According to the US Small Business Administration (SBA), over 50% of small businesses fail in the first five years and about 20% in the first year. Scary, right? The secret to succeeding as a business, isn’t a secret at all. According to CB Insights’ analysis of 101 failed startups, around 14% of businesses fail because they ignore their customers. That’s because businesses are so keen on increasing sales and acquiring new customers that they often ignore the value of existing customers. It doesn’t matter which study you believe or what industry you’re in, acquiring a customer is between five to 25 times costlier than retaining one. Add to that the findings of a Bain and Company report that shows increasing customer retention rates by just 5% can increase profits by 25-95%.
What does this mean to a small business owner? Simply put, it means that customer relationship management is of utmost importance for you to have a healthy business that not only survives, but thrives.
65% of businesses adopt a CRM within their first five years. (source: Capterra)
A Customer Relationship Management software, is exactly what the name tells you. This tool enables you to maintain a relationship with your customers by capturing signals of unhappy customers and targeting specific actions to stop customers from leaving, while rewarding your most profitable customers to further increase their loyalty and much more. To break this down, one can say that a CRM –
1.Showcases all customer data in one place, in an easy to access way
2.Allows you to act on that data by making calls, sending emails, scheduling appointments and manage your sales pipeline
3.Automates day-to-day tasks like sending follow up emails, creating tasks and appointments, updating a lead’s status, etc.
4.Shows you relevant reports and data so you can derive insights and strategically grow
Reason 1 – Organize all your data in one place
Do you remember the days when you maintained a diary to manage all your telephone numbers? You even knew some of the numbers at your fingertips. Today, it is hard to imagine a life without your mobile phonebook. As a small business owner, contact management is perhaps your number one problem area. You have contacts on your phone, in a spreadsheet, your inbox and multiple business cards in your wallet. A CRM for small business organizes all your contact information in one place making it easily accessible and error-free. It also provides you multiple options through which you can capture leads into the system, and functionalities to reduce manual data entry.
Reason 2 – Enhances customer satisfaction
Customer service is the most important differentiator in today’s world. Globally, 54% of all consumers say that they have higher customer service expectations than they did just one year ago. This percentage jumps to 66% for consumers aged from 18 to 34 years old. While certain metrics like the Net Promoter Score (NPS), Customer Satisfaction Score (CSAT) can tell you where you stand in terms of customer satisfaction and create certain tangible goals for your small business, the ‘how’ or ‘the way to get there’, is shown by the right CRM software. Having easy access to all past communication, tracking the customer through the sales pipeline, supporting them during the post sale experience by having all this information in one place – all these small steps go a long way in customer happiness.
Reason 3 – Automates your business process
“If you do something more than three times a day, find a way to automate the process.”
Our world is moving towards automation and your business must too. As a small business owner, you are constantly multitasking. The best CRM for small business is designed to automate most of the day-to-day tasks allowing your sales reps to focus on building relationships and closing more deals. Whatever your business and sales process, it allows you to automate your workflow and replaces manual tasks like sending out a welcome email soon after signup, sending follow up emails, or create follow up tasks to ensure you stay ahead of your deals. Additionally, you can create workflows to move a deal across your sales pipeline and qualify leads, automatically.
Reason 4 – Improves sales productivity
According to CSO Insights, salespeople spend just 35.9% of their time selling, while the rest of the week is consumed by administrative tasks. A small business CRM automates the outreach process using sales cadences — email sequences, follow up tasks, call reminders —, allowing sales reps to do what they do best: selling. In fact, a good CRM for small business includes auto lead capture, enrichment, assignment, and scoring. A CRM organizes leads, contact information, sales opportunities, interactions and customer service in one central place. This saves a lot of time for sales teams who otherwise switch between multiple applications to get work done.
Reason 5 – Increases customer retention
A CRM system should help you get a better view of customers who are the most profitable and enable you to focus on those relationships. These metrics also help organizations identify those who would become more profitable if targeted properly. Other important ways how a CRM for small business can help retain customers is by allowing users to see the performance of marketing campaigns, manage customer channels and identify the root causes behind customer attrition and address those. It can also help you upsell or pitch the right product to customers based on their current needs.
Reason 6 – Enhances sales strategy
Which sales channels are most effective? Who are your best salespeople? What are some steps you can take to close deals faster? What is your win/loss ratio? Data gathered through CRM software can help monitor sales quotas, identify deals that have not yet closed and create strategies to shorten sales cycles. Both real-time data and that collected over the past few months or years can help predict trends and plan accordingly. A quick look at revenue from across products or verticals can help you decide what you need to focus on in the next quarter.
Reason 7 – Improves team collaboration
All businesses aspire to run as well-oiled machines. This means that your processes are set in stone, every piece of relevant information is easily accessible to the concerned individual or team and the baton of information is passed on from one team to the next in a systematic and transparent fashion. The best CRM for small business showcases all communication in one place, making it accessible to multiple teams – sales, marketing, customer service so that at no point is the ball dropped. The contact information moves through the sales funnel in a smooth and harmonious manner. Every department can tag a team to get the right information to the right individual. With this new found ease, teams can seamlessly work together to improve the bottom line.
Reason 8 – Analyzes metrics and KPIs
When you’re a growing business, you need to plug in every hole and know exactly where your strengths lie. These immediate action points are provided to you through proper reports and dashboards. A small business CRM gives you access to reports and sales metrics at your fingertips, helping you understand the overall performance of your sales teams, regions and territories that perform better than others, channels that bring in the most revenue etc.
Reports can help you understand win/loss ratio of deals, identify the stage where most deals are lost and what went wrong with the unclosed deals. This valuable information can help managers identify individuals within their team who are struggling and help find better ways to improve their performance, increasing productivity and efficiency.
Reason 9 – Data is on the cloud and on mobile
A CRM that is on the cloud and accessible on mobile increases sales productivity and shortens the sales cycle. When using a CRM on your desktop, you have to wait to return to the office after a meeting to add notes and reminders. This leaves a lot of details to chance – what if you forget what was discussed with the client? A mobile CRM allows you to update data real-time, perhaps even review the information on the spot with the customer. It also makes your field sales team’s life easy, by providing them with access to customer information on-the-go. Which means, they can quickly respond to queries, improving your team’s effectiveness and increasing cross-selling and up-selling opportunities.
Reason 10 – Integrates with other business solutions
The ultimate aim of CRM is to enable you to develop and maintain a relationship with your customers. Without integration, it would be impossible to track 360-degree customer data and communication across the complete customer journey. For this data to be the lifeblood of this tool, it needs to be flexible and integrate with other applications to provide that holistic view of the customer. The best CRM software for small business easily work with tools and plugins for marketing automation, invoicing, sales and even customer support, so that all these functions can exist within the same framework.
Whether you’re in banking, technology, real estate, your customers want to feel special. They want to be pursued and not pestered, they want to get the right value for their purchases and want to feel a personal connection with the company they’re buying from. Knowledge is power and having precious data handy can change the course of your business, giving you clear actionable insights to work with. From strategy to efficient execution, a robust CRM can help you overcome all the hurdles of running a small business. The average ROI for CRM is $8.71 for every dollar spent. That is a 771% difference. So are you ready to try a CRM for your small business?