Sean Salas
By: seansalas
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What is a CRM System? And Why Your Business May Need One to Succeed

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Keeping track of customers is vital for the success of a business. A Customer Relationship Management (or CRM) system is a database that tracks a business’ interaction with its customers. The type of CRM system can vary from a simple excel data sheet tracking your customer interactions to a fully-integrated online system providing real-time information on customer data, marketing campaigns and performance. In this article, we evaluate the merits of having a CRM system and the different types of CRM systems that suit the needs of your business.

So do I need a CRM system?

If you operate a customer oriented business with more than a handful of clients, then your business needs to have a CRM system. By not having a CRM system, your business is not going to fail. However, your business will be at risk of not maximizing the earnings potential of its customers. Moreover, the business would be at a competitive disadvantage given competitors with CRM systems will know its customers better.

There are several benefits of a CRM system. The following outlines two key benefits:

  • Track Customer Interaction: Evaluate how your business is interacting with its customers. If interaction with your customers is 100% transactional (at the office or retail store), then you have a problem. Find new, innovative ways to interact with your customers through social media, newsletters, website, Yelp and events. Your customer will love you more for it. More love, more money.
  • Track Customer Performance: Tracking a customer’s performance allows you to maximize their earnings potential. Key data points you should track include: frequency of customer purchases (daily, annually), revenue and profit per customer, and new and lost customers.

How do I get started?

The rule of thumb here is start simple and then build-in complexity. At Camino Financial, our first CRM system started with an excel sheet. By starting simple, we figured out what were the customer data points we wanted to capture. In addition, starting simple helped us establish administrative procedures to track our customer information. Establishing processes to update a CRM system is as important as the CRM system. You may also want to consider using existing financial tools, such as QuickBooks, as a way to begin tracking customer performance.

Existing financial tools or an excel sheet will take you so far. A more sophisticated CRM system will give you more capabilities such as customer forecasting, mobile data entry and tracking, social media integration, and marketing campaign optimization. Depending on your CRM budget and type of business, there are many different CRM systems that may suit your business needs. If you would like to learn more, we encourage you to read the supplemental article to evaluate different affordable CRM options for your business.

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