Why Your Business Needs a CRM
With the explosion of apps for almost anything, certain technology terms can be mysterious to small business owners. Two of the most common questions that small business owners can be too embarrassed to ask is what is a CRM, and why do I need it for my business?
CRM stands for Customer Relationship Manager--a piece of software that is designed to do the job of many people. Why is a software program called a Customer Relationship manager, and why do I need a piece of software to help me manage my customers? Both excellent questions.
While CRMs can have an almost infinite level of sophistication, the basic reason that any company big or small uses a CRM is simple: to make the most of my customers by selling as much of my product to them as they will buy. In other words, new and existing customers are so valuable that I, as the business owner, want to have the best relationship with them as possible. The goal is that anytime the customer needs anything that I sell, that they buy it from me instead of my competitor. This sounds simple, but can be really hard to do in the real world. Historically, CRMs used to be very expensive custom pieces of software that only the biggest corporations could justify using. The cloud and many years of development have now put the exact same CRM platforms in the the hands of small business users at a fraction of the price of enterprise CRM platforms.
Analog vs. Digital
To help you understand how a CRM can be critical in today’s business world, let’s take an example of how an analog business would try to manage their customer relationships and compare that to a business that uses a CRM.
Let’s take the case of a couple of florists that operate in the same town. The first is Joe, who’s family has been running this particular flower shop for generations. Everyone in town knows them, and they get lots of repeat business. The second is Mary, who quit her job as a software executive and started a flower business about two months ago. Mary doesn’t have much of a budget and doesn’t really have a list of clients like Joe’s business does. Joe’s Flower shop doesn’t use a CRM and does business like it has for many years. Mary on the other hand realizes that she’s a newcomer to the space and needs to do everything she can to build her customer base to compete with Joe’s.
On the surface it seems like Mary is fighting an uphill battle since she has no client base and her competition has been in business a long time. In many cases this would be true, and statistically most businesses fail within 12 months of opening. Mary, however, understands how valuable clients are and also understands that today’s shoppers have tons of choices, both physically and online--so she’s going to use a CRM to make sure she doesn’t miss any opportunities to capture customers and build the best brand that she can.
A day in the life of Joe’s Flower Shop:
Joe starts his day as he has for years since growing up in his flower shop. He gets the store ready and starts arranging flowers, knowing that soon customers will walk in every day as they have for many years, asking for flowers for their special occasion. Joe knows his customers by name and knows that on their anniversaries, birthdays, and weddings that they will walk in his door and ask for whatever they need. Joe doesn’t really do any special offers, remind anyone of special occasions, or try to get referrals because he doesn’t need to--they always know where to find him.
Mary on the other hand doesn’t have any of Joe’s advantages. If Mary is lucky enough to have someone call her, email her, or walk into her shop she knows that the most important thing she needs to do is to develop a relationship with that customer so that they will come back to her when they need flowers and not walk into Joe’s shop. Sounds intimidating doesn’t it?
The good news is that Mary is savvy enough to use a CRM to do all the busy work of knowing everything about that customer and getting a hold of them at the right time that they might need something. When a customer walks into Mary’s store, she asks a couple of basic questions, like when their birthday or anniversary is, and enters that into her CRM along with their phone number and email. She also knows sometimes people (men) need reminding of special occasions like Valentines Day and Mother’s Day. When one of these special occasions approach, Mary is ready. She uses her CRM and the information she put into it to make a nice email and include a special offer that goes out a week or two before.
Whereas Joe just waits for the customer to come in, Mary has helped the customer by reminding them of the approaching special day and even offers them a discount on the flowers that they need. Over time Joe starts to wonder why fewer and fewer people are walking into his shop, but the answer is simple. Mary has anticipated what the customer needs and when they need it, and even let them know of the special she is running for the occasion. The customer might like Joe, but Mary’s the one that reminded them and also gave them a nice discount--two things Joe has never done.
The added benefit is that Mary’s clients tell their friends about her excellent service, because they get something nice from Mary every time they do thanks to the CRM. As her business grows, Mary is even able to offer her services online to the people in the surrounding area. All of this started because Mary understood how valuable the customer was, and took a moment to learn a bit about them. She then put this information into her CRM, and let it do the tedious work of emailing clients at the right time, responding to their emails, giving out special offers, and even reminding her when to call special clients. Now you know why, when you walk into many of the biggest retail stores, they ask for your name, phone number, zip code, or email. It’s because they’re using a CRM to anticipate your needs and give you special offers at the right time. Using a CRM doesn’t have to be complicated--in this case Mary just collected a few pieces of very valuable information but it made all the difference. Indeed today’s small business CRMs are easy to use with just a bit of computer knowledge, and are easily assimilated by new hires. One of the biggest advances in CRM thanks to the cloud is that many CRMs will seamlessly integrate with platforms that you use every day like individual emails, contacts, calendars, phone calls, and mobile phones. The best benefit of the cloud however, is that you no longer need to pay up front for a CRM...many have affordable month to month fees so that you can get started right away.
A CRM is only as good as the information that you put into it, and ultimately how you use it. The good news is that using a CRM doesn’t have to break your bank or to too complex to use. Even if you sell salmon in a remote part of Alaska, a good CRM can give you more time to focus on running your business and help you connect with customers you never knew existed.