Small Business Benefits of Using a Customer Relationship Management (CRM) Tool

Wouldn’t it be great to have one tool that can host your customer database, act as a sales funnel for your website, send follow-up customer emails, and aid in structured marketing campaigns for your business? There is good news: This tool already exists! 

You can do all of the above using a platform called a CRM. This stands for customer relationship management. 

A CRM can help companies manage their interactions with customers at all points during the customer life cycle. It helps your business keep them engaged, from discovery to education, purchase, and post-purchase. In short, it helps your small business provide a great customer experience. 

If you’re looking for ways to improve your customer experience strategy, keep reading to learn more about the benefits of using a CRM.

What Is a CRM?

CRM software compiles customer information in one place. Having this data handy helps your employees interact with customers, anticipate their needs, record customer updates, and track sales performance goals.

The goal of customer relationship management is to improve business relationships to ultimately grow your business. A customer relationship management tool provides a good customer experience, helps you increase customer loyalty, and assists with nurturing new and repeat buyers of your product or service. 

A CRM system works by gathering and centralizing information from customer interactions, whether via your website, by phone, through email, or through a live chat. That data helps companies stay connected to their customers and streamline processes throughout the customer journey. This includes providing content and a touchpoint to future additional services throughout the relationship.

Who Is a CRM For?

There is a CRM system available for every business type. Leveraging marketing automation, a CRM helps organize customer information and stay connected to customers at different milestones before, during, and after your sales or purchase process. 

If you’re running a product-based business, you will want to pick a CRM that’s specific to product sales. Likewise, service-based businesses should choose one specific to services. There are also CRMs specifically tailored for different industries, so you’ll want to do your research upfront. 

Having a CRM system gives your employees a better way to manage the external interactions and relationships that drive your business’s success. This includes employees in sales, customer service, business development, recruiting, marketing, and many of the other roles in your company.

CRM systems allow employees from all these departments to see the same information about your customers. This information includes how customers have interacted with your company, the milestones in their journey, what they purchased, when they last bought from you, how much they’ve spent, and so on. 

These systems also store your customers’ contact information, which helps you identify sales opportunities and manage marketing campaigns more effectively. This data will be accessible to anyone else in your company when they need it.

The right CRM can help companies of all sizes drive growth, but it can be especially beneficial to a small business that must find a way to do more with a much lower budget.

How Does a CRM Add Value to Your Small Business?

Implementing a CRM system for your small business will offer a lot of value. Below are some of the benefits that a CRM solution can provide your business:

Improved customer service

With a CRM system, you can address issues more quickly and effectively, leading to better customer support. That’s because customers won’t have to repeat their stories over and over each time they contact your company.

An increase in sales

You can use a CRM tool to improve and streamline the sales process, build a sales pipeline, automate tasks, and analyze sales data. All of this leads to more sales. A CRM allows you to have all your customer-facing voice, chat, and email touchpoints accessible in one place and deliver the right message on the right channel at the right time in the sales life cycle.

More customer retention

CRM tools can show you when customer churn happens, which is when customers stop using your company’s product or service, or stop subscribing to it. This allows you to analyze, identify, and address those pain points.

Analytics you can use

CRM tools make your data accessible, easy to understand, and relevant to your business needs. All your sales data, finance data, and marketing data flow into the CRM to become metrics that help you and your team make sense of everything. You can use all this information to your business’s benefit to improve customer acquisition and retention.

Better efficiency in your business

Having all your day-to-day business functions in one place creates a better workflow, improves project management, and enhances team member collaboration. CRM tools also automate tasks to do the menial, repetitive work for you.

Improved knowledge sharing and transparency

Collaborative CRM tools help you build a knowledge base, find your best-practice workflows, and facilitate seamless communication among your employees. A CRM platform allows all the people in your organization to gain visibility on your business processes, which fosters better collaboration among team members from different areas of your business. 

Three Types of CRM Systems

CRM solutions can be categorized into three primary types: collaborative, operational, and analytical. A description of each of these types is below:

1. Collaborative CRMs

Collaborative CRMs, which are also referred to as strategic CRMs, centralize customer data where your marketing, sales, and service professionals can all access it. 

