Technology is transforming business.
It has become deeply embedded in all spheres of a business. And not without reason too.
Here, I am taking a shot at how Customer Relationship Management software, popularly known as CRM is so vital for businesses.
Naah! That’s not for me.
As a small business owner or a digital nomad, you may say that.
I am not going to convince you or even reason with you.
I have just one thing to show.
Pure and simple facts.
I am sure; you can spare 7 minutes to know more.
So, here goes.
CRM is all rage today. For all the right reasons too. Whether you accept or not, businesses have ushered into a new era. It is an era where two things define the fine line between survival and extinction. They are:
(a) Being customer-centric, not business-centric
(b) Valuing the newer crop of more informed, highly connected customers
So, today the survival or extinction of business is heavily dependent on its ability to retain customers.
The word ‘retain’ has many facets to it including:
· You should be able to listen to your customers. You need to understand what problems they are facing. You need to figure out the things you can do to make them happier. You need to be ready to go that extra mile to address and solve every single customer’s grievances.
· You should be able to listen to your customers on every possible platform — social media or mobile or web and even in your brick-and-mortar store.
· You should be able to act quickly whenever you sense negative sentiments among your customers. So, sensing negative feelings is important.
· You should be able to understand when your customers are more receptive to your new offerings. This unique ability will give you opportunities to cross-sell and up-sell organically.
Something may be trivial and not-so-important to you as a business owner. But for a customer, that trivial matter may define their brand loyalty. So, when it comes to customers:
“Every single thing is important.”
Keeping this in mind, what is the question that comes to your mind?
Something like: “What role does CRM Software play in this?”
CRM Software is Customer Relationship Management Software. It is a software designed to build, nurture and maintain a relationship with your customers. This write-up is not meant to discuss the intricacies of a CRM Software. Naturally, I am skipping that part.
So now, the question you should ask is:
“Why should you adopt a CRM Software for your business?”
Well, most people would choose to write how a CRM software is excellent, simply awesome and why you should get it RIGHT NOW.
Stop reading if you think this article is going to follow this trend.
That’s not happening.
Mirror. I am just picking up and showing the mirror of the existing business at large and showing that to you.
To help you, take the right decision for your small business.
The business for which you have probably given days, months and years to build.
You would want the best for it, wouldn’t you?
So, I have collated the facts from diverse think tanks and industry leaders and put it on the table for you.
Whether you choose it or not, is for you to decide.
Phew! I get cold feet when I have to take a decision.
Hah, I am doing the easy part.
So, here goes.
Some people say ‘Numbers Speak’.
But here ‘Numbers Scream’.
1. Types of CRM Software
Before we try to take a look at some numbers, it will be prudent to get a quick understanding of the different types of CRM available in the market. The table provided below will give you an overview of the information you need:
Operational CRM (Marketing, Salesforce, and Services Automation)
CRMs that focus on those processes that are customer-oriented. They basically cover three processes — customer service, marketing and selling.
CRM designed for two crucial things — acquisition, nurturing and retention of profitable customers
CRM designed for the sole purpose of customer data mining in intelligent ways. This data is used by companies in strategic decision making.
CRM designed for better and more efficient collaboration and smoother communication across business stakeholders
As you see, there are types or variants of CRM available. Depending on your business needs, you need to select the one that gives you maximum return.
2. Surprising CRM Stats You Should Know
2.1. Increased CRM Adoption Rate
Here is what you need to know:
Source: Forrester Data Global Business Technographics® Software Survey, 2017
The graph above shows the adoption rate of different types of CRM Software by Small and Medium Enterprises (SMEs). Businesses with an employee count of 20 to 999 are classified as SMEs.
What about the large enterprises? Let’s take a closer look at the below graph:
Source: Forrester Data Global Business Technographics® Software Survey, 2017
It’s pretty much the same story.
CRM adoption rate is fast increasing among large enterprises. Large enterprises typically have an employee count of thousand (1,000) or more.
So, what did we see?
One simple thing! CRM has become an absolute necessity. Today, businesses heavily depend on CRM Software to not only increase their revenue but also to perform their daily operations in a structured and efficient manner.
2.2. Impressive Returns on Investment
Achieving ROI is vital.
You, as a business owner, will definitely wonder about the returns on investment or ROI.
After all, if you are not making profits out of your investments, why will you invest? Here is the answer you seek:
“The average ROI from CRM investment is USD 5.60 for every USD 1 spent.” Getbase
So, if you are using your CRM Software to its full potential, you will be on the winning side!
2.3. CRM Market Growth
From USD 10 billion to a whopping 36.5 billion USD — yes, the CRM market has been growing by leaps and bounds.
It was predicted that in 2017, the revenues of CRM Software would rise to a stunning USD 36.5 billion.
