CRM Explained for Small Business
So what is CRM? An acronym thats regularly used, for a small business owner out of the loop, it often means feeling lost at sea when the concept arises in conversation.
So how do we go about explaining CRM for small business? Lets start with the basics: Customer Relationship Management is a business strategy supported by technology that organizes, automates, and synchronizes a company’s sales, marketing, and customer service efforts by rolling them all together. Regardless of the size of the business or the kind of product or service offered, sales, customer service, and marketing teams have one thing in common: their focus on customers. CRM represents a company-wide effort to create and manage a customer base and align the sales and marketing teams to find, maintain, and retain customers.
Sales departments and marketing departments have different reward structures in place, so they may have a different ideas as to what makes a good customer. Sales teams are generally concerned with immediate transaction revenue and the commissions based on it. Marketing teams are recognized for the quantity of leads generated and more long-term goals. Customer service comes into play when there is some breakdown in the system. Large companies saw that an efficient system that aligned sales, marketing, and customer service helped the entire company focus on both long-term and short-term goals together for the overall businesses success.
The Early Days
Although CRM was relatively unknown pre-1990, a number of technologies did CRM-like things such as contact management systems, customer databases and call centres. CRM was born in part due to the technology-push, as large companies foresaw the need for this type of integration between their teams as well as the means to actually deliver what was needed.
Until recently, CRM was something only large companies did. Big companies could afford the technology and the software. The larger organizations also knew the value of using CRM to increase customer satisfaction, retain customers, and reduce operational costs. Companies selling CRM technology focused on the larger accounts, as these were the most profitable. Small businesses simply
weren’t interested because they either didn’t have the money to spend or because of the complexity of the software tools.
The Rise of Small Business
Recently, thanks to the introduction of a number of affordable web-based, easy to use and easy to customize CRM software programs, smaller businesses, even down to the “mom-and-pop” size, have recognized the value in CRM. Small businesses may actually have more to gain from the use of CRM than larger companies as it automates and streamlines processes, imposse a new discipline on the sales force, gives management visibility into what is going on, and provides more key interaction with leads. It
also provides management with tools to make better quality decisions, which is imperative for all small to medium enterprises.
There are many CRM software programs designed with the small business owner in mind. Some of these include Nimble, Landslide, Sproutsocial, Highrisehg, SalesNexus, and PipeJump to name a few. These are all definitely worth exploring if you manage a growing client base in your business.
Point of Note
A small business using CRM should anticipate costs not only in purchase but also in employee training. Unless employees understand the potential of CRM, they may underestimate the need for the system and not perceive the benefit of all sales, marketing, and customer service team members to have access to the same customer data. CRM provides management decision-making tools and decision support that are vital to small business profitability. Even a small, one-person business or office will benefit from the integrated functions of a CRM system.
Do you use CRM for your business? I would love to hear stories of how small businesses have successfully integrated CRM into their operations.
Edward has a depth of experience within the world of marketing at both large and small companies having worked for Microsoft all the way through to currently working for 99designs, and has also spoken at several Australian Universities around online marketing and the role it can play in our current global market. In his spare time outside of his laptop, you'll find him training for a triathlon, or daydreaming about ways he could chase Winter around the globe with his snowboard.