As a marketer, you're likely familiar with a CRM software; if not, no worries, you're about to learn all about it! The frustrating thing about many CRMs is that they come with a range of functionality -- from basic to robust -- and all too often, businesses find themselves equipped with more than they need (or frankly, can handle).
In an attempt to equip businesses with the right CRM system for their needs, this post will explain -- without the gobbledygook -- what the heck a CRM is, why they are incredibly valuable in the right hands, and whether you actually need one at this stage in the game.
And if you find after this post you are ready for one, be sure to remember that you can get pretty fancy with a CRM. So keep in mind all of the benefits listed below, and select only those that are most applicable to your business, marketing, and sales processes during implementation.
CRM stands for "customer relationship management," and it's a system a business can implement to help track and measure its sales activities. That could mean, for example, how many leads and customers are in your database, as well as information about them, like name, email address, phone number, etc. It could also mean tracking how often your sales team gets in contact with those leads and customers, and what those conversations were about. You can even set up custom reporting to tell you how efficient your sales organization is every day. Most CRM systems are extremely customizable, so the range of items you can track and measure is quite expansive.
There are many things a CRM can help you do that should get marketers pretty excited! Here's how a CRM can make you a more effective marketing and sales machine.
Easy Access to Lead Intelligence for Sales -- When Sales works within a CRM that's integrated with your marketing software, they're able to access lead intelligence all from one place. So if you're using, let's say, HubSpot as your marketing software and Salesforce as your CRM, your sales team never has to log out of their CRM to get all the juicy information you have about their leads. They'll also likely have better lead intelligence with a CRM, because not all of the lead intel you gather happens through your marketing software. As others on your sales team talk to and learn more about a lead, they can add information to their contact record in your CRM so that anyone who speaks to them has a complete picture of who that lead is and the personal interactions they've had with others on your team.
Better Sales and Marketing (SMarketing) Alignment -- Let's be clear. A CRM does not solve for SMarketing alignment ; but it does enable it. Sales and Marketing both have numbers they need to hit each month, and when both teams work within a CRM that is integrated with your marketing software, it's easy for everyone to quickly assess how each team is progressing with their goals, and identify and remedy problems early on in the month. You can set up real-time reporting that tells anyone in Sales how close Marketing is to hitting its monthly leads goal, and Marketing can see whether Sales is calling those leads filling the pipeline. It's also worth noting that CRMs are used for customers too, not just leads; so customer service communications and metrics can be easily documented for account managers to reference with their current customers.
Help Sales Prioritize its Pipeline -- A CRM not only gives complete visibility into the sales pipeline, but it also helps reps prioritize who to call first so they don't miss important opportunities. When Sales and Marketing set up a CRM, they can identify important fields and implement a lead scoring system . Or, if you haven't gotten to scoring leads, a "sifting" system. It will empower salespeople to prioritize the best opportunities instead of embarking on a disorganized search through a pipeline full of leads at various stages in the buying cycle.
Closed-Loop Reporting Lets Marketers Improve Campaigns -- When you integrate marketing software with your CRM , Marketing can easily analyze the effectiveness of its campaigns with closed-loop reporting , because your software and your CRM are constantly talking to each other through an API. So when a salesperson converts a lead into a customer, he or she can mark it in the CRM, and it will automatically be noted in your marketing software, too. Marketing is now able to do a little back-tracking to see which campaigns and channels contributed to bringing in and re-converting this lead. What channel did that lead come in through? What content contributed to that lead's conversions? Mapping marketing activities to sales events is critical for Marketing to improve future campaigns.
Wait, Are You Sure You're Ready for a CRM?
All of that sounds great, right? The thing is, you can get all of those results manually. The appeal and rationale around implementing a CRM is that there's a point at which doing all of that manually is impeding your effectiveness. At some point in your business' growth, it's just not scalable to manually document and analyze lead and customer information and sales team activities.
That doesn't mean you shouldn't do it for a while, though. With the resource constraints many small businesses face -- and by resources, I mean time, money, and proper staff -- many are better served using a spreadsheet to document lead and customer information. Here's why ...
When You Don't Need a CRM
CRMs cost money (obviously), but the true cost associated with them is more than just a monthly fee. You'll need to implement the CRM correctly. Once you've researched and selected the right solution, you'll need to integrate it with your other software applications, find and hire full-time or contracted specialized staff who know how to execute that integration, and train your staff on how to use the CRM so your operations run smoothly. That last part is crucial -- you need to have the buy-in of your sales organization to make your CRM investment worthwhile. If Sales isn't updating information immediately and consistently, all of your lead and customer data will be extremely well organized, but it will also be completely inaccurate.
If you've never been through a CRM implementation, trust us when we say that it's easy to mess up any one of these steps, and doing so takes your eye off the ball -- bringing in leads and selling new customers. So if your lead flow is low and growth trajectory isn't extremely aggressive (many startups do have extremely aggressive growth goals for which a CRM may be a necessary investment early on), consider using a spreadsheet for a while. It's not fancy, but fancy isn't what you need right now -- you need to increase lead flow and customer conversions!
When You Do Need a CRM
Frankly, if you're out of that small business growth phase we described above, you might just be ready for a CRM. Again, you could continue to manually document lead, customer, and sales team information and activities -- you could even create some wonderfully complex shared spreadsheets to keep track of it all -- but it just isn't the most efficient, long-term solution to manage this information.
That's because it's no longer just a couple of salespeople in charge of documentation, with you taking that data and running some weekly or monthly reporting in Excel. You now likely have hundreds of leads coming in on any given day, many salespeople in charge of working with those leads, and thousands of customers they've converted that you now need to keep track of. In order to maintain an accurate database of information, you'll need all hands on deck -- and do you really want all hands in one spreadsheet ? Not only is this not scalable, but it will also result in inaccuracies.
Remember earlier when we talked about having really well organized lead and customer data, but it was all inaccurate because your sales team wasn't properly trained (and required) to use the CRM? The same will happen if you wait too long to implement a CRM -- you'll have well-intentioned sales and customer service teams who just can't keep up with updating the information flow. If you're dealing with this type of lead and customer volume, it's a sign that it's time to make that resource investment in a CRM system.
When did you make the investment in a CRM? Share your experiences in the comments!
Originally published Apr 24, 2012 12:30:00 PM, updated February 04 2022