How necessary is a CRM system and does every SME need it?

I speak from a slightly biased opinion in that I am already a convert to the benefits a CRM (customer relationship management) system can bring to an organisation.

But the overriding questions remain.

• Does everyone need a CRM system?

• Will a spreadsheet do?

• When should you switch from spreadsheets to a CRM system?

Over the course of my career, I have worked for, and with, companies who had a very differing opinion on CRM systems. Early in my career, I was thrown in at the deep end with a combined CRM and ERP (enterprise resource planning) setup supplied by IFS.

The old days

This was long before the days of cloud-based systems and the whole thing operated on a single server based at the head office. Logging into the system required a VPN connection and anything less than a perfect internet connection meant the VPN connection would dip and you’d have to start again. Couple this with an organisation that lived and died by the information within its systems, and not updating the system in a prompt manner was not an option.

I became a frequent visitor to the Golden Arches and knew all the restaurants I could visit that allowed me to park close enough to use the wi-fi and not have to buy things (there are only so many calories and coffee you can eat/drink as a travelling technical sales manager).

And now

In contrast, working for SMEs whose whole world revolves around multiple spreadsheets, that are linked together to the nth degree and at any moment, one wrong cell input, saving incorrectly or even typing too fast could bring the whole thing crashing down.

Backups were religiously managed and you dare not try to update spreadsheets remotely, in fear of being “the one” who brought the company databases down!

You’d think I’m being dramatic, but when spreadsheets are pushed to managing an entire business’s world, they require just as much looking and maintenance as a CRM system. A fact that many people forget when deciding to go the spreadsheet route for their business.

Does everyone need a CRM?

In short, no! Well, not immediately anyway. The benefits a dedicated CRM system can bring to your business are well documented.

The suppliers of these systems do a great job of promoting their plus points. Often there is a free version, which is carefully curated to give you just enough access to get the basics done but keep certain functionality for the paid subscriptions.

So ask yourself this question: Is your business dependent on volume of sales like a training provider or a supplier of products? Or will your business be low-volume, high-value consultancy work?

When advising businesses, I always ask them to focus on this question. It all boils down to being able to manage GDPR. Whether it is a free or paid version, CRM software has this in the bag; it takes care of a huge topic that requires very little effort from you.

Will a spreadsheet do?

In short, yes! Spreadsheets are incredibly powerful and can be used for a plethora of tasks. Creating a spreadsheet CRM takes no time at all if you have the know-how.

A significant drawback can be the data entry. Things can be made easier with formulas, lists and conditional formatting, but you cannot escape the fact that the data has to be entered somehow and this is time-consuming. Again, ask yourself the question: If your business is based on volume of sales, then you will need a larger and larger data set of contacts. How will you manage GDPR and how can these contacts unsubscribe from your mailers? Now suddenly you are managing an unsubscribed list and you will have to demonstrate how you protect these contacts from being contacted again.

As a footnote to the above, I would consider that when your spreadsheet experiences a hiccup, data is entered incorrectly or even worse, some data is lost. Remember that you are the IT and it is often for you to rectify. At the very least, with a CRM system, you have whole departments that can support you.

When should you switch from spreadsheets to a CRM system

Ultimately this is unique to your business, there are no set time scales with this. When choosing to go with spreadsheets or bite the bullet and go for a CRM system, consider these factors:

• How are your Excel skills? can you use formulas to automate some of the data?

• How many new contacts to your database are you adding each day/week/month?

• Do you intend to log communications with your clients and manage follow-ups?

• How will you manage unsubscribed lists?

If any of these feels like a huge undertaking, then I would advise biting the bullet and going for a CRM system. Work with the free version for as long as you can, this will help you to know exactly what CRM functions you really need help with, and what (for your own business) are unnecessary additions.

I know successful companies that have managed without, but it always involves the employment of staff to manage the tasks. A well-thought-out and efficiently managed system should provide you with as little stress as possible while returning significant gains.

Relevant resources

• Best CRM software for small businesses

• When to switch from spreadsheets to CRM

• Choose the right CRM system for your small business – business.connected