What is CRM software?

First, let us briefly define CRM. This software type is now the single largest software market globally but has only recently emerged on many smaller businesses' radars.

As the name implies, CRM systems seek to manage customer interactions with businesses. They offer a centralized customer database to achieve this goal, which different departments can use to coordinate their efforts. They then provide such features as lead management, communication channel consolidation, and more, to further help businesses inform their outreach and foster deeper bonds with customers.

However, features vary quite notably among solutions – and that isn't just because of the need for differentiation. Each business's needs differ, so CRM systems often specialize toward specific tasks. In brief, the primary such specializations are 3:

• Operational; this subtype specializes in marketing and sales automation.
• Analytical; instead, this subtype specializes in predictive modeling and profitability analysis.
• Collaborative; finally, this subtype specializes in internal collaboration.

But specializations aside, even general-use CRM systems can offer immense benefits – as we'll cover next. They may evolve into essential business tools between their features and increasing affordability.

Choosing a CRM solution

All that said, before small businesses can benefit from CRM software, they'll need to choose the best option for them. This is a primary challenge for many, as an overabundance of CRM options often makes choosing the ideal one difficult.

To approach this step with due diligence, you may consider the following steps:

• Better lead nurturing. CRM keeps track of customer interactions from the first touchpoint to the last. You may inform your outreach content and timing for more efficiency and upsell and cross-sell opportunities in the process through lead nurturing features.
• More profound customer journey mapping. Similarly, lead insights and interaction record directly help deepen your customer journey mapping practices. Through them, you may optimize your sales funnel and ensure fewer leads drop off without converting.
• Automated marketing outreach. Finally, and perhaps most importantly for smaller businesses, marketing automation features offer immense marketing benefits. Through them, you may expand outreach beyond working hours and align it with optimal outreach times for specific customer segments.

As you do, remember that an explicit industry focus may not at all times be preferable. Depending on a solution's exact features, it may be for such businesses as restaurants or car dealerships. However, general-use CRM may meet your needs just as well – and with a more modest price tag, at that.

How small businesses can benefit from CRM software

With the above in mind, we may now delve into CRM's exact benefits small businesses can expect to reap. I'd like to focus on the four primary ones that follow for text economy.

#1 Improved marketing and more sales

Perhaps the single most significant benefit of CRM lies in pure marketing efficiency. Here, you may consider such practices and features as:

Better lead nurturing. CRM keeps track of customer interactions from the first touchpoint to the last. Through lead nurturing features, you may inform your outreach content and timing for more efficiency and upsell and cross-sell opportunities in the process.

Deeper customer journey mapping. Similarly, lead insights and interaction records directly help deepen your customer journey mapping practices. Through them you may optimize your sales funnel and ensure fewer leads drop off without converting.

Automation and prioritization. Finally, many solutions also allow customer service departments to automate responses to simple queries and prioritize more complex ones. This, too, can visibly improve both speed and quality, helping retain more customers.

While each business will employ such features in different ways, they all still present ways in which small businesses can benefit from CRM software in tangible ways.

#2 More productivity

Just as importantly, CRM can drastically improve productivity. Salesforce quantifies this as up to 34%, a massive number for any business of any size seeking growth.

This benefit does come as a holistic product of improved informational organization, but also from such factors as:

Less time wasted. Automation's primary benefit lies in less time wasted on mundane, repetitive tasks. CRM automation features can free up your employees' hands for more pressing, creatively demanding matters.

Less human error. Similarly, automation can drastically reduce the room for human error. Given how costly customer information errors can be, this benefit alone can visibly improve your overall productivity.

More precise insights. Finally, precise, consolidated insights help keep your employees and departments on the same page – and working toward the same goal. Automated reporting features also assist considerably in this regard.

#3 Enhanced customer service

Similarly, CRM explicitly seeks to enhance customer satisfaction, which increasingly relies on excellent customer service. Modern customers expect swift responses and quality interactions, which CRM can help provide in such ways as:

Interaction records. CRM keeps track of customer service interactions, which you may consult to enhance interaction quality. For instance, you may spot recurring patterns, which you may use to personalize your responses further.

Automated notifications and delegations. Many CRM solutions offer automated query notifications for customer service representatives regarding response speed. Then, depending on the query and the customer's history, they may also delegate it to the most appropriate agent.

Automation and prioritization. Finally, many solutions also allow customer service departments to automate simple queries and prioritize more complex ones. This can visibly improve both speed and quality, helping retain more customers.

#4 Improved customer retention

On that subject, a final, keyway in which small businesses can benefit from CRM software lies in customer retention. Customer acquisition famously costs up to 5 times as much as retention; no business can afford to overlook that truth.

In this regard, CRM's other benefits can culminate into improved customer retention – and, in turn, business prosperity.

More customer satisfaction. Customers deeply value personalized marketing, meaningful communication, and excellent customer service. CRM can directly augment all three and keep your customers satisfied between its insights tools and automation features.

Implementing loyalty programs. Similarly, loyalty programs still boast tremendous effectiveness toward retaining customers. CRM solutions can augment them through their features and ensure you don't miss such outreach opportunities as birthdays and anniversaries.

Re-engaging old customers. Finally, despite your efforts, some customers will inevitably fall off. When they do, you may consult your CRM solution to pinpoint precisely how and when you should re-engage with them to maximize your chances of success.

Conclusion

In summary, small businesses can benefit from CRM software in multiple ways. It can enhance marketing outreach, improve productivity, augment customer service, and even ensure higher customer retention rates. Of course, choosing the ideal solution for your business requires due diligence, as they will need different features. Still, the process will be well worth it in the end, especially in such complex, post-pandemic times.

This article was written by Nick Djurovic, CEO of Digital Dot New York. To learn more about Nick you can follow him on LinkedIn.