By David Beard, Sage’s CRM evangelist

There has long been a misconception that customer relationship management (CRM) software is only suitable for large businesses, when in fact - regardless of size or sector, the benefits that it brings means it is business critical for any firm.

Over the past couple of years small businesses have faced a very challenging landscape, and one that will have lasting impacts on the way that they structure and manage their operations. The recession has not only focused minds on revenues and margins, but has also brought the importance of retaining customers sharply into focus.

Standing out from the crowd

A recent Sage UK Omnibus, which polled 1,500 small business owners, found that in the past year nearly one in five (18%) small businesses have missed out on a much needed sales opportunity through poor tracking of leads. The survey also found that 19% of entrepreneurs still rely on recording customers’ contact details manually in a note book, while 21% lack even the most basic processes for tracking sales leads and recording customer data. Put simply, without implementing effective CRM processes, SMEs will struggle to keep their customers happy, drive loyalty and differentiate their business.

Seeing customer needs clearly

CRM software helps firms to better understand, anticipate and respond more efficiently and effectively to their customers’ needs. This is done by tracking every detail about the customer and every interaction your business has had with that customer in a central hub. This easily accessible wealth of information provides employees from across sales, marketing and customer service divisions with vital information and enables a 360 degree view of their customer base.

The implementation of CRM within a business can have a number of direct benefits to the firm. Not only can the software help identify emerging buying trends, detect neglected or dissatisfied customers and gauge customer preferences, but it also can increase sales by enabling you to better time when you engage with prospects and customers. For example, by monitoring social media platforms it is possible to identify potential sales leads in real time. If you run a plumbing business you could respond to consumers voicing their frustration about problems with their sink. If it then transpires that the customer is too far away for you to help directly, offering some general advice or help in a quick and efficient manner will also help raise visibility of your company and increase trust in your brand.

Understanding what is right for your business

Spreadsheets have traditionally been used by some small businesses to record their customer details, but they are no longer sufficiently do the job. This is because when all the customer information is saved on to a spread sheet it tends to be saved, filed away and forgotten about. Keeping your customers’ details on a static document leaves your business vulnerable too more nimble competitors. Customer needs are ever changing and evolving over time and therefore businesses require an active system that can be updated easily. CRM software makes it quicker to find out about a customer and ensures everyone within the company can share this in-depth information.

Identifying that your business could benefit from a CRM system is the easy part. Making sure that your business selects the most suitable one will require some research into what different options are available and the business requirements. Initial investment of this time will help ensure that your business gets it right and will save the company a lot of time and frustration down the line. Adopting a CRM solution from a large vendor, such as Sage, who offer CRM software for both large and small businesses, means that a company can start out with the small business version of the tool and then move up to the more complex product if necessary. It means there is a clear growth path for your business which can be seamlessly transitioned. This should be a key consideration if your business is fast-growing and may need to scale up in the near-future.

It is also important to remember to evaluate what a potential vendor offers besides the actual software. Not many people start a business because they want to be an IT person, and if you are not overly familiar with software you should consider whether online help, training or support is provided. Investing the time at this stage will help ensure you get it right and save a lot of frustration down the line.