A question I often get asked by business owners is, do I really need a CRM system? It’s perceived as something for the big guys and if you’re a small business owner yet another piece of tech that adds to costs and absorbs more time.
Growing revenue and increasing profit are two of the biggest business challenges small business owners have. And the key driver of growth is improving the customer experience and retention of your most valued customers
So change it around. It’s a bit like asking why my customers matter!
The reality is that, without our customers we don’t have a business, and technology offers us ways that we can compete more effectively on the critical dimension of customer relationships
In today’s dynamic & competitive environment your biggest competitive advantage comes from how well you know your customers…and your ability to turn those insights & knowledge into products, services & experiences that customers want to buy. You want strong, long term relationships with people. You want relationships based on an emotional connection. You want relationships so powerful your customers become active advocates of your business
That’s relationship capital. It’s an asset – and for many it’s under performing at the moment.
The principles of CRM have been around for hundreds of years – the newsagent who writes everyone’s order in a manual, the baker who keeps a record of peoples birthdays in a book & manually emails around that time to suggest a cake, the real estate agent who keeps index cards on their customers with all the important bits of personal info that help him build relationships or the Personal Trainer who has a spreadsheet with active, lapsed & dormant clients – but rarely systematically contacts people to find out why they may not be coming any more.
About half of small business owners still use manual methods to track & manage their customer relationships. Spreadsheets, handwritten notes, emails or simply knowledge kept in your head make many business owners feel disorganised & out of control. And they are right – such disparate and unsystematic approaches are a barrier to discovering real insights about your customers.
CRM is simply the processes we use to identify & understand the behaviours, patterns and preferences around how our customers buy from us & the nature and level of interaction they have.
At its core CRM is about how we manage our marketing activities with our operational activities to make sure we identify, convert & maximise the customer relationships that have the most value to our business – and provide the customer with the best possible experience so they keep coming back.
The technologies may change but the principle of CRM, to me, is about being obsessed with our customers and how we can better serve them.
CRM is a marketing strategy – it involves technology, people & processes. The three combined effectively improve the relationship capital you have in your business . It gives you a competitive advantage – a moat around your most important asset – your customers
Yet many business owners struggle to understand how they can most effectively define CRM strategies for their business and don’t know how to leverage the technologies to implement those strategies.
71% of business leaders DON”T use customer relationship management software to help them do any of this
I believe that the currency of business is relationships and CRM systems are the tool to help us build & leverage that relationship currency in our business.
What matters most is that people trust us and our goal is to have a relationship that compels people to come back and even better bring their friends.
Let’s look at some of the numbers. It costs us five times as much to get a customer as to keep one. Retaining the customers we have is vital to growth and profits. There are many reasons why a customer may leave – but in 8 out of 10 cases it’s because of a poor service experience. And that could simply be that they feel ignored. CRM systems help us see these patterns emerging so we can act to improve experiences and retention.
Retention is key – you have a much higher chance of selling to an existing customer than to a new one.
And customer retention is improved by leveraging a CRM system by as much as 27% ( source: trackvia.com)
Technology helps us do that. As a marketer I’m excited by the potential that these tools offer us to be able to deepen the relationships we have and unlock the relationship capital you have in your business.
How we gather, manage and use the information we have on our customers determines whether we maximise the relationship capital we have in our businesses – or not. Everything in our business is a touch point with our customers.
How many of you know your customers personally? That’s been the strength of many small businesses – personal knowledge. However as you grow it’s harder to know everyone and if you’re operating an online business even more so. You can’t effectively rely on scrappy index cards or unwieldy spreadsheets. You need dynamic tools.
CRM gives you the ability to cut, slice and dice the different groups of people you serve, at different touchpoints, across channels and by stage of their relationship with you. This information is gold.
5 big benefits ;
- You understand the relationship capital you have. You can distinguish between the different types of customer relationships you have.Who your most important customers are, where the opportunities for growth are, where you are losing business. You can figure out what’s working and what isn’t. You can see possibilities whereas before it was a blank page.
- Targeted & personalised lead generation. Many leads are never converted to sales. Once you understand the differences – and similarities- between different groups of customers you can target campaigns more effectively, special offers that are relevant to the individual as well as personalise the messages you send.
- Improves the customer experience. You can track interactions. You have better knowledge of how the relationship is evolving , where the key touchpoints are and can see where that experience can be improved. It enables you to personalise the experience.
- Scalability. CRM systems help you manage & measure your most important asset as you grow. It gives you the system to support your growth. It helps you focus on the opportunities that will maximise value
- Do business anywhere. You aren’t reliant on physical bits of paper. Its accessible, insightful intelligence on your business anywhere, anytime.It’s a protected & secure asset.
So why wouldn’t you – don’t you- have a CRM system?
Two of the biggest barriers are
– It’ll be too expensive? Wrong. Many people think CRM is just for large enterprise type organisations . However there are heaps of free tools out there and many others which are much more affordable than you think. Today’s blog isn’t to go through all the options but comment below if that would help you.
– It’ll be too difficult to implement. The secret is to get someone who knows CRM systems to help you implement it. Once it’s set up the automated processes will actually save you time as well as giving you much richer intelligence to make better decisions that ultimately grow your business
Think of it simply as this; Your CRM system is an opportunity to open a dialogue with the most important asset you have – your customers
The challenge as business owners is to stop seeing CRM as a complex, time consuming piece of technology and focus on how it can help you unlock the relationship capital inside your business
Sarah Denby -Jones is a Business Mentor & Strategic advisor for impact driven entrepreneurs. She’s also a Microsoft SMB Ambassador helping small businesses understand how technology can help them market more effectively.
To find out how she can help you create & build a business you love – on your terms – book in for a complementary Business Growth Consult . Contact her by email at firstname.lastname@example.org.
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