Every small company on the growth path reaches an inflection point, where growth is sustained by the stability of its internal processes and the ability to handle more constantly. A customer relationship management software (CRM) solution provides stability and scalability to a young company’s internal processes. It enables the company to do more by using its resources efficiently.
In short, a CRM is a powerful tool that enables your small business to gather data and convert it into actionable business insights, enabling you to make informed decisions.
So, integrating a CRM into your small business workflow is the first step in moving your company from a successful entrepreneurial setup to a professionally run company. Let’s look at how a CRM can help your small business grow.
1. Accuracy of sales forecasts
A common issue many small businesses face is that the sales forecast provided by marketing is often based on “best-case scenarios,” and there’s no way to verify their accuracy. What follows are grand expansion plans. Soon, the projected growth is highly leveraged, and the company is saddled with a high finance cost even before the ‘projected’ growth kicks in.
With a CRM, you can access hard data on what happened last year. So, when marketing comes in with a 40% growth plan, you can reference last year's 5% growth and the sales strategies that worked. In this growth phase, access to financing is usually tight. Hence, it’s critical to use those funds efficiently by having an accurate and transparent sales forecast.
Let’s say your sales team has 1,000 leads in their sales pipeline, and they work equally hard on converting each lead. In the end, they manage to convert 10 for a conversion rate of 1%. What if the insights from your CRM informed the sales team that only 600 leads have a purchase intent while the other 400 just have curiosity but are unlikely to purchase?
Now your team just concentrates on the 600 leads, every lead gets more attention in the sales process, and you manage to convert 30. By discarding the 400 and focusing on the relevant 600, your conversion rate is now 5%. Remember that point earlier about a CRM enabling you to do more, hence, helping you become more productive?
2. Cut your sales cost
Growth is about constantly acquiring new customers and retaining the ones you have acquired. Ask any salesperson, and they will tell you that it’s easier and cheaper to retain your customers than acquire new ones. A CRM allows you to do both while efficiently managing your customer base without making phone calls.
As a business owner, your growth strategy becomes maximizing sales and upselling with existing customers. You want to lower acquisition costs while raising the conversion of new customers. Marketing automation is another feature built into your CRM. No longer does your sales team need to make phone calls to the leads. Contact management is simplified.
The contact management function also enables you to generate insights into your customers and leads. That enables you to maximize sales from your existing customers while lowering the acquisition cost of new customers. Remember the bit about focusing on the 600 leads; you’re spending more time on each lead but lowering your overall acquisition cost. Here are some ways to leverage CRM data to reduce the cost of sales:
- Discover cross-sells and upsell opportunities: The CRM data identifies customers more likely to purchase additional products from your company. Let’s say you run a company that provides a SaaS product with a tiered pricing structure. You can reach out to the customers in the cheapest tier and incentivize them to move up on the tier.
- Reduce closure time for new leads: Analyze your CRM data to identify existing choke points in your sales process. You can eliminate these bottlenecks to cut closure time and cost while raising the overall conversion rate.
- Upgrade sales skills: Consider your CRM as a repository of customer information to help pinpoint their needs and potential sales opportunities. Keeping in touch with your customers enables you to develop products that address their needs and roll out marketing campaigns that address their questions.
Let’s modify that maxim of doing more to the ability to do more at a lower cost per transaction.
3. Identify the right leads
You want your sales team to spend time and resources on leads that are likely to convert. CRM analytics will help improve the conversion in your sales funnels at a lower cost. The analytics data enables you to go through your lead data with a fine-tooth comb to cull the leads that are likely to convert.
CRM data enables you to segment your leads and customers by demographic and behavioral traits like age, gender, and spending habits. Now, use the CRM analytical tools to draw links between certain traits or qualities.
For instance, as shown below, you can use the analytics data to segment your leads into five segments. Each segment would have its unique conversion strategy.
An online business selling beauty products can use email marketing to target relevant customers. Newsletters for anti-aging creams and lotions can be targeted at customers over 40, while the younger demographic can be addressed with sports supplements.
4. Improve your email marketing outcomes
CRM for small businesses allows email integration into the workflow and is an excellent channel to reach a large and segmented audience. The CRM also enables email tracking to check how your audience engages with your campaigns.
It doesn’t matter if you have ten customers or 10,000. Your CRM software will enable you to recognize unique patterns across your customer base, enabling you to target each segment with a relevant message based on their personal information and transaction history. For example, you may offer a discount for one segment, while you could try to upsell for another.
Email tracking of engaging and personalized campaigns increases the probability of repeat business from existing customers and a higher conversion within your qualified leads.
5. Make marketing more efficient
Ask your sales reps for their daily activity and timesheet, and compare it with the infographic below. Chances are there will be a high degree of correlation. The sales resources will spend the bulk of their time on tasks with little to no bearing on generating actual sales.
These activities include entering customer information into your database, generating quotes, and researching prospects. Hence, they have less time for revenue-generating tasks like prioritizing leads and meeting customers in person or virtually. The CRM enables you to handle deal management strategies, enabling your sales review process.
To increase team productivity, you need to automate low-value tasks like registering customers and generating quotes for your customers. That will enable your sales staff to use their time more productively and improve your conversion rate.
According to the Harvard Business Review, more than half of high-performing salespeople see themselves as power users of their company's CRM technology. Train your salespeople on using your CRM to give them a significant advantage over your competitors. Most CRMs will give you access to advanced features and allow unlimited users from as low as one user per month at a nominal cost as your business grows.
6. Enhance your customer experience
Merely satisfying your customers with your product or service is no longer enough. You must delight them at every touchpoint and build a positive customer experience. Customers now look at their entire brand experience, from the sign-up to purchase and conversion, and at customer interactions with the support team.
To stay ahead of the competition, you must delight customers at every opportunity.
Use customer data from your CRM for small businesses to cull insights into your customer behavior. For instance, your CRM will tell you how often a customer has reached out to resolve an issue. You can then turn this into an opportunity and craft a service strategy focused on the issue.
Besides, most CRM tools have third-party integrations with business automation tools like Zapier, Google Ads, and WordStream.
CRM for small businesses provides insights into your customers and your performance while reducing the complexity of your processes. With data generated from business CRMs, you can optimize the outcomes of your business processes, from forecasting to customer service.
Your product marketing team will benefit from data analysis to determine your customer's needs, enabling you to create marketing campaigns that showcase your product’s features. CRM data enables your CS team to identify recurring customer concerns, allowing them to update with workflow processes that revolve around resolving these issues.
A CRM for small businesses is a vast source of actionable business intelligence. Once you learn how to read and analyze CRM data, the growth potential for your business will increase exponentially. Good luck!
Martin Gessner is the Founder of Focus on Force. He has spent over 10 years working in various Salesforce roles, including business analyst, project manager, consultant, and solutions architect. Along the way, he has earned twelve certifications, published "The Salesforce Career Playbook", and helps Salesforce professionals learn more about Salesforce, develop their career and prepare for certifications.