Are you aware of benefits and challenges of CRM?
These days it’s hard to imagine any business without CRM, especially among those who value organization and structure. With CRM, you can manage your customer relationships much more efficiently, keeping customer data, interaction history, notes, documents, metrics (and more!) in one place.
But every coin has two sides. While there are many benefits to using CRM, it does come with its own set of challenges.
Let’s look more closely at the pros and cons of using a CRM system.
The Benefits of CRM Solutions
CRM software has numerous benefits. Once you choose the right CRM, you can expect better revenue, better relationships, and better communication. Here’s how the platform delivers on those promises:
The ultimate goal of a CRM system is to drive sales and increase profitability. CRM facilitates revenue growth by helping you:
- Identify and target high-value accounts
- Prioritize leads that are most likely to convert
- Improve your speed to lead time, increasing the likelihood of closing
- Streamline the sales process to speed up your sales cycle
- Identify your most profitable sales strategies, marketing campaigns, and sales reps
CRM saves you money
On average, businesses that use CRM see an 87% improvement in sales.
CRM also minimizes costs by improving efficiency. Administrative and manual tasks can be automated by the CRM, allowing your employees to focus on their core job activities. CRM metrics can also identify bottlenecks in the sales process, underperforming staff, and non-converting campaigns in real-time. This lets you nip problems in the bud versus waiting until your quarterly earnings report to realize something isn’t working.
Collaboration tools keep employees and departments working in tandem, reducing the cost of discrepancies and redundancy.
73% of companies that use CRM report improved efficiency.
Better customer relationships
Employees get a 360-degree view of the client using a CRM. These client records contain far more than the usual contact details you’d find in a customer database. CRM creates an interactive digital record for each client. You can view social media profiles, the language they speak, their children’s names, and even their birthdays. With all this data at your fingertips, it becomes a breeze to personalize your connection with a contact.
The client record also lets you stay on top of every deal. At a glance, you can see:
- Contact history
- Past purchases
- Support requests
- Associated documents
- Web behavior
- Delivery status
With a CRM app, all of this information is available on the go. When you speak to a contact, you can demonstrate a deep familiarity with their account. This shows the client you’re invested in their business. In turn, they become more invested in your company and are more likely to become a loyal customer.
70% of purchases are based on how valued a customer feels.
Better customer loyalty and retention
A CRM system has many customer retention advantages. Task automation and reminders help you keep your promises to customers. You can also segment your contacts to find customers you haven’t been in touch with recently, so no one feels overlooked. Holding on to a current client, after all, is roughly seven times cheaper than finding a new one. CRM can also automate post-sale communication, so the relationship stays alive even after a transaction is complete.
A 5% increase in customer retention correlates with at least a 25% increase in profit.
Better protection of data privacy
The EU’s privacy law, the General Data Protection Regulation (GDPR), is designed to protect consumer privacy and give them control over their personal data–including how it is collected, used, and stored. Companies that fail to comply with GDPR’s strict regulations face steep fines.
71% of customers worry about their data security.
Your CRM acts as a record of interactions, perspectives, needs, notes, and contact details. The record is always current, as CRM is a cloud-based software. Teammates can quickly look at the records to deliver the best service and solutions. Furthermore, many CRM platforms have built-in collaboration tools that allow several individuals to work simultaneously on one file or track a document’s progress, such as a sales quote.
You can also have all of your communication channels feed into one platform. This keeps cross-channel communication organized and consistent. Customer information isn’t siloed between departments, employees, and software. It lives in one place that anyone can access with CRM.
78% of customers expect consistent interactions across departments.
Do business anywhere
CRM technology empowers people to work anywhere through the mobile CRM app. You have a range of productivity tools to develop, change, and collaborate on deals and projects, any time, anywhere. You can also respond to customers quickly, with the entire client record at hand. With CRM, business is never left on hold because you’re out of the office.
50% of teams improved their productivity using a mobile CRM.
The Challenges of CRM
CRM software has come a long way in the last decade, improving its ease of use, functionality, and affordability significantly. However, it still faces a few challenges, such as:
Overall CRM Cost
One of the most significant challenges of CRM implementation is cost. Even though some CRMs offer affordable and even free solutions, as your business grows, your needs grow. You will require more of a CRM system as you scale. This is where things can get very expensive, very quickly. Check the vendors’ subscription tiers before committing to any CRM system. You want to be sure it is still a cost-effective solution as you move to the more feature-rich tiers.
Aside from the cost to scale, you need to calculate the total cost of purchase before investing in a CRM system. This includes, but isn’t limited to, the following:
- Software subscription
- Premium upgrades, such as add-on marketing or reporting features
- Customization and configuration costs
- IT resources needed
- Hardware or software requirements
- Staff training and upskilling
- Cost of integration
- Cost of data migration
One of the biggest hurdles to CRM success is getting company-wide buy-in. It isn’t easy to find a CRM that offers equal functionality for every department. You may encounter resistance from staff who are saddled with a tool that wasn’t their first choice.
One way to sidestep this particular CRM challenge is to focus on the benefit to the customer. What tool will best serve your clients? Employees may grumble if they feel another department got the better end of the deal. But most staff can get behind a system that adds value to their customer base.
Patience is required
We live in an age of instant gratification, and our new software system is no different. We want it to work now! However, CRM is not an immediate solution. It usually requires time and training to experience the full power of a CRM.
You also need to be prepared to wait on your financial gains. Though companies receive an average return of $8.71 for every dollar invested, this can take years. Just recovering your initial investment typically takes 13 months.
Some managers make the mistake of seeing CRM primarily as a reporting tool-monitoring employee activity, call volume, and other efficiency metrics. This approach is bound to get push back from employees. They will view the CRM as a burden and be unlikely to participate. Lack of engagement also means that the data can suffer, as employees enter incomplete or even fictional information. This undermines the point of CRM as a single source of truth.
To avoid this roadblock, managers should sell the team on how the CRM works for them. Familiarize yourself with the benefits for the entire organization and advocate for the new system.
Finding the Right CRM For You
Roughly a third of CRM projects fail. Your likelihood of CRM success goes up substantially when you partner with a CRM consultant, like FindMyCRM. Without a trusted expert on hand, you’re more likely to be seduced by fancy features and pushy sales reps. By contrast, when you partner with a CRM consultant, you get expert advice without a vested interest. A quality CRM expert can discuss your business goals and translate them into the features and functions of the CRM system.
The Pros and Cons of CRM Software
After reading about CRM advantages, common issues, and statistics, we hope you can avoid CRM’s occasional pitfalls and find the right software for you. While no CRM is perfect, the most common issues can be avoided with the help of research, planning, and a CRM consultant’s guidance.
Need help finding the CRM right solution for your business? Contact our friendly team of experts today.