Woman talking on head set CRM can help you manage customers and grow sales. — Getty Images

Fostering customer relationships can be a challenge for growing businesses, but nothing could be more essential to your overall growth and success. Customer relationship management (CRM) software has leveled the playing field, making it easier for even the smallest businesses to add sophisticated technology to their arsenal of marketing tools.

To help you understand what CRM can do for your business, this guide will:

  1. Explain what CRM can do
  2. Detail why you should consider customer relationship software
  3. Share steps to assess CRM software features
  4. Provide a checklist of questions to ask when choosing CRM software

What is customer relationship software?

Customer retention is a big deal and customer acquisition can be time consuming and expensive. Research cited by the Harvard Business Review suggests acquiring a new client is between five and 25 times more expensive than retaining a client you already work with. This is one area where CRM software may pay dividends for your company.

CRM software can house customer data, your business data, and track customer interactions as well as leads. CRM software can help automate some of your sales as well as help you facilitate contracts. It can be a hub for customer support including marketing for segmentation of your clients. In general, CRM software is a great tool for managing a business-to-customer relationship.

Benefits of CRM software

CRM does more than keep track of customer data and interactions. Companies leverage their CRM tools for a variety of purposes because they come with several benefits, including:

  • Affordable pricing. Many CRM platforms can be used in a service capacity, meaning you don’t have to download or maintain expensive software. You can use the platform right off the internet.
  • Simplification. CRM software can simplify the complex steps involved in customer relationship building. If you’re thinking of offering a rewards program, a loyalty card or discounts for repeat buyers, that’s an involved process. Even maintaining an email list can be complicated. CRM software can simplify some of these processes.
  • Shared data. Do multiple people in your business work on the same account or have contact with the same customers? Wouldn’t it be great if you could learn about every interaction with an individual customer or client so that you don’t duplicate efforts or frustrate the customer by not understanding their past relationship with your company? CRM software can help with that by centralizing data and making it accessible to all the people in your company who need to see it.
  • Inventory management. Many companies underuse the tools provided by their CRM software. The software can help track who bought what and when so can get a better handle on your business’s stock needs. In bigger terms, the software may help you predict areas of future demand for your product or services.
  • Improved marketing. CRM software allows you to segment your audience to target your messages more effectively based on your relationship with the customer or even what they purchase.
  • Consolidated customer service channels. Many CRM software providers allow you to streamline your social media messages and email inquiries in one place. This can help eliminate duplication of effort by your staff members and streamline your process for customer communication.
  • Web-based access to customer data. Capterra found that 73% of businesses that responded to their survey used a web-based CRM, making customer information and data available from virtually anywhere.

Customer retention is a big deal and customer acquisition can be time consuming and expensive. Acquiring a new client is between five and 25 times more expensive than retaining a client you already work with.

Do you need CRM software?

While CRM software can serve many purposes, growing businesses often struggle with when to take the leap and commit to a CRM solution. In a survey of 500 businesses, Capterra found that more than half of the businesses using CRM started doing so in the company’s first five years in business. About two thirds of the respondents had at least 100 customers when they started using a CRM.

So how do you know if you need CRM? Here are some questions to ask yourself that will help you decide.

  • Are you big enough? Research says there is no “right” time to implement a CRM software solution for your company, but if you’re thinking about using the software to organize customers or clients so that your team can all be on the same page, consider if your team is large enough to warrant that solution.
  • Is your customer list becoming unmanageable? If you have many different types of client relationships, CRM software can make it easier to segment them out to better market your product or service.
  • How complex is your product or service? Managing customer relationships when you don’t speak to customers regularly is made easier when you can track those interactions through a CRM. If you want detailed information on what is going on with clients over the course of a long period of time a CRM can help with that.
  • Are you able to quickly react to your market? Real-time insights into what products and services customers are buying will help you improve your agility in a way that traditional market research can’t, according to a study by management consulting firm, McKinsey. It will also help you maintain a high level of customer service by offering quick surveys to get immediate answers into what your customers need from your business.

What to consider when choosing CRM software

Consider some basic questions to guide your choices when shopping around for CRM software.

  • Is it cost effective? The average business spends about $150 per user per month on their CRM. Do a quick cost analysis to see if the software will save you enough time, money and headaches to justify the expense.
  • Who in your company is going to use the software? Identify which departments or employees will most use the software. Is this more of a customer service, marketing, business development or sales department undertaking? Or is it a combination of several areas of your business? Which people or departments will use the CRM will probably direct which software features you want.
  • What features do you really need? Don’t pay for bells and whistles that aren’t applicable to your business. If a package has something you don’t need chances are you’ll be able to find a service that is more tailored to the features you will use.
  • Can it grow with you? Not all small businesses stay small. Make you sure you understand how to transfer data out of a CRM if you need to move to a larger provider. Or, choose a CRM provider that has the ability to accommodate you in the future. Think about not just the features that would serve your business now, but also the CRM software tools that you might like to have in the future.

If you aren’t ready to fully commit your business to paying for a CRM, most vendors will allow you a free trial.

CO— does not review or recommend products or services. For more information on choosing the best CRM software, visit our friends at business.com.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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Published February 25, 2019