What Is a CRM and Why Does Your Small Business Actually Need One?

If you’ve been wondering what a CRM for a small business is, you’re not alone. If you’ve ever marketed to customers for a home services business, you already have some understanding of what managing a client relationship looks like. A CRM, or customer relationship management software, is a digital tool that allows your business to manage thousands of clients in an organized way. CRMs are also able to automate scheduled customer outreach. These automations make your business much more efficient, saving your employees time and bringing in more business, both of which can improve your bottom line. And of course, it wouldn’t be 2026 if I didn’t mention the wave of AI being added to CRMs to allow for faster responses to customers. In our Soar CRM, you can even use AI to build your automated workflows.

What does a CRM do?

Let’s take a detailed look at some of the tasks a CRM can handle for small businesses with limited manpower. Starting with the very basics.

Contact Lists

Remember the days of writing down all of your contacts in an address book, or even a rolodex (that’s before my time). Now we all create these lists of contacts in our smartphones, but as you grow your business, you will want to separate personal and business contacts for a few reasons.

You can get away from the business. It is refreshing to take a break every once in a while.
You want to be able to have employees start to manage low level customer support
You want to be able to create lists of potential customers for the future, which we will talk about more later on

CRMs allow you to create contacts and multiple lists to put your customers into. As you continue to learn about the CRM, you’ll see why that is important.

Inbox

Most CRMs also have an inbox to have these conversations with all your new contacts. Some CRMs (like our Soar CRM) can connect multiple channels to the same inbox. For example, email, Facebook/Instagram DMs, and text messages will show up in the same inbox for the same contact. This gives you a quick refresher on any previous conversations your business had with this customer.

Email/SMS marketing

With the contact lists you can create in a CRM, email and SMS marketing becomes simple for a business of any size. I know this because I’ve used both as a solopreneur in my own business. CRMs allow you to create specific lists that your potential clients can subscribe to allowing you to send promotional offers to specific groups. While email marketing is always useful, studies show that SMS marketing typically has better engagement, though the legal requirements can become complex. If you’re interested in setting something up for your business, we offer free setup with our Soar CRM plan.

Reviews Automation

With Soar CRM, you can connect your Google Business Profile (GBP) to automate requesting reviews from clients via email/text. This will lead to more clients leaving you positive reviews on your GBP, which boosts your SEO, creating more leads for your business. You can also automate replying to Google reviews. This is commonly overlooked by many small businesses because of the time investment, however, consistently responding to Google reviews shows Google that your business is active, trustworthy, and customer-focused, all of which align with key ranking factors.

What Are Some Advanced Features of a CRM?

Automations

Now that you have a general idea of some basic CRM features, let’s talk about how you could automate tasks within your CRM. Automation refers to creating a workflow, a repeatable sequence of tasks, rules, and steps that takes a task from start to end. Let’s use email marketing as an example of a task we might want to automate. Say a potential client fills out a contact form on your website. Normally, you would have to manually reach out to them to follow up. With an automated workflow within your CRM, you can send an immediate email to let the client know you received their form submission and that you’ll be contacting them for more details. That immediate response has now brought the person one step closer to becoming a paying client, and not going to another business.

That is the power of automation. When you are a small business with limited resources, these tools help you secure clients while you’re busy.

AI Chat Widgets

Not every CRM has this feature, and not all are made equally, but as AI improves, it will be able to handle more complex tasks for your business. In the current state of AI Large Language Models (LLM), simple recurring questions through your website chat widget can be answered with 100% accuracy. Things like “Are you open today?” and “What services do you provide?” For questions that require more complicated answers, the AI can direct that person to book a call with you on your calendar. In Soar CRM, we also allow you to use AI to build custom automation workflows.

When Does a Small Business Actually Need a CRM?

Despite what many other CRM providers may tell you, there is no need for a CRM when you first start your business. You definitely want to make sure you can afford the monthly subscription (only $97/mo for Soar CRM) and you want to make sure that you have a genuine need for that level of sophistication in your business. Once you are at a point where you feel like it is getting hard to track the various leads that are reaching out to you, or you want to start marketing your business, then I would recommend starting with a CRM. If you’re unsure if a CRM would be beneficial, don’t hesitate to reach out. I love assisting other small businesses, and I will not push you into a CRM plan if it is not the right step.

Why Soar CRM Is Built for Small Service Businesses

Soar CRM offers all of the features mentioned above, and best of all, you get an expert to help you set up everything you need for your business (that’s me, James!). Right now I’m running a summer deal to provide a free single-page website to anyone who signs up for a Soar CRM plan. Schedule a demo here if you want to see what Soar CRM looks like in more detail, or read more here.