CRM stands for customer relationship management.
It represents a sales management system that allows businesses to create long-term relationships with their clients and customers. A CRM lets you manage your contacts, handle the sales process and track data to acquire valuable insights into customer behavior.
This type of software also organizes and maintains relationships with individual customers allowing businesses to create personalized services and products.
Considering the wide array of CRM features, it’s hardly surprising that the CRM market value has already surpassed $40 billion. This rapid growth is largely fueled by businesses who are adopting customer relationship managers in an attempt to increase revenue.
How do companies use CRMs?
Believe it or not, almost all businesses rely on CRM concepts and ideas.
In the older days, companies used paper notes and clipboards to save and share information between employees. Later, spreadsheets and hard drives took over.
Today, web-based CRM solutions keep businesses in the loop and allow employees to access data from practically any location and device.
Modern business simply can no longer afford to operate without a complex system that organizes valuable and insightful data. The sheer volume of information has simply become too high to be tracked with traditional methods.
Additionally, the Internet may have brought many advantages for large businesses and corporations, but it’s also given people sophisticated tools that can easily crack down any outdated security system that protects spreadsheets and hard drives.
All customer data needs to be filtered to extract valuable insights as well as protected to hide the useful information from the competition.
The solution for all these problems comes in the form of CRM systems, which represent large-scale systems that centralize, simplify and protect sensitive customer data. The best systems can also help businesses become more efficient by automating tasks and streamlining the sales process.
Who should use a CRM?
Everyone. Everyone should be using it.
Each company, regardless of its size, can reap benefits from the implementation of a CRM, because it allows employees within a company to better coordinate their work and manage their relationships with clients.
Similarly, a good CRM can help every company become more efficient. A platform that unifies all valuable data and makes it available to all staff members is proven to increase the overall productivity of a company.
This increase is noticeable almost immediately, as employees no longer have to waste time searching for relevant customer information. Everything is just a few clicks away on your CRM system of choice.
In other words, all companies that want to improve their work environment and further their growth should look to implement a CRM.
How does a CRM help sales teams?
When you collect all your data on a centralized platform, the sales department can assess customer information and create detailed reports and analyses. The marketing team can later use these thoughtful reports to close more sales by creating customer-specific solutions and offers.
Furthermore, these powerful dashboards allow sales teams to track customer orders, behaviour and even social media accounts to create more meaningful, long-lasting relationships.
In the older days, it was easy for information to be thrown out with old notepads or remain hidden on forgotten spreadsheets. Modern CRMs have solved these problems by storing all data on cloud resources. This allows companies to always possess real-time data and act in accordance with their customers’ needs and desires.
Cloud vs on-site CRM
It’s been more than a decade since businesses starting implementing CRM technologies. A study made in 2008 found that over 88 percent of all CRMs were on-premise systems.
As new technologies evolved, this percentage gradually declined – more and more companies started switching to cloud-based systems. The debate on what makes a high-quality CRM soon started as older platforms fought to remain relevant in an ever-changing environment.
However, on-site systems quickly proved to be ineffective, as they limited the software’s usability to a single location. To stay connected with their customers, modern businesses needed platforms that are accessible 24/7, from virtually anywhere on the planet.
This necessity quickly gave us a rapid growth of cloud-based, mobile CRMs – highly efficient platforms that require no hardware components or parts in the company offices.
Unsurprisingly, businesses were quick to adopt the new cloud technology and switch to this new type of CRM systems. Today, it’s estimated that 87 percent of businesses utilize web-based CRM platforms.
Additionally, the CRM market literally started exploding in growth, as a recent industry study found that CRM usage rose from 56 percent to 74 percent in 2017. The same study also concluded that 91 percent of companies with more than 11 employees are already using a CRM within their organization. For companies with 10 employees that numbers is slightly lower, but still comes out to an impressive 50 percent.
Simply put, this is the age of CRMs.
No business can allow itself to fall behind on industry trends and continue working without a CRM for much longer. It’s only a matter of time before CRMs become an integral part of each company, regardless of size.
What are the key features?
The number of available CRM features depends on the nature of the system, its price and plans. Specialized CRMs are customized to fit a certain type of businesses and their features are usually limited.
General CRMs can have countless features and their features are typically divided into categories which correspond to the pricing plans. What follows is a breakdown of the most important features that each CRM should have.
