Can Customer Relationship Management (CRM) give your customers the TLC they need? Find out how small businesses can use CRM systems to effectively encourage and manage engagement.
In today’s always-on media culture, being able to effectively manage customer relationships is more important than ever. Customers now expect a prompt and personalised response, and to be able to communicate with you on a variety of platforms, which means that as a business it’s essential that you have the data you need at your fingertips.
You don’t need to have a huge team to support that. CRM systems allow companies to move away from static tools like spreadsheets, and towards more efficient and collaborative tools that provide greater access to customer information exactly where and when you need it – and this is especially crucial for small businesses.
For these companies, customer engagement is a top priority. In a recent survey we conducted, 97% of SMEs said customer engagement was “essential” or “important” to their business.
“Our research study has revealed that companies who make customer engagement a top priority are the ones who are experiencing the most growth,” says Glenn Woolaghan, Microsoft UK SMB Director.
“These findings come as no surprise – studies have shown that ‘fully engaged’ customers account for a 23% increase in average business income, whilst customers who are ‘not engaged’ or ‘actively disengaged’ result in a revenue drop of 1% and 18% respectively.”
Getting to know you
Having the right customer data plays a crucial role in maintaining positive levels of engagement.
“Building relationships with customers relies on getting to know the person you are speaking to. Keeping a regular document of contact with customers is vital. It means you can recall this information in future, which helps improve your service,” says Oli Saffell, business development manager of award-winning logistics provider Fresh Logistics.
Saffell says they approach customers through various communication channels and the key is to be original.
Doing this successfully requires detailed knowledge of your customers and prospects, says Hazel Theocharous, founder of small business growth consultancy Learn Grow Transform.
“By utilising a CRM system, a business owner large or small can ensure that they not only keep a track of their customers’ purchases, but they can create customer follow-ups, either to ensure their customers are happy or to remember a special occasion; who doesn’t like to be remembered and feel special?
“Another major reason to create a CRM in a business is to have the facility to upload all business cards and captured contacts over a long period of time. There may well be potential customers just sitting on an Excel spreadsheet or in a shoebox full of business cards, but until a CRM is created and contacts uploaded you may be missing out on that potential new sale or sales,” she says.
The hidden cost of bad data
Indeed, the statistics about businesses who don’t capture accurate customer data offer food for thought. Research from Experian Data Quality shows that inaccurate data has a direct impact on the bottom line of 88% of companies, with the average company losing 12% of potential revenue from wasted marketing spend, resources and staff time.
“To provide a unified view of the customer and generate timely customer insight, small and medium-sized businesses need to invest in technology,” according to our report on customer engagement.
“Many of those companies that don’t use a CRM system said they rely on Excel to maintain customer records, but this has major drawbacks. CRM systems are specifically designed to make it easy for staff to find the customer information they are looking for and unlike Excel, multiple users can update this at the same time.”
Almost half (47%) of businesses surveyed in the report on customer engagement said they use a CRM system to manage customer information, with take up highest among growing companies (54%).
Your CRM checklist
Hazel Theocharous lists her top five areas to check if you’re thinking about introducing a CRM.
- Data types: Before choosing your system, think about exactly what you need it to do. Do you need to capture sales as well as just contact information? Some business owners just want to capture a customer’s contact details, so as to follow-up and make notes of meetings, phone calls etc. Others need more extensive information to include time spent on a job and all sales information. Think carefully about what you need now and also what you might need in future before selecting your system.
- Categories: The data in your system might relate to potential, current and past clients, as well as a few you might want to treat as ‘VIPs’. A good CRM system will allow you to categorise your clients so that you can communicate with each group in the most appropriate way.
- Users: Look at whether your CRM allows you to allocate certain staff members to certain customers. If you are a larger organisation, you will have more users and more customers, so you want to ensure that the right staff have the right access; does the CRM you are looking at provide this facility?
- Cost: Price is obviously a factor when choosing a CRM system, so you’ll want to find out if there’s a monthly, annual or one-off charge. It’s also worth looking at whether the system you choose charges per user. Some systems offer free subscription up to a set number of contacts, so you should also work out how many customers you want to able to service with it and what that will cost you.
- After sales: As well as the tool itself, consider what the ongoing service support is like with your CRM provider. Are you going to be able to easily find an answer to a question you have when you are working on your CRM after 7pm, for example? This can easily be handled by seeing if the website has a good Q&A or a tutorial section. A good way to test this is to send a general enquiry message after hours and see how long it takes before someone answers you.
Ultimately, as with most things in business, your search for the right CRM system should start with your customers’ needs.
“Do you have a place where you store information such as your customers’ interests, important dates and previous purchases?” says Woolaghan. “If you don’t already then you should. Having this information to hand ensures that you are having relevant conversations when you talk to customers and allows you to share targeted messages and communications to them that is relevant to their needs and interesting to them – resulting in happy and engaged customers. Microsoft help businesses of all sizes to overcome this challenge.”
How does your customer engagement measure up to your business peers?
We surveyed over 200 UK small businesses to find out how different companies engage (or don’t engage) with their customers. Download your free copy of our Driving Growth Through Customer Engagement report to find out what your peers and competitors are doing and how you can better engage with your customers.
Click here to find out how Microsoft small business technology can help you to improve engagement with customers to support business growth.