What is a CRM?
A customer relationship management system (CRM) is software that tracks anything from incoming emails to the results of sales meetings to remind you of what has been said and done, to allow you to move your customer forward within the sales cycle.
Sounds like a lot of work
Sure, it can be extra work and that is the downside to most CRM systems. By default the big CRM system providers are designed and set up for management not the people on the ground trying to drive things forward.
CRMs can be extremely powerful however when you’re a growing startup and you’re still trying to find your customers.
3 key reasons why a startup should have a CRM
1) Customer retention
Churn rate is a massive killer to new, high growth startups anything to combat this is important. Having a CRM allows you to rengage your customers on a personal level more often and the information gathered / stored in a CRM makes the customer feel like much more of a person, rather than a number.
2) Better customer service
With your customer information and perhaps support tickets centralised you can support your current customers better.
3) Winning more new business
This is especially true in the enterprise market due to the longer sales cycles, building a working relationship and rapport here is vital. CRMs give you access to a wealth of information from both what you have collected and also what the CRM software is able to dig up online itself too. As you will see in the example below, this information is critical to increasing your chances of winning new business.
An example
You email 40 email addresses you have gathered from making 100 cold calls. You briefly noted in your CRM system the name of the person your trying to contact and their company. You also set up your CRM to automatically follow up with the prospect if they don’t email you back within 72 hours with a short, polite reminder message.
A couple of hours later a prospect calls you back directly and within two seconds you know his full name, his company information (which the CRM system has automatically pulled into the system for you from the companies name) and you see the note that you made about the fact that the prospect mentioned they were going for a game of golf when you called originally.
You chat about golf, then show some interest in his company and they are impressed with all the research you have done (you haven’t). The prospect feels engaged and as there is good rapport, they give your SaaS a shot.
This then happens again multiple times over the next few days as prospects pick up your email and reminder email and you win a bunch of new customers. All this for the sake of recording the prospect and company names in a piece of software, rather than on a spreadsheet.
Conclusions
Sure the above example may not happen everyday, but in my experience, as long as the CRM system is set up correctly for your goals (ie fast growth for a startup) then the small amount of time you invest in updating it as you go along pays massive dividends later on down the line.