If your CRM does not possess all these functionalities, you may want to consider switching to another, more complete solution.
- Sales management – from leads to final sales and invoicing
- Task management and automation
- Access control
- Custom fields and filters
- Reports and analytics
- Instant messaging
- Easy integration
- Multilingual support
Most CRMs have a satisfactory level of integration, but you should carefully assess the available integrations for each CRM. If you’re considering a specific CRM, make sure that it integrates with the most popular software tools and platforms, such as WordPress, MailChimp, LiveChat, G Suite, etc.
A CRM can have all the perfect features that your company needs, but if it does not integrate well with other programs, its usability and efficiency will be questionable.
Advanced CRMs, such as Simply, go even further and offer a complete solution that integrates with WooCommerce, Outlook and many other systems. What’s more, Simply also incorporates customer support services to provide clients with a cloud ecosystem that covers all aspects of a modern business.
Why do businesses need a CRM?
We have already illustrated the staggering growth of CRMs over the recent years. However, that alone does not prove that CRMs are a cost-efficient solution – maybe the companies are merely testing this new technology.
To further demonstrate why businesses need a CRM system, we have collected the following statistics that showcase CRM’s effectiveness.
- Forbes estimates that the CRM industry is worth at least $36 billion. The same source claims that Compound annual growth rate (CAGR) on CRMs equals 15.1%.
- IBM has found that the CRM market has the highest growth rates in the software industries. The year-on-year growth adds up to 27%.
- The return-on-investment (ROI) of CRMs is incredibly high. Forrester estimates the ROI at 245%, while Nutshell claims that each $1 invested brings up to $8.71 in revenue.
- CRMs are especially effective for small and medium-sized businesses. Up to 60% of small businesses use a CRM system for email marketing campaigns, which have a 300% increased conversion rate. (Cloudswave via IBM)
- Cloudswave also found that leads cost around 20% less with a CRM, while the average purchase value can be increased by up to 40% if the company uses a CRM system.
- CRMs improve customer relationships by 47%, according to Capterra. Meanwhile, Software Advice claims that 74% of business that use a CRM report better customer relationships with their clients.
- A research study from Annuitas Group has proven that almost a half of all leads that start within a CRM convert and make at least one purchase.
The potential downsides
While everyone can benefit from a CRM, it’s worth mentioning that these systems can also bring in potential drawbacks.
Most notably, CRM systems can be hard to adopt, especially if the employees are not used to advanced technological solutions. Sometimes, the entire business may need to adapt to the CRM system, which can take a considerable amount of time.
Similarly, workers may require professional training and non-stop support from the CRM team. Most employees have no previous experience of using CRMs and the feeling of uncertainty that an entire new system can bring may sometimes be overwhelming. It shouldn’t be surprising to learn that the adoption rate of CRMs is as low as 26% across all industries.
Proper training and high-quality customer support from CRMs can help employees struggling with the system to overcome the difficulties and their importance truly cannot be overestimated.
A free trial version or a decent refund policy are arguably as important as support. You don’t want to spend thousands of dollars on a CRM solution and lose everything if the system proves to be a bad fit for your company.
However, it’s worth mentioning that companies can also have unrealistic expectations from CRMs. Business owners should understand that a CRM cannot turn their company into a successful organization overnight. To acquire the benefits that CRMs undoubtedly offer, employees need to use the system for a prolonged period and work with it on a daily basis.
Inconsistent and irregular use of a CRM may still have a positive effect on the company, but its success will be limited.
Another downside to adopting a CRM comes in the form of limited features. However, that is only an issue with low-grade CRMs that are incredibly cheap. More comprehensive solutions have no such limits, but they typically require a somewhat higher initial investment, which can put off some businesses.
Should a business use a CRM?
In the end, it’s important to emphasize that the benefits far outweigh any potential downsides of CRMs, most of which can be avoided by simply researching the market before making a purchase.
However, the decision to incorporate a CRM within any organization shouldn’t be taken lightly. It’s essential that you assess all of your company’s options before you settle on a CRM software.
If you need help deciding whether or not you need a CRM, consult our article on how to find the best CRM, schedule a free consultation or a free trial with Simply CRM. Our experts can help you by evaluating your business and recommending the best solution for you.