If there were a way to take your small business to the next level, you probably would, right? With a customer relationship management (CRM) strategy, that’s exactly what you can do. Not sure what that means or even is? No problem — the Lenovo Pro Community has you covered.
Let’s delve into CRM using a fictional example:
For illustrative purposes, let’s say you are a popular and beloved restaurant who’s been serving authentic Mediterranean cuisine for more than a decade. Staying in business all these years, including surviving the pandemic, is no small feat. There is reason to be proud, but you also know that new challenges abound.
While you’re relatively well known in the community and have a loyal customer base, new restaurants, (including those that serve similar cuisines), have made for fresh competition. And although your menu and dedication are undeniable, residents new to the area might be unaware of this fact. Add to that, the economy which is putting the squeeze on discretionary spending no matter the diner.
However, time is limited and you’re in the business of food, not necessarily gathering and analyzing the data required to support an effective new customer acquisition and retention campaign. With these factors in mind, this is how a CRM strategy can help your small business, restaurant or otherwise.
The Small Business 101 Guide to CRM
What is CRM?
As we’ve already identified, CRM stands for “customer relationship management”. Most often, the word ‘software’ follows CRM. That’s because to ensure a robust and effective CRM strategy, you’ll need some sort of tool (software) to help you manage and track the relationships you have with your customers.
From a high level, a CRM solution allows you to store all the information you might have about your customers, such as their first name, last name, birthday, email address, and when and how they’ve interacted with your business.
Using our restaurant example, your CRM tool could tell you that a certain guest dined at your restaurant five times in the past three months, and one of those times, they used the special birthday offer you emailed them right before their birth month.
Using a benevolent spider web as an analogy for a CRM strategy, think about it like this:
Just as a spiderweb is constructed to catch insects, a CRM tool is designed to capture and manage customer information. The strands of the web represent all the different touch points between your business and the customer — touchpoints that can include emails, phone calls, social media interactions and in-person visits. Each of those strands captures valuable information about the customer such as their contact information, preferences, and behavior.
Just as a spider maintains its web, a CRM tool continuously monitors and tracks customer interactions and behavior, identifying new leads or opportunities.
How CRM can help your small business
Wondering how this web of insights can help — not overwhelm — your small business? Using our Mediterranean restaurant as an example, read on to see how a CRM can help your business:
1. Improve Customer Retention: Without a CRM system in place, the restaurant would have limited information about its customers, such as their dining preferences, contact information, and any feedback they may have provided. Without these insights, it would be difficult to personalize their dining experience, incentivize a return visit or execute targeted marketing efforts.
By managing customer data and understanding customer preferences, you can tailor your products and services to meet the needs of your customers. Do this and more than likely, you’ll increase customer satisfaction and loyalty, ultimately growing customer retention.
2. Increase Efficiency: In the absence of CRM, marketing occurs the analog way. To reach potential new customers, our restaurant would have to rely on traditional marketing methods, like print ads and flyers. Not only is this a one-way street of no information coming back to you (Did anyone see the flyer or ad? If so, whom? Did they act on it?), who will distribute all those flyers? The time, money, and literal legwork required is highly inefficient and delivers little measurable ROI.
When you leverage a CRM tool, you can automate many tasks, putting email marketing, lead generation and customer service on auto pilot. This saves time and resources, allowing you to focus on other important tasks.
3. Boost Sales and Marketing: When you know which customers frequent your restaurant on Tuesday for family night or Sunday for brunch, you can create marketing campaigns targeted specifically for them. This could be as straightforward as an email campaign or an Instagram ad.
If you have staff dedicated to marketing and sales, your CRM strategy will help establish a hand-off process of leads and follow up, ensuring the customer is contacted in a timely and appropriate manner based on the insights you’ve gathered.
When you understand (and capture) your customer’s behavior, preferences, and buying patterns, you have exponentially more opportunities to improve marketing strategies and campaigns and help your sales team increase revenue faster.
4. Improved Collaboration and Customer Service: It can be challenging to keep track of customer interactions, especially the ones that take place online. (This is also the kind of information that any small business owner would want to be made aware of.) When a customer takes the time to provide feedback (whether positive or negative), responding appropriately and in a timely manner is crucial. Without any sort of CRM system, this communication can get lost which might turn away a new or even loyal customer.
In the absence of a dedicated social media staff, it’s possible that no one is monitoring online comment boards or social media accounts for mentions of your business. A CRM tool can do this for you — alerting the people who need to know so they can take the appropriate action. If your business does have the benefit of a more robust team, a CRM solution lets multiple staff or departments access and share customer data, leading to improved collaboration and communication.
