The Benefits Of Customer Relationship Management Systems

This article on the benefits of customer relationship management systems is a guest post by Melissa Schelter. Melissa was an intern at Profitworks for 3 weeks in April as part of her business schooling at St. Lawrence College. Here is the article.


What us Customer Relationship Management?

Customer relationship management is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way.

What Customer Relationship Management Tools Can Do

In past years, it was difficult to track prospects and current customers with accounting and financial software, so small businesses started to use customer relationship management, in hopes of keeping their customers and drive future sales with the information given to them.


Many small businesses have very small staffs, for example, it is not uncommon for a business to have an owner who is also the accountant. If you are a small business owner I am sure you can relate to similar situations. It is because of this reason, and others, that many small businesses fall behind with customer relationship management (CRM) technology.


For small businesses, the best application of the CRM system would be to:

- Track customer data and analytics to see what customers are purchasing

- this data can then be used to suggest products and entice future sales

- Identify when, what and how often customers buy

- this data can be used to track purchase behaviour and trigger when to initiate sales and/or marketing efforts with that customer

- Track prospective customers to determine their sales readiness

- this data can be used to determine when to initiate a sales call to a prospect


What Customer Relationship Management Tools to Acquire First


So what does customer relationship management mean for small businesses? It could be something as little as setting up an excel spreadsheet to track customers, or installing an entire database.

Stuart Lawrence, customer relationship management consultant, suggests that smaller businesses should start with an off-the-shelf customer relationship management software program. Once the business is used to the system, they can tailor it to their specific needs. However, sometimes if the system is too complicated for the business, it can take up to three months before the users are up to speed. The cost of a system for a small business can cost from $7,000 to $35,000, not including user costs and training. This means you need to be aware of the benefits you will get from the system to ensure a positive return on investment. An alternative solution would be to build a system in excel or similar program first. This method will be less expensive but more time consuming.

The usual approach is to start small and build it up by adding additional features as you determine what information would be valuable to have. Sales tools are a popular place to start, because it is often easy to find out costs and the resulting benefits by determining the expected increase in sales or customer retention. It is easy to get caught up in all the neat things the technology can do. Try and remember though that CRM is about deepening relationships with your customers. So if you have a program that can do fancy things, but does not deepen relationships with your customers it will not be a good investment. It is easy to get caught up in cool technological features of some systems but often those features get in the way of building better and stronger customer relationships. For this reason be sure technology does not come before the customer experience as ineffective CRM systems will damage your business.


The Benefits of Customer Relationship Management Tools


Small firms invest in customer relationship management for three main reasons:

To improve business processes

- Efficiency

- organization

- effectiveness

- Compile financial results

- gather and analyze customer information

- Track what customers like

- Identify sources of customer growth

- you can then track how well your marketing efforts are working to help determine how you should focus your future marketing efforts


How to Use Customer Relationship Management to Get New Customers


For small businesses, the best application of the customer relationship management system would be to:

- Track customer data and analytics to see what customers are purchasing

- Track when, how often and if they repurchase from you

- To determine how to improve the customer experience


By managing all your current customers’ information, you can use it to determine where the majority of your customers are coming from. For example, a small Chiropractor clinic might take the geographic information of current clients that they have recorded and see that a large portion of new customers are coming from the Heidelberg and St. Jacobs area. The Chiropractor may then want to decide to focus any advertising and marketing efforts on Heidelberg and St. Jacobs, since people living in that area seem to be attracted to his office for some reason. This could be because there is a poor Chiropractor in those towns or a large portion of people in that area frequently drive by his office. Alternatively he may have the best pricing in the area. Determining the reason(s) would take further analysis but by targeting marketing to this area the business owner should be able to see a good return, given the trend he is seeing. This information is not fool proof but allows for a starting point to test, that will have a higher probability of success then starting from scratch.




By implementing customer relationship management into your small businesses, you can have the tools to understand your customers and your sources of growth. With this information you can make better judgements and decisions, which will result in more profit to the bottom line.


If a small business takes the risk of implementing customer relationship management technology, it can see higher revenues and lower operating expenses by getting jobs done more efficiently and meeting the needs of the customers better. With the advancement of technology, small businesses are able to implement customer relationship management easier than ever, given the vast array of customer relation management solution products. Implementing a customer relationship management system can improve any business, regardless of what you sell or how you operate.


Thank-you to Melissa for this article and for her work at Profitworks over three weeks in April.


My name is Chris R. Keller. I work at Profitworks Small Business Services helping various B2B small businesses in Waterloo and Kitchener Ontario generate new customers. If you are interested in generating new customers for your business to business, small businesses enter your email in the box provided below and click the "Send Me Free Updates" button.


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I hope you have found this article on the benefits of customer relationship management systems helpful. If you feel there is a term missing or would like a specific term added, just email us. Thanks for reading



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