The chart below shows year-on-year growth of the CRM Market:
Impressive consistency, isn’t it?
CRM is adding value to businesses. Otherwise, would the CRM market grow crazily like this?
If those figures don’t ring your bells, here are a couple of more forecasts:
· In 2018, the CRM market will most likely hit 40 billion USD in revenue.
· In 2025, the CRM market will reach a whopping 80 billion USD in revenue. Grandview Research
Did you know?
When 2017 came to an end, CRM software revenues dethroned database management systems to become the world’s largest software market! This data comes directly from Gartner.
2.4. Early Adoption of CRM
Capterra provides some fascinating insights into how quickly companies are adopting CRM.
What is so exciting about the above data?
Note carefully that 61% of companies adopt CRM software within five years after inception.
That’s an overwhelming majority of businesses that go for CRM right when they are probably scaling up.
Early years are also the time when the customer base of a company has a mix of repeat and new customers.
So, customer retention is an area, considered by companies when businesses debate on the utility of a CRM software.
So, we are back to the where we started! Customer retention is one of the most important aspects of a business. Failure to retain customers may eventually mean extinction, and no company in this world ever wants that to happen.
So, now we have another question.
“Which business dimension is most benefitted by adopting CRM software?”
Here is the answer to your question:
· 47% of the businesses reported that CRM positively impacted their customer retention numbers.
· 47% said that customer satisfaction levels significantly improved.
· 45% said that CRM helped them improve their sales revenue.
· 39% of businesses stated that CRM helped them to enhance their bottom line by increased numbers of cross-selling and upselling.
2.5. Sales Beats Other Departments in CRM Usage
This might come as a surprise to you but did you know that for most businesses, it is their sales team that mostly uses CRM?
Well, one pre-conceived notion is that CRM is only for customer service teams.
That’s not true!
Remember we spoke about different variants of CRM? There we have Operational CRM which includes salesforce automation.
A business needs to grow, and rising sales numbers are crucial for any business to grow.
Typically, the sales team of a company has three roles to play:
a. Lead identification
b. Lead nurturing
c. Converting leads into customers
Apart from these three vital roles, salespeople also engage in cross-selling and upselling.
CRM user research by Capterra shows:
· 80% for the companies using CRM actually use it for the sales function
· 46% of the companies use CRM software for marketing
· 45% of these companies use CRM for customer service
· Only a meagre 21% of the companies reported using CRM for IT
Another impressive figure showed up in the research. Out of the 80% of the companies that use CRM for the sales team, 40% of the companies maintain a sales team of 50+ members!
2.6. CRM Usage by Industry
No matter how fast the CRM adoption is increasing, the overall growth rate in different industries is quite sluggish.
However, when I say industry, I am referring to the industry on a global scale. So, industry adoption will undoubtedly be an average.
Irrespective of that, the trend of CRM market revenue shows that CRM technology is one of the highly coveted technology in the world.
I found that piece of statistic from the Capterra research and formed a quick table for you:
Retail Industry is picking up CRM technology way faster than any other industry. One of the primary reasons is perhaps direct customer interaction. This industry mostly belongs to a B2C category, and it is of utmost importance to them that they build strong relationships with their customers. Brand loyalty can make or break businesses in this industry.
Customer satisfaction plays a pivotal role in this industry. Understanding customer sentiments and addressing their grievances is one of the cornerstones for the industry.
Luckily, a modern breed of CRM software has hit the market that is powered by AI or Artificial Intelligence. AI empowers the sales, marketing and customer service departments of companies in this industry in ways that were once thought to be humanly impossible. The AI-powered CRM software enables these businesses to give a human touch to customer interactions while leaving mundane tasks to bots.
2.7. The Most Used CRM Features
CRM is like the ‘Cool Dude’ in town — managing to wow everyone. The question you might ask is,
“People are using CRM software but, which exact features are being used?”
According to Capterra, the most used features of CRM software are:
Email Marketing- 50%
Quote Management and Proposal Management- 46%
Marketing Automation Integration- 44%
Lead Scoring- 44%
Graphical representation of the this data shows this:
What do you figure out from this graph?
Yes, customers get the highest priority!
Managing contacts and meetings or appointments and reaching out to them is really important. If sales reps or customer service reps fail an appointment, customers (existing or prospective) end up frustrated, irate and disappointed. Such a situation can lead to negative sentiments, and then a snowball effect follows.
Dissatisfied customers can reach out to social media and express their disappointment. Potential of that negative emotion going viral on social media is extremely high. The resultant side effects can be many ranging from weakening brand image to a significant reduction of its brand value. Undoubtedly, substantial revenue loss for the company follows. So, Calendar Management is imperative.
Next in line is Email Marketing. Before you read why this is one of the most-used features, you need to take a look at this data from StrongView research:
· 60.70% of polled businesses report that they intend to spend on Email Marketing.
