Between accelerated omnichannel marketing digitization, in part fueled by COVID, and increasingly fragmented customer journeys, customer relationships offer unquestionable value. Marketing trends continue to highlight that customer satisfaction is imperative, driving deep customer journey mapping, UI/UX optimizations, and more.
In this context, Customer Relationship Management (CRM) software has advanced rapidly itself, quickly becoming a marketing automation mainstay and an increasingly affordable, reliable asset. To explain this development and demonstrate its value, let us devote this article to exploring how SMB businesses can benefit from CRM software.
A brief introduction to CRM
If you’re reading this article, you may likely be in earlier exploration and research phases. To account for this, let us briefly define CRM and explore its continued prominence.
CRM is a series of practices that businesses use to manage interactions and relationships with existing and potential customers. The scope of these practices will typically span across all interaction touchpoints, from first contact to post-purchase queries and support. In turn, CRM software is software that’s specifically dedicated to these practices.
Key CRM features
To facilitate them, CRM software comes with a variety of relevant features. Those will differ from one solution to the next, but the core features most solutions will typically have are:
- A centralized database. The foundation of CRM, a consolidated customer database serves to both manage interactions and break down data silos among departments.
- Lead management features. Beyond simple customer logs, most CRM solutions will also offer lead management features to enhance marketing effectiveness.
- Automation features. Finally, most CRM solutions will offer sales and workflow automation features for more time efficiency.
Understandably, these features alone offer many ways in which SMB businesses can benefit from CRM software. However, as this software type expands, more specialized options abound as well.
CRM subtypes
Core features aside, CRM software will often vary in both feature selection and scope. There are a few reasons for this, such as market differentiation and enhanced efficiency in specific critical tasks. Regardless, specialized CRM solutions largely have 2 distinct subtype groups; function specialization and industry focus.
As regards the former, the main CRM subtypes are:
- Operational. Such solutions will primarily focus on sales and promotion automation using first-hand data to market back to customers.
- Analytical. Solutions of this subtype will typically specialize in predictive modeling and profitability analysis.
- Collaborative. Collaborative solutions will specialize in internal collaboration and communication.
As regards the latter, many CRM solutions now offer industry-specific features, catering to each industry’s work environment and needs. Examples include:
- Healthcare CRM. Sometimes dubbed Patient Relationship Management (PRM), healthcare CRM emphasizes the patient-physician relationship.
- Moving Industry CRM. Regarding relationship uniqueness, movers are no exception as the industry distinctly values unique customers.
- Restaurant CRM. Similarly, hospitality venues often need specialized functionalities like reservation system integrations.
It is this wealth of options that make CRM software such a lucrative choice across industries, along with increased affordability.
CRM’s rapid expansion
Finally, before delving into how SMB businesses can benefit from CRM software, let us briefly contextualize its rapid expansion.
Statista finds that CRM is the single largest software market globally, has seen a substantial revenue boom from 2015 onward. This is in no small part due to its notable functional evolution; from little more than an elaborate contact management asset, CRM’s scope and capabilities have both expanded massively within the past decade. In turn, market competition has made solutions increasingly affordable and thus much more accessible to small and medium-sized businesses. Combined with their benefits, it’s easy to see why SuperOffice reports that “91% of companies with more than 11 employees now use CRM software”.
How SMB businesses can benefit from CRM software
Within this context, then, let us now explore its exact benefits in action. For small and medium-sized businesses specifically, we may pinpoint 4 primary ones and note peripheral ones where relevant.
#1 Centralized data for enhanced marketing and sales
Arguably CRM’s primary benefit, its centralized database alone offers substantial marketing and sales efficiency benefits. These primarily derive from:
- Fewer data silos. A notable root cause of underperformance on both fronts lies in data silos between marketing and sales departments. CRM breaks them down and helps keep them coordinated, ensuring higher chances of successful outreach.
- Better lead nurturing. As regards marketing, marketers will typically engage in customer journey mapping, and nurture leads accordingly. CRM’s lead management features expedite this process and provide invaluable insights through analytics management.
