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CRM software 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.

However, you may wonder if a CRM platform is hard to use, expensive or if your company needs one right now. Read on for help in understanding what the right CRM can do for your business.

What is customer relationship management (CRM) software?

Customer relationship management software, abbreviated as “CRM,” stores and organizes customer information like contact and sales data in a central location, making it easier to access and manage. But it's much more than a list of contacts and phone numbers.

CRM software can house customer and business data and track customer interactions as well as leads. It can automate some of your sales and help facilitate contracts. Moreover, CRM systems can be a customer support hub through functions including marketing for the various segments of your clients. In general, CRM software is an excellent tool for managing a business-to-customer relationship.

Benefits of CRM software

The right CRM software for your business can give you an edge over the competition. These programs aren't limited to contact management; instead, a CRM system enhances your sales process, customer experience and even your team's performance. The benefits of CRM software are vast and include:

  • Affordable pricing: CRM platforms may be cloud-based software as a service (SaaS) tools or on-premises programs. Typically, pricing depends on the number of users. But small businesses may choose a free CRM or free trial to see if it's a good fit for their company.
  • Mobility: Today's cloud-based CRM tools work in a web browser or mobile app. Employees may use smartphones and desktop devices, allowing your sales and marketing teams to have real-time customer data regardless of their location.
  • Streamline communications: CRM software keeps all employees on the same page when communicating with customers, ensuring a consistent customer experience and unified brand voice.
  • Save time: Marketing automation tools can simplify workflows and reduce data entry errors, letting your sales team or marketing staff be more productive during work hours.
  • Protect your brand reputation: Consistency is key to customer satisfaction. CRM systems let small businesses monitor interactions across several channels, making it easier to deliver excellent experiences and quickly offer customer support if something goes wrong.
  • 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. CRM systems can automate some of these workflows.
  • Improve marketing campaigns: CRM software allows you to segment your audience to target your messages more effectively based on your relationship with the customer or even their purchases.
  • Increase sales: Customer and contact management systems help streamline lead nurturing and your sales process by building a pipeline and automating associated tasks.
  • Customer retention: CRMs offer sentiment analysis, automated ticketing, customer support automation and user behavior tracking, which help flag potential issues to prevent poor customer experiences.
  • Detailed analytics: CRM software collects and analyzes data (like click-through rates, bounce rates and sales team performance) so you can use it for related decisions.

Do you need a CRM system?

As your business grows, so does your customer base and, hopefully, your sales pipeline. Consequently, managing your customer data, social media channels and leads may consume your sales team's resources. As a result, a small business may need more than a spreadsheet to track customer interactions. An easy-to-use CRM with valuable features may solve current or potential problems.

However, many technology systems offer task management, third-party integrations, lead management and even project management tools. Should you choose one over the other? While there isn't one correct answer, it's important to compare features and select tools that fit your needs. Furthermore, look for opportunities where you can use the CRM alongside or integrated with other business software.

For instance, some companies use Trello as a project management tool and a CRM. Others connect Trello to their Freshworks CRM, Zoho CRM or Salesforce account. Additionally, Capterra found that 73% of businesses that responded to their survey used a web-based CRM, so you may want to consider a subscription to cloud software over an on-premises system.

Capterra also notes 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 began using a CRM.

Research cited by the Harvard Business Review suggests that acquiring a new client is between five and 25 times more expensive than retaining a client you already work with.

There are a few signs that you should invest in CRM software. Ask yourself the following questions to see if it’s time to add a CRM:

  • 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.
  • Could automation or artificial intelligence (AI) tools improve your business? If your company spends a lot of time on data entry, you may be better served by adopting CRM software that automates tasks for your marketing team.
  • Does your sales team have the right tools at their disposal? CRM systems support sales management by providing features, such as lead scoring, sales forecasting, data analytics and sales pipeline reports.
  • Are your marketing and sales teams communicating? Your sales team and marketing staff need access to the same customer information and should be able to easily pass along important details about leads or current marketing campaigns.
  • Is your customer base changing as your business grows? Behavioral and demographic shifts affect the return on investment for your promotions and marketing campaigns. CRM systems help track patterns and keep sales and marketing teams agile.
  • Are your customers satisfied, or is there room for improvement? As a business expands, it gets tougher to deliver the same personalized customer experiences. Customer relationship management tools free up your time to provide those personal touches.
  • Can your team access customer data from anywhere? Whether your team needs a phone number or wants to contact potential customers, your business relationships could be at risk if they're limited by location. Being able to access customer information using a mobile app is valuable during weather emergencies or unexpected closures.
  • Does your customer service need an update? From phone calls to live chat, clients want to contact you on their terms. Businesses can use CRM systems to track customer satisfaction across multiple support channels.

Customer relationship management software examples

So how do companies use CRM software? Small businesses use CRM platforms to enhance customer experiences and streamline workflows. This is one area where CRM systems may pay dividends for your company. Of course, they’re also used to build customer relationships.

Below, we'll explore three small business use cases for using a CRM system to track leads, improve customer satisfaction rates and develop stellar marketing campaigns.

CRM software for sales teams

Members of your sales team can use CRM software to see the real-time status of leads in their sales pipeline and use auto-generated reports to determine the best time to contact leads. At a glance, they can view communication preferences and learn the time, date and device used to interact with your brand.

The CRM supports sales management with features designed to inform your sales representatives and remind them when to follow up with a lead. Supervisors and individuals may access sales forecasting reports and use that data to decide when to run another lead-generating campaign.

CRM systems for marketing

Once a company grows, an email marketing platform doesn't always have the capabilities to handle a wealth of data. Small businesses often start with a CRM system for its contact management features. This way, they can integrate their email marketing program into their CRM or use the CRM system’s native email marketing features. Then, sales and marketing teams have access to one source of data and know they're working with the most recent contact information.

Marketers can segment potential customers to increase email open rates and develop cross-platform campaigns. Marketing automation tools also reduce time spent on data entry and let your marketing team focus on creating personalized messages.

CRM platforms for maintaining customer relationships

Research cited by the Harvard Business Review suggests that acquiring a new client is between five and 25 times more expensive than retaining a client you already work with. Therefore, many small businesses use a CRM system for customer relationship management. Some tools may integrate with your cloud-based phone system, allowing business owners to track customer service calls and customer sentiment. The system may connect to your rewards or loyalty program as well.

You can see a higher return on your technology investment by using your CRM throughout the customer lifecycle. Moreover, CRM reporting features provide data that your business needs to make decisions involving your promotions and budget. Learn more about features that support your teams by reviewing our guide on how small businesses use CRM software for managing customers and sales.

Next steps: what to do before choosing CRM software

Adding customer relationship management software to your business is a time and financial investment. Since CRM prices and features vary, what works for one company may not be suitable for your small business. If you think your business needs CRM software, take these steps:

  • Determine how many people need access to your CRM system.
  • Decide where and how sales, customer service and marketing teams will use the CRM.
  • Discuss what CRM platform features are essential to your business operations.
  • Come up with a budget that includes monthly costs and onboarding expenses.
  • Think about any third-party integrations that you want to use with your CRM.

When you're ready to explore your options, check out our guide to learn how to choose the best CRM software.

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 July 14, 2021