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Can My Business Benefit from a CRM?
One of the most common questions from small to medium-sized business today is, can my business benefit from a CRM? In this blog, we'll discuss both the business types that can benefit greatly from implementing CRM software and those where a CRM would offer an advantage.
One of the most frequently asked questions about CRMs (customer relationship management software) is whether or not a particular business type can benefit from having a CRM software platform or simply put, "Can my business benefit from having a CRM?". Not all businesses are the same, so the answer isn't quite as simple as yes or no. It really depends on the business you're in.
What's a CRM ?
CRMs were originally designed as simple contact management tools to keep businesses in touch with and organize their customer's contact information. CRM technology has evolved by quantum leaps since the first "Customer Evaluation System" was brought to market in 1986 when Pat Sullivan and Mike Muhney released ACT! The first CRM design was based on the principle of digital rolodex, which offered a standardized contact management service.
Since 1986 there have been many software companies that jumped into the space and created new iterations on this basic principle. Year after year new features and functionality have been added to service the needs of modern sales organizations. Today's more sophisticated CRM software platforms are a combination of the original contact management tools with enterprise-level databases coupled with sales and marketing automation tools.
Can my business benefit from having a CRM?
Let's take a moment to discuss which types of businesses can benefit from having a CRM and which types of organizations might not see any benefit. First, let's get right to the point an look at the businesses where having a CRM software platform will add value:
Companies that sell "considered" products or services.
A considered product or service is something that the consumer or business buying it will need to research, compare, and evaluate before making the decision to buy. Examples of considered products or services in the B2C (business to consumer) space may be products like a new car, a mortgage, home improvements, or legal services just to name a few. A few examples of considered products or services in the B2B (business to business) space may be a new software platform, new phone systems, or consulting services just to name a few.
Companies that Sell Solutions.
Solution based selling is becoming a very popular sales methodology. Instead of just selling or promoting a product based it features, the salesperson focuses on the problems, challenges, and goals of the prospect and then addresses the issue with educational information that aligns your company's product or service as a solution to the problem, challenge, or goal. Most any product or service can be sold as a solution if you really think about. This is discussed in detail in the Harvard Study on the "Jobs to Done Theory".
Companies with different customer segments and personas.
If you have a product or service that works for different target markets, then you could definitely benefit from a CRM. E-commerce retail customers are a great example. Their customer base is typically comprised of the Brand Loyalist, the Trendsetter, and the Bargain Hunter. Some of your customers might be loyal to particular brands, while some might only want the newest trending products, and then there's always the segment that waits until the item goes on sale. The ability to segment those customers in a CRM and send them offers specific to their shopping preferences mean that they are more likely to respond.
Companies with more than one product line.
This is very similar to the use case above but in this case your prospects or customers are divided by product lines. Let's say for example, you sell heavy machinery. You might sell machines for commercial builders, farmers, excavators, or even oil drillers! Your business may be heavy equipment but the verticals you sell to are very different. Each vertical probably has a slightly different sales process and will most likely have a different set of qualifying data. All of these variables can be managed inside of a good CRM platform.
Start-ups that are growing fast.
Any new business that needs to scale their sales efforts quickly and efficiently are strong candidates for CRM technology. New start-ups need to efficiently compile customer information and behavioral data in real-time so that it can be used to make decisions regarding product development, marketing channels, sales content, or customer service. CRM software helps the new company accomplish this in the background, while the company leaders focus on strategizing for success and growth.
Membership and subscription based businesses.
Businesses that offer subscriptions like online publications and SaaS products, or memberships driven businesses like gyms, organized clubs, and non-profits can also benefit from having a CRM. These types of business can utilize the data aggregated in the CRM platform to create automated workflows to help keep subscribers or members engaged, drive more customer referrals, create more up-sell opportunities, and increase renewals.
Businesses that want to increase Customer Lifetime Value or lower Cost Per Customer Acquisition.
Maintaining good customer relationships post-sale can pay huge dividends to your business. During the sales process, if your sales teams dis their job well, helped you customer find a solution to their challenge or achieve their goal, then you'll definitely have the intrinsic good will of the customer. However, that goodwill has a shelf life. Like the saying goes, "out of sight, out of mind". Once you've developed a relationship with a customer it always makes sense to continue nurturing that relationship. Those relationships typically lead to a loyal customer who continues to spend more with your business.Those customers are also likely to generate more word of mouth referrals via family, friends, or co-workers. After all, everyone loves to say, "I gotta guy".
"When a company engages customers using a CRM, that customer is likely to spend 20% - 40% more the next time they buy from that company." - HubSpot's 2018 State of Inbound Report
However, not all companies have a burning need for CRM software but that group is getting smaller every day. If you identified your business above you can get started now or scroll to the bottom and read on.
Companies that don't sell direct.
A great example of this is pharmaceutical companies that sell prescription drugs. Their products are not sold directly to the end user (the patients), but are distributed through retail pharmacies at the written prescription of doctors. In this case, there is no customer data that can be collected and used by CRM software. However, an argument can be made that collecting information on the key influencers (the doctors) can be used to communicate with them and grow sales.
Companies that sell retail commodities.
If your business has very predictable sales because there is a general need for your product or service, then you definitely wouldn't benefit from CRM software. Everybody needs groceries, gasoline, and general household items to name a few. So if you owned a grocery store, gas station, or a hardware store, you probably would get much benefit from a CRM. Since people consume these items on a daily basis, they buy based on location, convenience, or price.
Companies with limited customers.
Businesses that have a small group of customers and repeatedly sell the same products probably wouldn't benefit from a CRM either. If you're not collecting much new customer data, generating many new leads, or adding new customers then you probably don't need CRM software for now.