- Marketing and sales automation. Finally, CRM features will often include automation functionalities, such as event trigger-based emails, automatic invoice generation, and more. When they don’t, they still often offer integrations with such third-party systems to avoid workflow disruptions.
Of course, such benefits have multiple implications across the board. Automatic data entry, where applicable, reduces the risk of human error; email automation expands operations beyond work hours; personalized marketing via lead nurturing enhances retention rates. Still, those primary benefits alone should warrant any new user’s attention.
#2 Better customer service
A second notable way small and medium-sized businesses can benefit from CRM software lies in better customer service. This derives in equal parts from user interaction records and operational efficiency, namely:
- Access to historical records. Having access to past interactions allows agents to personalize their communication. In addition, it may help identify recurring patterns and inform proactive measures, such as instructional material refinements.
- Query process automation. Similarly, many solutions will offer automated query responses; these don’t augment service per se but do serve as valuable acknowledgment. Then, agents may automate responses for simpler queries that decongest their workflow.
- Streamlined collaboration. Finally, query processing allows for more streamlined collaboration. Automatic notifications can alert appropriate agents for swifter responses, for example, and expedite query delegation.
This benefit, too, expands to other fronts. Customer-wise, swift and efficient customer service enhances the customer experience (CX), and in turn, customer satisfaction and retention. This alone may encourage more customers to leave positive reviews, serving as valuable social proof for future ones. Company-wise, too, enhanced productivity improves employee satisfaction and the work environment in turn.
#3 Higher customer retention rates
Having alluded to this manifold, CRM effectively increases customer retention rates. It boosts this invaluable metric, whose significance we’ll outline just below, through such means as:
- Personalization through automation. All of the above functionalities culminate into much deeper interaction personalization. In turn, customers have a much more pleasant CX and feel more valued, increasing the likelihood that they remain customers.
- More accurate marketing (re)targeting. Similarly, for customers new and old, CRM facilitates more accurate targeting. Presenting relevant offers and offering meaningful outreach also enhances CX and, by extension, retention.
- Old lead re-engagement. Finally, should customers eventually leave, CRM insights can fuel more accurate re-engagement avenues. Through them, businesses may identify pain points and address them, converting old leads anew.
Small businesses can benefit from CRM software substantially in this regard, as the value of customer retention cannot be overstated. AnnexCloud finds that it massively boosts profits, and research by LinkedIn, SalesForce, and others corroborates this. Acquiring new customers can cost up to 7 times as much as retaining existing ones, considerably straining marketing budgets. Finally, recurring customers spend more per order and are more likely to promote a business to their peers.
#4 More productivity
Finally, between automation and enhanced collaboration, CRM offers to enhance productivity on the whole. Consider such examples as:
- Improved informational organization. Without data silos in place, departments can collaborate more efficiently and reduce errors and time waste. Simply timing sales outreach with proper lead nurturing is a primary example of this in action.
- Better time management. Similarly, automation can drastically decongest workflows and improve time management. Automating tasks that require no creative oversight, such as template email responses, frees departments to focus on meaningful, productive activities.
- Improved reporting. Finally, through its reporting functions, CRM can help monitor both campaign and staff performance more accurately. In turn, managers may swiftly take appropriate actions as needed to ensure continued productivity.
Here, however, we may also note a CRM challenge that may hamper productivity; user adoption. Nomalys notes this challenge, and research by IBM, SalesForce, and others agrees that user adoption rates remain low across industries. Thus, especially for new users, opting for an intuitive, user-friendly solution with ample training material should warrant your consideration.
Conclusion
In summary, SMB businesses can benefit from CRM software in multiple ways. CRM solutions offer a centralized customer database that breaks down data silos and improves internal collaboration. Building on this core functionality, their analytical, marketing, and automation features enhance customer service, retention rates, and staff productivity.
However, CRM solutions differ significantly as regards their scope, focus, and feature selection, and in turn, their final price tag. Coupled with user-friendliness, which greatly influences adoption rates, your choice of CRM should be well-informed and backed by thorough research. Albeit brief and cursory, this article hopefully helped make this choice just a bit easier.