· 48.90% of those businesses intend to spend on Social Media.
· 40.20% look forward to invest in Mobile Marketing.
· 38.30% aim to invest in Search Marketing (SEO/PPC).
· 37.40% have plans to invest in Display Advertisement.
· 18% have Tradeshows and Events investment in the pipeline.
This data is for 2018! So, Email-Marketing is the star of 2018. But why?
StrongView says that for every 1 USD spent on Email Marketing, the ROI is USD 40! Now, that is something that you don’t want to miss out, do you?
Yes, Email Marketing is one of the best marketing strategies out there. It is one of the subtlest ways to reach out to the customers (provided you are not overdoing it). Most of today’s CRM software’s come integrated with Email Marketing solutions. No wonder, this marketing feature is one of the most sought-after and useful CRM features.
2.8. Improved Figures
Will you not want to have access to a technology that can increase all your company numbers while decreasing your costs?
How about increased sales, productivity and higher accuracy? There is perhaps no business in this world that will want those figures to go down.
Customer Relationship Management Software is one of those technologies that delivers! Here are some interesting data that you should know about:
· Companies experience 27% increase in customer retention rate when they use CRM.
· Businesses experience 41% jump in revenue per sales representative in a team when CRM is used.
· Forecast accuracy of businesses increases by 40% when companies use CRM.
· CRM usage leads to 34% increase in productivity.
· Sales figures improve by 29% using CRM.
2.9. Mobility of CRM
Like it or not, the world has gone mobile.
Digital marketers are more or less fed up with Google continuously throwing tantrums about ‘Mobile-First’ approach (pun intended).
The advent of smartphone technology has allowed people to stay online and connected to their mobile devices. They also use their mobile devices to purchase products online and communicate with their brands.
No wonder, businesses are forced to switch to mobile-first approach. This transition has also forced CRM software vendors to take the same path.
Yes, use of Mobile CRM has increased over the past few years.
Software Advice reported in 2014 that 45% of people using CRM software actually do so using their mobile devices. Here is a chart that gives a comparative study of CRM usage by platform:
Source: Software Advice
The above table can be quite perplexing because laptops lead and desktops lag behind. This, however, is not abnormal. Many sales reps work in fields, and they need to carry their laptops to access the CRM software they use.
The figures above show that mobile CRM usage increased with the mobile-first approach. The only problem here is that this data is from 2014. As of now, that is in 2018; no such research has come up. But with a big push towards mobility, it can be safely assumed that the percentage of people using smartphone or tablet to access CRM software has significantly increased.
I found another fascinating piece of wisdom from the research.
81% of polled people reported that they make use of multiple devices for accessing CRM. 29% said that they use all four devices while 20% use a combination of any three. Only 19% use just a single device and 32% use a combination of any two devices.
Visually, this data gives us many pointers which are remarkable indeed.
2.10. Mobile CRM Results
You may now ask:
“Okay great! Mobile CRM usage is increasing. Why is that?
Here is the answer to your question:
According to CRMNext, “Productivity of sales representatives see a jump of 15% when they can access their CRM software through the mobile devices!”
If you are holding the opinion that it is the only result you get (which by the way, is excellent for business), you are wrong! There is much more!
Innoppl Technologies reported something quite fascinating.
According to their report, only 22% of sales representatives in companies not investing in Mobile CRM managed to hit their sales quota.
On the contrary, 65% of sales reps in companies using Mobile CRM manage to hit their sales quota.
This data can also be represented visually:
But, why this stark difference?
It is plain and simple. Mobile devices allow the ‘anywhere, anytime’ approach. Desktops are stationary and can be accessed only from a specified location. Laptops cannot be pulled out anywhere anytime. This makes it difficult for sales reps in various areas like:
· Calendar management (for instance, calling a customer at a scheduled time).
· Email communications (responding to sales queries).
· Lead scoring (following up a lead).
· Quotation management (sending or editing quotations instantly on customer request).
Mobile devices like smartphones and tablets enable ease of use and convenience — even when sales reps are on the go.
2.11. Cloud vs On-Premise Deployment
The world has ushered into the era of cloud hosting. There are many reasons for this move. Some of the reasons include:
· Easy and instant scalability
· Nearly zero-downtime because of multiple copies of same application and data at a different location
· Low cost
CRM is a software. Software applications require necessary hardware to run.
Software like CRM requires a lot of processing power. On-premise installation of CRM software requires additional cost for hardware installation in addition to the value of the software itself. In addition to that, there has to be an active team of technicians to ensure that the hardware setup is running smoothly on a consistent basis.
