Why do Small-Medium Businesses need a CRM system?
What is the most important asset to your company? Hotel owners and restaurateurs might talk about location, manufacturers about their equipment, realtors about their salespeople. But really, at the heart of all this is the drive to gain and retain customers.
Every business understands the importance of customers — they pay the bills. A business wouldn’t survive without them. While big businesses understand this, they have less of a customer-oriented strategy when it comes to running their business. They are secure in their place in the market, and tend to focus more on R&D, and adding to their product list.
This cannot be said for SMBs, or Small-Medium Businesses. For SMBs, making sales are paramount, which places the importance of gaining the trust and loyalty of customers at the forefront. Unless your product is truly unique, there will probably be 10 or more SMBs just like you competing for customers within your market.
To gain an edge on your competitors, you need to work to keep every customer you gain, which means cultivating lasting customer relationships. There are five main reasons why customers leave businesses:
- 1% pass away
- 3% move
- 14% are lured by a competitor
- 14% are turned away by product or service dissatisfaction
- 68% leave because of poor attitude or indifference on the part of the service provider
There’s not a lot you can do about the first three, but numbers 4 and especially 5 is where you can really make a difference in your customer retention rate. You do this with the help of a CRM system, which is what helped those big businesses leverage their way up there in the first place.
CRM or Customer Relationship Management systems aim to help manage the relationship between a business and its customer in order to build a customer-centric business strategy. It helps you create a superior value proposition — making your customers feel that they are getting more bang for their buck, helping you edge ahead of the competition.
To summarise what a CRM system does in one sentence: It helps you run your business. While this might be an oversimplification, it is nonetheless true. It helps you run the day-to-day functions, so that you have the freedom to make the big decisions that will grow your business. And then it helps you implement those.
It gives you an overview of your customers
Do you remember the Rolodex? Maybe you still have one buried somewhere in the annals of your office filing system.
It’s what businesses used to index business cards and customer information in the days before technology took over our lives. Excel spreadsheets took the place of the Rolodex as the main system for businesses to store information. There are a lot of problems with them, too– spreadsheets get lost, are left outdated, or can easily get into the hands of your competitors.
This is where a CRM system can help:
- It’s a reliable database. You can use CRM to store all your customer information. It’s not just limited to names and telephone numbers, too. It can give you a map of your customer’s address, keep track of purchase history, store copies of signed contracts and more. Everything to do with your customer is centralised in one location, making it easy to get an overview of them.
- It’s easy to use. Having everything in a digital database means it’s easy to find and update. The best CRM systems link to your email and Google accounts, making updating customer information as easy as clicking a button. Most of them also allow you to import your spreadsheets and indexes them for you, which smooths the implementation process.
- It gives you actionable data. Lumping everything in several spreadsheets is difficult, as it doesn’t give you real insight into what you could be doing for your business. Which customers spent the most this year? What did they buy? Who haven’t you sold to? Good CRM systems can give you answers to all of this, helping you do more to drive engagement and boost sales.
- It protects your information. You don’t want that customer list in the hands of your competitors. Employees may leave, but your CRM system stays with you. You can also set permissions that limit who can export your customer database, who can make changes and so on.
It helps you give great customer support
Nothing says “indifference” like bad customer service. There is never a guarantee that when a customer calls, they will speak to the same service rep, so keeping a centralised database that is accessible to all your reps is paramount. This way, your people can find out who they are talking to with just a name.
Identifying the customer, though important, is just the first step. If they are requesting after sales service, you want to make sure they get it as expediently as possible, while keeping standards at their highest.
CRM can help you do that in several ways:
- Capturing service requests from multiple channels. It isn’t always a call to customer service. Some customers opt to email, use social media, or your customer portal. You can have your CRM automatically capture all of this, so that everything is tracked in the system and is there waiting for a rep to take action.
- Sending reminders. CRM systems with this capability can send reminders to reps if action is not taken in a timely manner. This function isn’t limited to service requests — you can set a reminder for everything, from events to calls and holidays.
- Escalating issues. Sometimes there aren’t enough hours in a day. CRM systems can automatically escalate issues up the chain of organisation if they are not resolved within a certain time frame. This ensures that issues never fall through the cracks, and all customers receive the attention they need.
This really only scratches the surface of what CRM can do for your business. Automation is the name of the game, where businesses are increasingly using technology to automate repetitive functions. This helps to free up employees to do more to grow your business, instead of being relegated to data entry. Sales documents such as invoices can be automatically generated, instead of painstakingly typed out. Price lists can be compiled, calculated and generated in minutes, rather than days.
Of course, at this point you might be both skeptical and wary of the sales pitch. This is understandable, since everything in this article has so far just been upsides with no down.
Yes, admittedly, maintaining a CRM system takes some work. As with everything in life, it isn’t effortless, and it doesn’t come for free. However, the facts speak for themselves. More and more companies are turning to CRM to manage and automate their business processes, and are seeing great results. So what are you waiting for?