No business is as close to its customers as a small business.

As a small business owner, you have personal relationships with many of your customers and understand their unique wants and needs, while sharing a history that allows you to deliver personalized service that sets your business apart.

Strong customer relationships are a key driver for small business success.

What if you could optimize this important business element and grow your business at the same time?

That’s what a customer relationship management (CRM) system can help you do. It is a marketing investment that can quickly pay off with happy customers who know they are heard and valued. A CRM also can yield new efficiencies and insights to help you take your business to the next level.

What Is a CRM System?

No doubt you keep a lot of customer information in your head and variously scattered among emails, appointment calendars, address books, spreadsheets, paper files and the like. Keeping track of all that information and pulling it together on demand can be challenging.

A CRM system is an online tool that allows you to consolidate and organize your valued customer information in a single online location that both you and your team can access. Many CRM systems also include features that automatically integrate with your customer profiles, such as an online calendar and address book. Some can even synchronize with email and Microsoft Office and bring in client information from your accounting system.

The net effect is a big-picture view of your current and potential clients that you can build upon with every interaction throughout the sales and service life cycle—and put to good use in managing your relationships.

Why Do You Need to Manage Your Customer Relationships?

Your customers’ experiences are a major factor in driving your business revenues. The products and services you offer are vital, of course, but the quality of your interactions with customers are equally, if not more important. In fact, the probability of selling to an existing customer is 60 percent to 70 percent. The probability of selling to a new prospect is 5 percent to 20 percent, according to the book, “Marketing Metrics: The Definitive Guide to Measuring Marketing Performance.”

Managing your relationships effectively helps ensure a positive experience for all of your customers, especially existing ones, who are so vital to your success. Customer information can be a valuable facilitator: The more information you have, the better you can anticipate and respond to individual customer needs, and that’s good for business. It strengthens your relationships, breeds loyalty, opens up opportunities for cross-selling and increases the possibility of new customer referrals without any marketing costs.Customer data also can yield insights that help you make better business decisions and target your efforts more effectively. With a CRM system, you can readily tap into your customer database to:

  • Identify profitable vs. unprofitable customers and take appropriate action
  • Customize your offerings to meet customer needs
  • Market the right products to the right customers
  • Adapt your business to the changing requirements of your customers
  • Measure customer satisfaction
  • Increase your efficiency
  • Lower costs for both sales and service
  • Keep track of customer issues and respond effectively

What Kind of Data Can You Track with a CRM System?

Many CRM tools are on the market today, and all capture a range of information about your customers and contacts. Some can even be customized to fit the unique needs of your business.

Commonly captured information includes:

  • Details about your customers and prospects, including demographics, personal information, buying preferences and service issues
  • Meeting times, phone calls, to-do items and follow-up tasks with any notations you would like to add
  • Inquiries received and emails sent
  • Sales opportunities underway and their status
  • Price quotes, sales orders and invoices
  • Visitors to your website

Many CRM tools also offer what is known as a social CRM, a means to “listen” to what your customers are saying about your business on social media and respond to their questions and concerns. You can also track the channel that’s generating the most traffic for your business.

How Can You Put CRM Data to Day-to-Day Use?

Once you’ve consolidated and organized your data into a CRM system, there are many ways you can put the tool to practical use to connect with customers and benefit your business. Here is a sampling:

Share information with your team. With a CRM system, you and your team have access to the same data. You needn’t worry about old versions of files floating around or keeping a customer waiting because the person with the information in question is out sick.

Recall what you need at will. You can capture any data that’s helpful to the customer relationship and use the CRM system’s search to quickly find, sort and zoom in on the information as needed. For instance, you may choose to view sales results for a specific product line or a list of customers requiring follow-up.

Respond effectively in every interaction. Because a CRM system provides a full picture of your customers and their history with your business, you’re in a better position to anticipate their needs and respond quickly and effectively in every interaction. You can infuse conversations with a personal touch that leaves customers feeling that you know and care about them.

Stay on target. With a CRM system, you can better stay on target with the to-dos and follow-ups that are so essential to managing your business and your relationships. Calendar features typically allow you to schedule events, milestones and tasks for yourself and your staff, and link them to your contacts. You’ll receive an alert as each item comes due, and can view those that are overdue and completed.

Gather insight. CRM reporting can provide valuable insight into various aspects of your customer data, from tasks assigned and milestones achieved to sales opportunities and customer service activities. You can easily capture a high-level overview and drill down for details—and respond proactively to what you see by promoting teamwork, helping sales through the pipeline or attending to client needs.

Budget-friendly CRM Options

Here are some of the top CRMs for small business. All feature basic contact and deal management along with special features that set them apart from other tools:

  • Insightly is a CRM for small and growing businesses as well as larger enterprises. Unique features include tools for project management, workflow automation and web forms for capturing leads as well as social CRM. Insightly also integrates with more than 20 programs including Google Apps, Microsoft Outlook, Quickbooks, Dropbox and Gmail. The basic plan is free for up to two people. Upgraded plans begin at $15 per person per month.
  • Zoho CRM offers powerful automated features for lead assignment, workflow and alerts, comprehensive reporting and social CRM. It integrates with WordPress, MailChimp, Evernote, Google Apps, Gmail and many other applications. A free edition is available for up to 10 users. Editions with greater functionality cost from $12 to $60 per user per month.
  • Nimble excels at social media. It can combine all of your social media accounts into one contact box and inbox and identify opportunities to engage with your customers. Nimble integrates with more than 60 applications including Evernote, MailChimp and Freshbooks. It is available for $15 per person per month.
  • No list of CRM systems would be complete without mention of Salesforce, the top CRM system among large companies. Salesforce also offers powerful small-business solutions that range in price from $25 per person per month for the out-of-the-box edition to $125 per person per month for a deeply customizable version.

When shopping for a CRM, start simple, with capabilities that align with your business goals. And remember that the benefits you realize will be directly related to how effectively you put the tool to use. Get your entire team on board and make sure you take full advantage of the features your CRM system offers.

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