Small and medium business owners get nervous when they hear new terms and acronyms: CRM, BPM, CMS, ERP, ECM and others. This is not surprising, because behind each of them there is a radical or significant restructuring of the business, the need for adaptation, training, implementation, but most importantly — increased costs. You only have time to open your wallet (in this case — your current account). At the same time, no one can give a 100% guarantee that the investment in implementing new information and business systems will pay off.
Not surprisingly, many start-ups and micro-businesses are wary of automation systems — nobody has extra money.
Mass popularisation of CRM systems through various seminars and conferences does not work in their favour. Such systems resemble fake gurus and online grifters. But where is the truth? Is it worth implementing them in your company? And in what cases is it really justified?
Who is who?
What is a CRM system? It is an automation tool that systematises customer contact processes: it stores information about transactions, correspondence, notes, contact details — all in one place and at your fingertips.
But what stops you from using, for example, an Excel spreadsheet for the same purpose? Or even better, using the same functionality but in the cloud, as implemented in Google Tables?
There’s nothing in the way. Which is why many small businesses do just that. They keep customer lists in special files.
It’s cheap, it’s angry and it always works.
Pros of storing client bases in tables (databases)
- Basic information about customers and business partners is always at your fingertips — in one place. There is no need to search multiple sources or waste time remembering a customer’s phone number.
- Data can be easily transferred between devices — you can copy it to your home or work computer, share it with colleagues, etc. When the office is cloud-based, teamwork becomes much easier and simpler.
- No additional investment is required for maintenance and implementation. Office applications can be either free or still present in the workplace (as part of the office suite used for other business tasks).
- Centralised information is easy to edit and add to.
- No or minimal training is required to use spreadsheets.
Disadvantages of using spreadsheets instead of profile CRMs
- It’s easy to steal data from files. Yes, it is quite difficult to set access rights here. A user cannot have only part of the information from a spreadsheet or a separate sheet. Everyone can see everything at once. And this is a real treat. Someone may take the database for selfish reasons, someone may take clients to a new job, someone may sell the database to a competitor, someone may delete or clean it to spite the manager who has offended him (for example, in retaliation for being forced to fire him, or for personal insult). There are many ways in which data can be lost.
- It’s hard to set up secure storage and backups. It’s one thing if the database only has a few rows and the customers are mostly retail: they’ll still come back or find a way to contact you. But if the database is large, or the sales model is based on individual large deals, data loss can be very sensitive.
- It is difficult to manage access: who has editing rights and who does not, what information an employee can and cannot see, etc.
- It is difficult to fill the database in automatic mode. As a result, you need to manually transfer contacts from websites, social networks and marketplaces. And this takes time and the employment of certain specialists. If the flow of applications is very large, it will take several people just to fill the table with contacts. And people can get sick, go on smoke breaks, forget things, make mistakes — after all, they have a salary to pay.
- It is impossible to take into account correspondence with the user or to work with dynamic content in tables. Tables are only suitable for storage and accounting.
- There is no way to monitor the actions of employees online. How the call went, what was discussed with the customer, what was achieved, what next steps are required, who is responsible and other details.
As you can see from the disadvantages, the main problem with tables is the lack of automation as such.
So when does it make sense to implement a CRM system?
The very moment you realise that spreadsheets are no longer up to the task:
- There are becoming too many customer enquiries and contacts. Managers simply don’t have time to enter data.
- The cost of a specialist’s error is too high for your business — every deal that is thwarted or forgotten is a serious loss.
- You are launching a major advertising campaign, combining different sources of lead generation — you need to take it all into account and keep statistics (analytics).
- You need guarantees that your customer base is safe and secure — no one will steal your customers, delete your customer contacts built up over the years, etc.
- You need to optimise work processes because the old sales model no longer works.
In short, there should be a situation of revolution when the bottoms (your managers and employees) can no longer work like this and the tops (management) do not want to… Actually, no, the tops are just in time to see the problem and want to solve it.
That’s when CRM implementation is justified.
Advantages and disadvantages of CRM implementation
Note that some of the functionality available in CRM systems can be taken over by other business systems, including BPM software and task managers such as Projecto. It’s about setting and controlling tasks, scheduling, delegating, tracking progress on tasks, discussions, maintaining schedules, reminders, notifications and more.
Since working with tasks is not so well implemented in CRM, it is logical to organise the integration of two systems: CRM and BPM (more details on the differences between different types of systems). It is even better if all business systems are connected to form a single whole.
But there’s also the other side of the coin. There are ‘all-in-one’ solutions. But their implementation and use is not advisable — as the complexity of the interface increases significantly, it becomes harder to implement, train, configure, etc. It is better to use several profiling tools and then properly configure the data exchange between them.
So, the benefits of CRM implementation:
- Systematisation and accumulation of all customer data.
- At any time, managers can obtain adequate information on individual transactions, contacts, customers themselves. In addition, it is possible to obtain general analyses or summaries.
- It is easier to control the actions and access of individual employees.
- CRM can be made part of the process of automatically calculating the bonus part of the salary (well, or used to justify the deduction, it all depends on the calculation scheme).
- Automation of separate processes: collecting applications from websites and forms, linking to marketing mailings, collecting contact information, sending notifications to employees, load balancing for incoming applications, etc.
- Monitoring problems and bottlenecks — through a system of reports and analysis for the management team.
- Setting and controlling tasks (but mostly related to customer relations, not general tasks within the company).
Minuses of CRM systems:
- The need for training during implementation, i.e. wasted time. Few tools and services offer an easy entry point. And when most of the business processes have to go through the information system, many questions arise: what and where to enter, how to add contacts manually, how to write to the customer so that the system takes everything into account, etc.
- Acquisition costs. Almost all CRMs are sold on a subscription model. Less commonly, they require the purchase of an expensive licence and installation on a company server. In both cases, the cost is not pennies on the dollar. And if you don’t have your own IT people to deal with configuration and training, you’ll have to spend money on third-party specialists.
- Many CRM systems talk about their flexibility. But marketers are being a little misleading here. If a system is flexible, it has a lot of settings. That means you need a specialist to configure and maintain it. If the settings are minimal, it is probably easier to redesign the business for CRM than to refine CRM for the business. And changing familiar business processes is always stressful for the whole company.
- Refusal to pay for a subscription (licence) can mean that the business is paralysed: no access to the contact database, new enquiries are not taken into account, sales are not counted, etc. At the same time, it is almost impossible to diversify risks — you cannot keep track of contacts in several independent systems in parallel.
- The likelihood of sabotage by individual employees is of course reduced by distributing access rights via CRM, but it is not eliminated. There will still be users with maximum rights who can completely delete, corrupt or steal the database (thanks to uploading). This should always be considered.
So to implement or not to implement?
If you have a small team of up to 10 people, a steady flow of customers and your main sales revolve around a fixed base, then implementing CRM will be pointless. The system will simply not pay for itself.
However, if you are planning to advertise your products on the Internet, increase your sales significantly and at the same time reduce the number of people in your marketing department, CRM will be very helpful. At the same time, 10-15 employees will be able to achieve unprecedented productivity, because the business system will be able to take over most of the work of maintaining contacts.
But it’s important to remember that there are no miracles. CRM is just a tool. And if you don’t use it, or use it wrongly, it won’t work.
The most important principle of implementation — do not buy CRM just to tick a box or because your competitors have it. If you don’t understand what it is and how it can help your business, then you definitely don’t need CRM.
