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When do you need a CRM system?

Posted On: February 14, 2015

What should come first: a certain number of customers or leads, or a customer relationship management (CRM) system?

It’s understandable to think the first option might make the most sense. What’s the point of paying for CRM technology before you even have customers? Spreadsheets would seem to suffice until a business breaks a certain threshold.

But that’s not necessarily true. Consider the potential confusion that can occur from using spreadsheets for tasks they’re not designed to handle. This could have a negative impact on your business. Using spreadsheets to handle CRM for the time being could actually cost you customers — and you might not even know it.

CRM consultants claim that it’s never too soon to implement a real CRM process. Granted, that’s what you would expect a CRM consultant to say. But we believe there’s some truth to that notion.

Providers of customer relationship management solutions have tailored their offerings for the small business market, providing software-as-a-service (SaaS) options, integration with other technologies, and an understanding of what small businesses want from their customer relationships.

Yes, CRM once was considered only appropriate for large enterprises. Also, there were concerns at times that the technology was too costly, too time consuming and too complex to be successful. But over the last few years, SaaS CRM providers such as Salesforce.com, InfusionSoft, and NetSuite have changed all that. Even small businesses may find these tools worthwhile.

An effective CRM application provides an organized, comprehensive view of a company’s customers and prospects — and employees’ interactions with them. SaaS solutions for CRM usually require a lower upfront investment, as no software needs to be purchased and installed.

Upgrades can be done over the Internet, rather than by loading disks onto each computer. And employees can access the program with just an Internet connection. Licensed solutions typically start at several hundred dollars per user license, and go up from there.

Some systems also charge a maintenance fee of about 20 percent of the initial cost. But among the benefits of licensed CRM include that the application runs on your computers, and data is stored in your file server, instead of offsite.

Some benefits of CRM

Understand which customers produce the most profit: By analyzing buying behaviors and other customer data through CRM, your business can gain a better understanding of who your best customers are. You can differentiate between the customers who produce the highest profit margins and those who simply bring in the most revenue.

Analyze buying patterns: More understanding of customer buying patterns can help you spot potential high-value customers so that you can make the most of your sales opportunities with those customers.

Maximize per-customer profits: Data gleaned from CRM can help you lower the cost of selling to certain customers and help you increase profits from those customer interactions.

Features to look for

Application Programming Interface (API): This lets the CRM solution link with other systems, eliminating the need to enter information multiple times.

Multiple contact information types: Users should be able to organize and access information by a person’s name and company. That makes it possible to view all the interactions that have occurred with a particular person, as well as with multiple individuals within a single company.

Dashboards: The system should provide a summary view of the sales opportunities underway across a company’s customer base and the employees working on them. This ensures that promising opportunities are less likely to fall through the cracks.

Information entry and access: Employees should be able to enter and access information from anywhere within the system. For example, if they’ve talked with a client on the phone, they should be able to enter details of the call under the person’s name. Once in the system, that information should be accessible through both the individual and company name.

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