This type of CRM provides visibility into all customer communications, purchase history, service requests, notes, and other details. That way customer support reps are better prepared to solve your customers’ problems. Some collaborative CRMs can also act on this information automatically to expedite customer service.

As this data is shared across the organization, each department can act on it as needed. For example, at a car dealership, the service department can track sales data such as when a vehicle was sold. Then they can use that data to automatically contact the customer to schedule their routine service appointments.

Collaborative CRMs enable teams to share tasks, activities, and responsibilities related to customer interactions. This ensures that everyone is on the same page and aware of their roles in providing a seamless customer experience.

2. Operational CRMs

For sales and marketing, operational CRMs automate processes related to identifying prospects, keeping tabs on customer interactions, forecasting sales, evaluating the performance of marketing campaigns, and so on.

This way, your sales team can spend more time cultivating relationships with customers. Meanwhile, your marketing team can target specific audiences with personalized messaging.

Operational CRMs often come with task and calendar management features to help sales and support teams organize their schedules and activities. This ensures that your employees will not overlook important tasks and customer follow-ups.

This type of CRM may also have order processing functionality to manage orders, track shipments, and handle refunds and returns.

3. Analytical CRMs

Analytical CRMs are a tool for mining and analyzing customer data to glean insights that allow you to make informed business decisions. This is a powerful way for businesses to better understand their customer and ultimately drive customer loyalty.

This type of CRM collects data from various sources, such as customer interactions, purchase history, website visits, social media interactions, and more. It can analyze this data to segment customers based on their characteristics, such as behavior, preferences, or buying patterns. This information allows you to tailor your marketing efforts more effectively.

Analytical CRMs may also use predictive modeling to forecast future customer behavior and identify potential opportunities or risks for your business.

Small Business CRM Software Options

Many CRM services offer free plans hoping that you’ll eventually upgrade to a paid plan.

Free CRM systems let you try out the platform to see if it provides value that makes sense for your needs. This helps if you’re a small business or a startup on a small budget. Since it’s free, there’s really nothing to lose. 

We recommend that you explore CRM platforms to see which features align best with your company’s CRM goals. Below is a list of some CRM providers that provide tools for product- and service-based businesses:

• Freshworks. This tool features basic contact and deal management functionality. But it remains competitive with in-built calling, webform lead generation, and allowing unlimited users.
• Zoho CRM. Zoho features workflow automation and can work with Zoho Campaigns to send up to 12,000 bulk emails a month.
• HubSpot CRM. This tool offers contact storage of up to 1 million records, custom data fields, website marketing, and 2,000 bulk emails a month.
• Insightly. This has advanced project management tools, including post-deal tracking, as well as customized reporting and bulk email marketing. 
• Agile CRM. Agile includes customizable data fields, one workflow automation, and bulk email marketing.

Finding the best CRM solution for your business will require some comparison shopping. But whichever CRM product you choose, your business will quickly see its advantages. In fact, you may wonder how your company operated without a customer relationship management tool in place!

Why CRMs Are a Great Tool for Small Businesses

Customer relationship management may seem like a tool for large businesses, and it is.

But it can also help a small business foster some of the most important relationships it needs for growth—those with its potential customers. Automated lead nurturing features help ensure that no leads fall through the cracks, increasing the likelihood of converting those people into paying customers.

CRM also helps your small business use data to drive decision-making, helping your business stay agile and adapt to its customers’ needs. It can also keep you running efficiently, helping you make the most of a limited budget.

Remember, you can get started with a basic CRM for free and scale up as your business needs grow.

Do You Need More Assistance?

Our 20 regional Small Business Development Centers assist small businesses throughout Oregon with advising, classes, and access to the resources they need to be successful. Each Center has the backing of our statewide support network. This helps small businesses access the proper assistance wherever they are in Oregon.

If you have any questions, connect with your local SBDC at OregonSBDC.org.