business
• FAQs on CRM for small business

Key takeaways

• Prioritize customer retention over acquisition since keeping existing customers costs five times less than finding new ones, and CRM systems can improve retention rates by up to 27%.

• Choose a CRM that integrates seamlessly with your existing business tools, especially accounting software, to eliminate duplicate data entry and create a unified view of customer relationships and finances.

• Maintain data quality by logging all customer interactions within 24 hours, updating contact information quarterly, and establishing consistent data entry habits to ensure your CRM provides accurate business insights.

• Automate repetitive processes using your CRM's built-in automation features to save approximately 2 hours and 15 minutes daily while reducing administrative tasks by up to 40%.

What is CRM for small business?

Customer relationship management (CRM) software is a tool that helps you organise and manage all your interactions with customers and potential customers. Think of it as a central hub for all your customer data.

For a small business, a simple CRM helps you keep track of conversations, understand customer needs, and build stronger relationships. By storing contact information, sales history, and communication logs in one place, you can provide better service and spot new opportunities, all while saving time on administrative tasks.

The customer is key to business success

Customer retention costs significantly less than customer acquisition. Most small businesses focus heavily on sales and marketing to find new customers, but the smartest ones prioritise keeping existing customers happy.

The numbers are compelling. Acquiring new customers costs five times higher than retaining existing ones. This makes customer relationship management a critical business strategy, not just a nice-to-have tool.

CRM software helps businesses track customer interactions and improve relationships systematically. When you use it well, it turns scattered customer information into clear insights that help you grow revenue.

What can CRM applications do?

CRM applications function as centralised customer databases that automatically track and organise all your customer interactions. The software's value depends entirely on how you use it to grow your business.

Here's what CRM can do for your small business:

• Contact management: Store customer details in one centralised location accessible to your entire team
• Interaction tracking: Log calls, meetings, emails, and complaints to maintain complete customer histories
• Automated reminders: Receive alerts when customers need follow-up contact or when opportunities require attention
• Campaign analysis: Track marketing results to identify which campaigns generate the best return on investment
• Sales performance: Monitor team productivity with detailed statistics and identify areas needing improvement
• Customer retention: Create targeted offers for at-risk customers and manage retention events; studies show that CRM systems can improve customer retention rates by up to 27%

Simple CRM applications deliver two key benefits: they maximise revenue from existing customers while streamlining new customer acquisition. Small businesses typically benefit from CRM when they have more than 50 active customers or struggle to track customer interactions manually.

Best CRM options for small businesses

The 'best' CRM is the one that fits your business. Some are built for sales-heavy teams, while others focus on marketing automation or simple contact management. Instead of looking for a single best option, consider what you need most.

Many modern CRMs are designed to connect with other business tools. Finding a CRM that integrates with your accounting software can create a powerful, unified view of your customer relationships and finances. You can explore a range of CRM applications that connect with Xero on the Xero App Store.

How to choose a CRM application

Choosing the right CRM requires evaluating several key factors that directly impact your business success. Focus on these essential criteria when comparing CRM options:

The right features

The right features match your current needs without overwhelming your team, especially since studies show that 43% of customers use fewer than half the features on their CRM. Comprehensive enterprise software often creates unnecessary complexity for small businesses.

Competitive pricing

Competitive pricing means the CRM pays for itself through increased revenue. Calculate your potential return before committing to any system.

Most small business CRMs cost between £10 – £50 per user a month. If the software helps you retain just one additional customer or close one extra sale per month, it typically covers its cost.

Scalability

Scalability ensures your CRM grows with your business without forcing expensive migrations. Consider both user limits and feature restrictions as you expand.

Check the cost per additional user and any feature limitations at higher tiers. Make sure you can export your data to standard formats such as comma-separated values (CSV) or Excel if you need to switch systems later.

Good support

Good support shows in how providers handle customer problems, not just positive reviews. Poor customer service from your CRM provider creates ongoing business headaches.

Evaluate support quality by checking response times to forum questions, availability of phone support, and how quickly technical issues get resolved.

Cloud connectivity

Cloud connectivity lets you access customer information and update records from anywhere, anytime. This mobility proves essential, as 65% of companies using a mobile CRM are achieving their sales quotas, compared to just 22% of businesses using non-mobile systems.

Cloud-based CRMs also handle software updates automatically and provide better data security than most small businesses can manage internally.

Integrate with your other systems

Integration with other systems multiplies your CRM's effectiveness by eliminating duplicate data entry and creating comprehensive business insights. Since a lack of integration is a primary cause of project failure, connected systems save time and provide better customer intelligence.

