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5 Signs Your Small Biz Is Ready for CRM

By Christopher J. Bucholtz CRM Buyer ECT News Network
Jun 7, 2012 5:00 AM PT

There's a lot of opportunity for CRM vendors seeking to reach small businesses. While there are 15 million seats of CRM in action today, there are a lot more than 15 million customer-facing workers out there, and the vast majority of them are in small businesses.

5 Signs Your Small Biz Is Ready for CRM

That's a big opportunity for CRM vendors -- but what does it mean for potential CRM users? You'd think I'd be advocating that if you're a small business owner who's not yet using CRM, you immediately take to the Internet and buy an application straight away. Go! Now!

Well, hold it -- I'm not advocating that. In fact, I think that getting CRM too early is exactly the wrong thing to do -- and it can inflict the same kinds of negative impacts on your business as getting CRM too late.

Even CRM guru Paul Greenberg admitted he doesn't use a CRM application -- and that should tell you something.

You may not be ready for CRM, or your business may not require it. If that's the case, investing in CRM will be a waste of money and effort, and it can keep you from doing the things that will grow your business.

So, are you ready for CRM?

Here are five indicators that can help tip you over the edge and toward a CRM application:

1. When You Lose New Sales

Every company loses in the selling process -- if that weren't the case, selling would be easy. But when you never get into the sale because lead information is misplaced, or when you fail to follow up because of disorganization, or when your sales people are spending more time updating and managing Excel spreadsheets than they are selling, then it's time to move toward CRM.

At its most basic level, CRM is a place for that data to go, allowing you to collect it, store it, and use it as the basis for alerts and future sales activities.

It also allows you rapid access to collateral materials when they're needed and gives the sales manager the opportunity to understand where sales may be going wrong and react to remedy the situation. It's hard to do all that with a purely manual, spreadsheet-based approach.

2. When You Lose Existing Customers

CRM is useful in gaining new customers, but it's even more valuable when it comes to keeping existing customers. If you start losing them because of failures to follow up -- especially with customers who order on a regular basis -- it's time to introduce some automation into your sales operations.

Worse yet is what happens when you try to retain too much personal and relationship information about your customers in your head. Some people are great at it, but even they will start to forget or confuse data when it starts to add up.

This puts you at risk of sending the signal to your customer that, despite their past business, you really don't know them as well as you ought to. If you forget important details of your relationship with a customer, why should that customer believe that you're any different from any of your competitors?

3. When You Lose Control of the Data That Explains Why Things Happen

It's useful to understand the patterns of successful, closed sales: What did you do that moved the customer closer to a buying decision? But when you can't discover best practices in the sales process, you have a problem.

In order to be productive, your sales people need to do the things that work, and they need to repeat them. If something is demonstrably effective in closing a sale, then it should be discovered and shared -- and, even in the case where there's one sales person, it should be identified and utilized.

If your selling process has become complex enough that these processes and best practices are no longer easily identified -- and if that failure to spot these processes begins to result in lost sales -- it's time to look at CRM.

4. When Your Customer Data Is Too Much to Manage Manually

The longer you have customers, the more you know about them -- their buying patterns, their payment terms, the things they respond to and the personal information they've shared with you.

Those things all become important parts of your relationship with them. But you can't expect to carry this detail in your heads; anthropological study revealed the Dunbar number -- or the number of people with whom you can have a meaningful relationship -- ranges from 150 to 210.

If you omit your family members, friends and coworkers, how much space is there left in your head for information about customers? When you start to have large numbers of customers, or you start to value large volumes of data about your customers, it's probably time to move to CRM.

5. When That Data Becomes Valuable to Multiple Parts of Your Business

It's not uncommon for customers to suggest features or future products they'd like to see during sales calls. But is it possible for sales people to do the work on their own to get this information back to the right person in their companies? And whose job is it to spot sales spikes and report them to manufacturing? And what happens when an unexpected audience for a product suddenly develops -- does someone tell marketing?

These are just a few scenarios in which data that sales may see first will remain trapped within sales unless there's a system in place to share information.

Sales can be a window to the outside world for the rest of the company, so siloing this kind of data within the sales department is the same thing as discarding it unless you have a mechanism for sharing it internally. That shouldn't mean sales bubbling it up -- it should mean having a system in place so marketing, support, manufacturing and other parts of the business can find that information.

If any of these scenarios resonates with you, it may be time to look for a CRM solution. Implementing CRM may seem like a challenge, but if you're losing sales, efficiency is suffering, and opportunities are going unclaimed, trying to continue to live with your sales processes the way they are could be the real challenge.

CRM Buyer columnist Chris Bucholtz blogs about CRM at the CRM Outsiders. He has been a technology journalist for 17 years and has immersed himself in the world of CRM since 2006. When he's not wearing his business and technology geek hat, he's wearing his airplane geek hat; he's written three books on World War II aviation.

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