Without a CRM tool or strategy, our restaurant would have a tough time providing guests a personalized experience. To compensate, they would likely turn to traditional marketing methods which could find them struggling to compete with other restaurants that have implemented a CRM strategy in place.
However, as a spider with a well-maintained web is able to catch and hold on to its prey, so can a strong and effective approach to CRM. Enter the CRM strategy.
A step-by-step guide for setting up a CRM strategy
Developing a CRM strategy can seem overwhelming but it doesn’t have to. Here are some steps to help you get started:
Step 1: Define Your Objectives
First things first — save time and define your objectives. What do you hope to achieve? Do you want to hold on to your customers longer, increase their satisfaction, or drive revenue growth? Having a clear understanding of your objectives will help you choose the right CRM system and create a strategy that aligns with your business goals.
Step 2: Choose a CRM Solution
Once you’ve defined your objectives, you’ll need to choose a CRM solution, of which there are many. CRM solutions range from simple and affordable options to more complex and expensive solutions. It’s important to find that sweet spot of not being too bare bones but not being so overly complicated you need an IT admin to manage it for you.
Ultimately, to identify the CRM solution that’s right for you, you need to know what features and functionalities you need. Again, this is why it’s important to follow Step 1: determine your objectives. Finally, consider your budget and confirm that the solution you choose will play nicely (integrate) with any other tools you may already use, such as email or social media automation.
The best CRM for your small business? It’s the solution that not only streamlines pursuit of your CRM objectives but also provides insights so you’ll know where (and how) to make adjustments in your strategy. With a solution like this in place, you’ll be on your way to saving time and money as you gain more new customers and grow revenue.
Step 3: Collect Customer Data
Information about your customers is the lifeblood of any CRM system. Keep in mind that the quality and quantity of that data will determine your end result. (Remember GIGO? ‘Garbage in, garbage out?’ It’s the same principle here.)
Returning to our restaurant example, to get a complete view of their customers, the CRM tool would collect customer data such as name, email address, phone number, and dining preferences, including favorite dishes, seating preferences, and dietary restrictions. If the CRM solution includes automation, it can capture this data automatically across multiple touchpoints, including your website, social media channels, email marketing campaigns, and in-person interactions.
Step 4: Analyze Customer Data
Now that you have the valuable resource that is customer data, you need to analyze it. Doing so lets you gain insights into your customer’s behavior, what they like (and don’t), and what they want and need from you.
A solid CRM solution will serve views of different data, for example, the number of people viewing an online ad you’re running and what kind of device they viewed it on. ‘Number of clicks’ is another helpful measurement a CRM can deliver, letting you know how your marketing efforts are performing among your targeted customers. As you analyze the data, you can look for patterns and trends, and use this information to personalize your customer’s experience and better target your marketing.
Step 5: Train Your Team
If data is the fuel for your CRM system, the people using it are the driver. If they don’t know how to use the CRM solution you’ve implemented, you won’t get very far.
Make sure your team is trained on how to use the system and how to interpret customer data. Encourage them to use the CRM system consistently and to provide feedback on how it can be improved. Their ease of use can mean the difference between simply storing data and using it to grow revenue and sales.
Step 6: Improve Your Strategy
A CRM strategy is not a one-time event; it's an ongoing process. By continuously monitoring and analyzing customer data, you can use that information to refine your CRM strategy over time.
For example, you can test two versions of an email subject line or an offer to determine which performs the best. After the campaign ends, you can analyze the results and based on your findings, change (aka ‘optimize’) your content or CTA accordingly. The beauty of a CRM tool is that you don’t have to guess or assume — you will have data to guide your decisions.
By following these steps, your small business can set up an effective CRM strategy that helps improve customer relationships, drive revenue growth, and increase customer satisfaction.
Is your small business interested in learning more about customer relationship management?
We understand the topic can get deep pretty quickly so if you want to delve into the topic further, let us know! If you’ve already implemented a CRM solution, we’d like to hear about your experience, too. What advice do you have, if any, to other small businesses considering implementing one? Drop us a line in the comments below.
If you have other ‘back-office’ topics you’d like us to cover, drop a line in the comments. We want to know what’s working for you and what you want to learn more about.
About the Author
Stephanie has worked in the B2B tech space for more than 20 years for brands such as IBM and Oracle, as well as on the agency side at Uncompany, The Favorite Co., Ogilvy and Mather, Leopard and other agencies. Stephanie believes in putting the reader first and won't rest until she's communicated a motivating, "Why should I care?" message. When she's not writing on behalf of her freelance clients, in her spare time, Stephanie's working on a novel and the occasional poem.