Key integrations include:

Email and scheduling software

Email and scheduling integration: Automatically log customer emails within their CRM record and sync calendar appointments to track all customer touchpoints in one location.

Accounting software

Accounting software integration: View complete customer purchase history and payment patterns within your CRM. This visibility helps identify your most profitable customers and reveals cross-selling opportunities based on actual buying behaviour.

Other cloud apps

Cloud app ecosystems: Modern CRMs connect automatically with hundreds of business applications through pre-built integrations. This eliminates technical complexity while expanding your system's capabilities.

Review your CRM's integration marketplace to ensure it connects with tools you already use or plan to adopt.

Integration with other systems will save time and remove the need to enter data twice. That in turn will save money and give you useful information to help you deal with your customers.

For applications that integrate with CRM software - such as HubSpot and MailChimp - check out the Xero App Store.

Don't let the data go stale

Fresh data determines your CRM's effectiveness in driving sales and customer satisfaction. Outdated information leads to missed opportunities, embarrassing customer interactions, and poor business decisions.

Establish data quality standards: update contact information quarterly, log all customer interactions within 24 hours, and review customer records before important meetings.

Create consistent data entry habits:

• Log interactions immediately: Record call notes, meeting outcomes, and email summaries within 24 hours
• Update contact details: Verify phone numbers and email addresses during every interaction
• Track outcomes: Note next steps, commitments made, and follow-up requirements
• Review regularly: Audit customer records monthly for completeness and accuracy

Clean CRM data reveals patterns that drive business growth: which customers buy most frequently, what products generate highest margins, and when prospects typically make purchase decisions. Current information enables better sales forecasting and more targeted marketing campaigns.

Run regular reports

transforms CRM data into actionable business intelligence that improves sales performance and customer satisfaction. Schedule these essential reports to monitor your business health:

• Pipeline reports: Track sales opportunities by stage, value, and probability to forecast revenue and identify stalled deals requiring attention
• Activity reports: Monitor team productivity by tracking calls made, meetings scheduled, and follow-up completion rates
• Issues reports: Manage customer service quality by tracking problem resolution times, assigned staff, and customer satisfaction outcomes

Automated reporting delivers consistent business intelligence without manual effort. Schedule pipeline reports weekly, activity reports daily, and issue reports in real-time to maintain optimal business performance and customer satisfaction.

Automate repeated processes

Process automation eliminates repetitive tasks that consume valuable time, with sales professionals estimating they save around 2 hours and 15 minutes daily using automation tools. Modern CRMs offer point-and-click automation that requires no technical expertise.

Comprehensive automation can reduce administrative tasks by up to 40% while improving customer response times. Quality CRM systems offer dozens of automation options that work immediately after initial setup, requiring minimal ongoing maintenance.

Make CRM work for your small business

CRM success depends on proper implementation and consistent use across your entire team. The software enhances human relationships rather than replacing personal customer service.

Implementation checklist:

• Choose wisely: Select CRM features that match your current business needs
• Integrate systematically: Connect with existing tools to eliminate duplicate work
• Train thoroughly: Ensure every team member understands their CRM responsibilities
• Maintain consistently: Keep customer data current and complete
• Report regularly: Use analytics to identify improvement opportunities

If you implement your CRM well, it helps you retain existing customers and makes it easier to attract new ones. The result is predictable revenue growth and stronger customer relationships that support long-term business success.

When your CRM and accounting software work together, you get a complete picture of your business. This helps you run your business with more confidence, not your books. See how simple it can be when you connect your favourite apps to Xero. Try Xero for free.

FAQs on CRM for small business

Here are answers to some common questions about CRM for small business.

What is the best CRM for a small company?

The best CRM depends on your specific needs. Look for a tool that is easy to use, fits your budget, and integrates with your other software, like your accounting platform. The right choice is one that your team will actually use.

Is Excel a CRM software?

While you can use a spreadsheet to list contacts, Excel is not a true CRM. It lacks the automation, reporting, and collaborative features that modern CRM systems offer to save you time and provide valuable insights into customer behaviour.

Does Google have a CRM tool?

Google does not offer a single, dedicated CRM product. However, many small businesses use Google Workspace apps like Contacts and Sheets for basic contact management, and there are many CRM systems that integrate directly with Gmail and Google Calendar.

What is the cheapest CRM service?

Many CRM providers offer free or low-cost starter plans. While price is important, focus on value. The cheapest option may lack the features or scalability you need as you grow. Look for a plan that balances cost with essential features.

How long does it take to set up a CRM system?

Simple, cloud-based CRMs can often be set up in less than a day. The time required depends on the amount of customer data you need to import and the number of integrations you want to connect. Starting with the basics and expanding later is a great approach.