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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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