91% of companies with 10 or more employees use a CRM. In 2020, the global market for Customer Relationship Management (CRM) was estimated at $52.64 billion. By 2028, it has been said that CRM technology will be worth around $128.97 billion worldwide. However, most small and business businesses are unhappy with off-the-shelf CRM’s.
So what is all the hype about? Maybe you’re a small business owner who has heard that CRMs are far too expensive and aren’t a true necessity. You might be wondering whether or not it’s time to start investing in a CRM for your small business.
Today, we’ll be talking about CRMs, starting out by discovering their history, and discussing how useful they could be to your small business. We’ll finish by going over their issues and limitations. Let’s dive right in!
Some lessons to be learned: Monster.com
The first-ever customer relationship management software (CRM), Monster.com, was first published in 1998. Originally a job listings company based in Massachusetts, it had invested more than $1 million in the customized program. The prospect was revolutionary: allowing Monster.com’s sales agents to access prospective clients’ data from anywhere and anytime. It looked like they had a money-making tool in their hands.
However, things didn’t turn out quite as they expected. The new system they had built ended up being exceptionally slow. Users of the first-ever CRM program found themselves unable to even access the company’s databases’ customer information from their computers. As they tried using the million-dollar software, their machines simply froze. Monster.com was therefore forced to remake the entire system, from A to Z, losing their huge investment along the way.
In technology and innovation, 1998 seems like a long time ago, though the story of Monster.com does have something to teach us about CRMs. They can be an exciting promise, but there’s a lot that can go wrong – terribly wrong. If they do go right, they allow businesses to effortlessly compile customer data, recognize which the most valuable customers are over time, and grow the loyalty of clients through more customized services and/or products. Companies looking to use CRMs most often seek an overall smoother customer experience by streamlining processes and automating the most time-consuming tasks.
The promise of CRMs – why your small business might need one
Nowadays, a lot has changed since 1998. CRMs seem like a must for most businesses. They present a powerful underlying promise of allowing businesses to acquire a deep understanding of their customers and prospects, at the same time as providing a higher quality service. What is it exactly that CRMs can help businesses achieve?
Getting to know your prospects and clients
Knowledge is power, right? Some of the best CRMs on the market today offer the promise of utilizing your data in order to basically give you eyes and ears everywhere. They can take your business’s phone calls, email, social media, and any other source of data, and make it accessible to whole teams. This centralized data could help you figure out patterns and trends throughout your business, as well as understand better who your typical customer really is. Knowing your customer base better means being able to identify high-quality prospects and leads in the future, therefore tailoring effective marketing campaigns and furthering your reach.
Automating the mundane but important tasks
Not only do CRM solutions promise to keep your customers happy, but they also allow you to automate the most boring and therefore error-prone everyday tasks, whether it be for sales, marketing, or support. Your team will be able to spend way more time nurturing relationships with clients, and you’ll be able to eliminate those small mistakes that could cost you a potential customer.
For marketing, CRMs can automate marketing campaigns, by sending off materials and personalized messages to prospects over the most relevant channel. CRMs can also automate parts of the sales process like sending off thorough follow-up messages and/or emails. A prospect that is followed up on is one that is so much more likely to become a client.
According to a report dating back to 2018, poor customer service costs businesses over $75 billion every year. CRMs can definitely help resolve this problem by offering the automation of customer service and support. Some CRMs offer automated chatbots for example, which can offer extensive support and information to customers.
Why do some CRMs fail?
The striking statistics of CRM implementation failure
The research and advisory firm Gartner Group recently published a study estimating that 55% of all CRM projects fail to produce results. Consultancy and research organization Bain also published a survey in 2001 looking at management tools. The CRM tool ranked among the least satisfactory (in the bottom three, actually) out of 25 popular tools at the time. The same group, Bain, created another survey that asked 451 senior executives whether or not their CRM initiatives had been successful. One in five respondents answered that their CRM efforts had not been able to deliver sufficient growth and profit but instead had been damaging to their customer relationships in the long run.
By the way, here are a few surprising statistics about CRM implementation:
- Sales reps don’t like CRMs, they usually hinder them in the sales process, so they’ll end up using it as little as possible. In fact, sales teams spend around 18% of their time on CRMs (Forbes)
- 40% of companies don’t use a CRM at all (HubSpot)
- 49% of CRM projects fail (TechRepublic)
- 83% of senior executives say that their most difficult challenge is getting their staff to actually use the CRM software (Really Simple Systems)
- Different studies published in the past ten years say that between 25% and 60% of CRM projects fail to meet users’ expectations (GetBase)
Overly complicated solutions: the root of CRM failure
So, why do these CRMs fail? Well, good question. Experts like the Harvard Business Review have been trying to find an answer to it for decades, so it’s probably best that we don’t try and conclude on the subject here. However, Harris Kenny, founder of IntroCRM, has had a lot of opportunities to observe how businesses use their CRMs, and he reckons they are all just far too complicated for their users.
While he was consulting as a freelancer for different companies, he noticed that his clients weren’t keeping up with their sales tools. Those that they were using, like Hubspot CRM for example, were far too complicated to understand and to use, which resulted in teams never being able to make the most of their CRM tools. That is when he decided to create his very own alternative to a CRM.
The bottom line
There are many benefits to having a CRM as a small business. However, the issue is that it’s difficult to find a tailored solution. In business, there are so many variables that finding a one-size-fits-all solution can be a nightmare. That’s why here at LowCode Agency, we curate personalized solutions for small businesses. We can create your very own app for you to benefit from the most essential functions of CRM software. Book a discovery call with us today.
Jesus is the founder of Low Code Agency: a low-code development agency that allows small business owners to get their mobile and web apps done fast and cost-effectively while maintaining quality.