Cloud-hosted CRM software eliminates this additional cost of hardware installation. There are dedicated hosting companies that allow running this software on their hardware setup at a fraction of a cost of on-premise hardware installation. This makes cloud-hosted CRM cheaper. Also, cloud hosting allows easy scalability at a moment’s notice.
Reduced cost allows more and more businesses (even if they are small) to adopt CRM at an increasing rate. This trend is growing. In 2008, 12% of CRM-using companies went for cloud hosting while 88% decided to opt for on-premise deployment.
Fast forward to 2017, and the ratio has changed to 87% using cloud-hosted CRM while 13% using on-premise installation. (Source).
Here is a visual representation of the data:
Source: Super Office research
3. 15 Random CRM Stats You Should Know
So far, you learned about some of the most important CRM stats in details. Let us now take a quick look into some random CRM stats that you might find not only interesting but also useful:
1. Trackvia.com says in a report that out of every 4 sales people, 3 firmly believe that they can quickly and effectively close high-end deals provided they have better technology in hand. As of date, CRM is that ‘better technology’ available to sales reps.
2. The same source also reported that out of 10 sales reps, nine say that they lose opportunities because of information overload. This problem is overcome with CRM that sorts, organizes and segregates date in a single window without overwhelming the sales reps. On top of that, centralized data allows easy access for everyone in the sales team. So, no data is ever misplaced.
3. According to GetBase.com, 30% of marketers fail to extract useful insights from customer data simply because they have disparate data sources. CRM overcomes this problem by collating all data from all sources into a single place.
4. GetBase also says that 91% of those companies that have 11+ employees actually opt for CRM. On the contrary, only 50% of those companies that have less than ten employees adopt a CRM software.
5. SoftwareAdvice.com says that small businesses and large businesses are the ones that are most satisfied with their CRM software. When small businesses were surveyed (with 100 or fewer employees), 37% were delighted, and 33% were somewhat satisfied. Among large businesses (500+ employees), 35% were extremely satisfied. In medium-sized companies, however, 26% said they were somewhat unsatisfied, and another 26% reported a high degree of dissatisfaction.
6. CSO Insights reported that:
a. 51% of CRM users found that synchronization of data was a significant issue while using CRM.
b. 72% of CRM users were happy to trade specific functionalities of CRM with ‘ease-of-use’.
c. 43% of CRM users use less than 50% of the features that come bundled with the CRM software they pay for.
7. Butler Group researched and found that only 50% of all the CRM features that a company pays for are put to use.
8. Forester Research says something disturbing! 43% of all CRM projects end up failing.
9. InsightSquared reported that of all the problems that were published about the implementation of CRM successfully, 22% of the were linked to user adoption.
10. Simple Systems researched to find out that 83% of the senior executives found their greatest challenge in making their staff adopt a CRM software.
11. Capterra — a software discovery platform — reported that 24% of businesses that purchase CRM software say that functionality is the primary factor for CRM purchase. 20% say ease of use is important, 14% say price, 9% say the reputation of CRM vendor, 8% focus on the support provided by the vendor, 8% say implementation training is an essential factor, 6% go by software popularity, and 6% go by reviews and recommendations.
12. Capterra also reported that 25% of the businesses say that social media monitoring is most desired feature while 24% desire that CRM software should have the ability of pulling in social profile of contacts. 19% desire CRM software to have the ability to track customer loyalty.
13. As per Capterra, Salesforce remains the most popular CRM solution with 33% of businesses using it. Microsoft Dynamics makes it to the second position with 22% of companies opting for it. Oracle takes up the third position with 11% businesses preferring Oracle.
14. According to VB Insights, 77% businesses out of 80% that opted for marketing automation reported an increased number of conversions.
15. According to Insightly, sales and marketing costs are reduced by an impressive 23% by using CRM.
Statistics represented in this article clearly show one thing — CRM software implementation is always beneficial.
However, there is one crucial thing.
The research showcased here is collated from various sources.
Such researches are dependent on random samples (in this case, people or businesses who were polled). These samples are really small, and hence, the accuracy of the data can be questionable. Nonetheless, that is how market research takes place.
A clear understanding of your business’ long-term goals, plans and strategies is the key to figuring out the right business tools, and software’s to use.
Scrutinize and evaluate each of those features to know how relevant they are to your business. Do comparative studies to find out which CRM covers all or at least, most of your business requirements.
In case you have already implemented CRM, and you don’t see desired results as shown in this article, there can be ’n’ number of reasons for that. You may have selected a wrong CRM software. You may not have implemented the software correctly. You may not have scaled the steep learning curve of the software. It is essential that you ask your software vendor to help you with implementation and also, provide a thorough usage training.
CRM software stores and process enormous amounts of data.
If processed correctly, it can develop high-quality business intelligence.
Such BI can help you to not only come up with better and more accurate business forecasts but also help you in devising better strategies for future.
So, choose wisely!