Categories are the fixed groups your contacts are filed into — Customers, Suppliers, Prospects, Members. They are set up once for the organisation, so every tribe groups people the same way.

What makes a good category

• You would filter a list by it most weeks.
• It describes what kind of contact someone is, not what is happening to them.
• Everyone in the business would put the same person in the same one.

Anything that fails those tests is a tag. Tags are free to create, cost nothing to abandon, and do not appear in every dropdown forever.

Applying them

On the contact, in bulk from the contacts list, or from a column during an import — where names are matched loosely, so "vip customers" in a spreadsheet finds your "VIP Customer".