Acquiring new customers is cool and perhaps a little too exciting for most entrepreneurs, particularly startups, that they often put customer retention on the back burner. Keeping existing customers is far cheaper than acquiring new ones, and the math to prove that doesn’t even involve rocket science.
As an Inc.com article by Karl Stark and Bill Stewart asserts: “As the management team’s growth expectations increase, it gets increasingly harder to acquire more customers.” This equates to rising acquisition costs, plus dwindling customer quality in terms of stickiness.
So what a small business should do?
Develop a customer relationship management (CRM) strategy to improve client satisfaction and boost retention rates.
Easier said than done, but the good news is that it has been done, and you don’t need to reinvent the wheel. To maintain good customer relations, a reliable system for calendaring, managing emails, to-do lists, and contacts and accounts is an essential, hence the continued rise in CRM software implementation.
What is CRM software?
CRM software is the technology that enables companies to improve their interactions with clients, prospects, contractors, and business associates. It contributes to the operational efficiency and long-term success of a business, as it manages customers and their information through integration of data from diverse sources, such as the billing department, tech support, sales, and others. Such data includes customer purchases, complaints, requests for assistance, and the like.
This eases the flow of collaboration between the different parts of the organization (e.g., back office and front office), making way for faster response times and improved customer experience.
As per TechTarget, common CRM software features include:
- Marketing automation. CRM tools with this capability can automate routine tasks, such as sending how-to guides to new prospects through social media or email, or thank you/welcome messages through snail mail. The goal is to advance them through the sales lifecycle.
- Sales force automation. This feature ensures there is no duplication of effort between sales professionals and customers.
- Contact center automation Aimed at lessening the time and effort needed to service customer queries and requests, this functionality uses various tools, such as an interactive voice response (IVR) system that automatically routes calls to available agents in the right department, a recording tool for future call audits – tools to cut down handling times and streamline client service processes, essentially.
- Location-based services/geo-location technology. Sometimes integrated with GPS technology, this feature helps sales representatives maximize their business trips by scheduling visits to clients in the same vicinity, or find sales prospects in a particular location.
Is CRM important for small businesses?
The short answer? Yes.
The business landscape is changing dramatically. Customers want faster transaction times, and sales prospects are more discerning than ever. To successfully play this game, you have to have a CRM system that enables you to correspond with customers, prospects, vendors, partners, and employees within an expected time window.
Through a central hub where you can view and manage every transaction or interaction, you have access to details you won’t remember on your own, share documents as needed, provide the right level of information, and save valuable time otherwise spent aggregating data scattered across files, folders and email threads.
A small business looking to attract, keep and grow its clientele can benefit from a CRM solution with ready-made tools for messaging, contact information management, social media, and advanced analytics.
Using people, processes and technology for a clearer perspective into customer and prospect behavior enables you to improve customer service, recognize cross-sell and up-sell opportunities as they arise, develop new business marketing strategies, enhance customer profiling and targeting, reduce expenses, and carry out informed decisions throughout the organization.
CRM software allows your business, no matter how small, comprehensive insight into your client base and sales pipeline for long-term profitability.
How to make CRM software work for your small business?
There is no silver bullet to ascertain CRM software implementation success for small businesses, but below are some vital pointers to remember:
- Change management. Change is a constant for growing businesses, but change is something people are usually not too keen about, particularly if the process change is set to interfere with the way they do their jobs. This being the norm rather than an exception, ensure you have change management strategies in place, as staff resistance is part and parcel of new software adoption.
- Employee buy-in. To convince your people that the change is worth it, the benefits of the CRM tool must be highlighted, and a core group of early adopters must attest to those benefits through tangible results. Keep in mind, a CRM software deployment can only be successful if adopted and supported by the organization as a whole, regardless of rank and pay grade.
- Alignment with organizational objectives. Your CRM strategy must be aligned with your overall business goals, and your chosen CRM software must support that.
- Start small. To ensure you’re getting the perfect CRM software fit, make test implementations in one or two divisions prior to a companywide rollout. Also, maintain up-to-date reports and evaluations so that necessary adjustments can be made whenever required.
New software adoption requires a change in attitude and mindset, more so for small businesses that think CRM applications require considerable monetary investment, a dedicated IT team to maintain the system, and so on.
There are enterprise-grade CRM solutions that are lightweight and specifically built for smaller organizations, such as Nimble, SageCRM, Insightly, Zoho CRM, and Base CRM, among others. Most offer free trials, if not free basic plans, so you can test drive the applications and see for yourself how they can possibly improve your organization’s relationship with your customers.