Why CRM Matters: 9 Key Reasons to Embrace It Now

What is a CRM?

A Customer Relationship Management (CRM) system is a software platform designed to help businesses manage and improve their interactions and relationships with customers and prospects. The main focus is usually around the Sales team and their deals. However, as time has gone on, the scope of what CRMs are used for and the data that is captured has expanded. These systems have become so integral to business operations that the current revenue for CRMs in 2023 is about $79B and expected to grow to over $100B by the end of 2026.

Here are 9 reasons why your company needs a CRM:

Table Of Contents

1. Centralized Data

Centralized data ensures that all team members have access to the same up-to-date information. This consistency reduces the risk of data duplication, inaccuracies, and information that conflicts, which can occur when data is scattered across multiple systems or locations.

With centralized data, team members can quickly retrieve relevant customer or prospect information without the need to search through multiple systems. Team members can easily share and update account information, leave notes, and communicate through the CRM. All of this saves time and promotes team collaboration. 

As your business grows, you need all of your team’s data in one place. This makes it easier to scale operations than if your data was spread across multiple siloed systems. New users can access team activity, contacts, companies, and deals, within the CRM. This helps to get people up to speed quickly in an organized fashion. It means that your new team members can contribute more quickly than if data were all over the place.

2. Track Team Activity

Team activity within your CRM can save time and foster collaboration among team members. When you log emails, add notes, and schedule meetings within the system, it enables others to see this activity. This transparency helps your colleagues to avoid duplication of work and needless meetings and emails where everyone asks for updates; it’s all in the system. This saves time and effort.

When accounts change hands, multiple team members need to get together to discuss their knowledge of the customer or prospect. They share contact information, relevant documents, recent communication, and more. However, when your entire team tracks activity in your CRM, it means that you can have seamless handoffs without all of the long meetings. As a side note, you may still want to meet to do a handoff if possible, but keep it short and to the point.

Overall, team activity within a CRM system promotes collaboration, knowledge sharing, and efficiency.

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Companies, Contacts, and Deals

The crux of most B2B (business-to-business) CRMs is the ability to track companies, contacts, and deals as they relate to one another. Companies are the accounts that we look to target. Contacts are the individuals that are part of companies who we actually interact with. Deals are the collective interest by a company and their contacts (may be 1 or many people) to purchase your products or services.

3. Track Companies

As noted above, it’s essential to track companies in your CRM, especially for businesses that engage with B2B clients or have complex customer relationships that involve multiple contacts. 

When we input companies, and associated contacts, into our CRM, it consolidates all of the interactions and high level details (e.g. company size, company location) into one central location. 

Within a company, there are often various decision makers, influencers, and end users that are involved in the buying process. A CRM allows us to track these contacts under the umbrella of one company, which helps to easily manage and keep an eye on the key players.

On another note, when we track companies, we can parse them out based on size, location, industry, and other key criteria. This is extremely valuable because it permits us to tailor marketing efforts, create sales segmentation, and filter our customers by the aforementioned criteria.

Lastly, as businesses grow, it becomes increasingly complex to manage all of the companies we want to keep tabs on. A CRM is designed to house your data, help you segment, and track the associated contacts, deals team activity, and more. All of this leads to more efficiency, so your teams can focus on their areas of expertise such as selling and marketing to customer.

4. Track Contacts

We track contacts in our CRM for several reasons. Firstly, these systems allow us to create detailed profiles for each contact. This includes contact data, communication history, purchase history, preferences, and more. When we have a comprehensive view of each contact, it helps us to better understand our contacts.

With accurate contact data and interaction history, we are able to personalize communications and interactions. This is especially helpful for marketing when they set up automated campaigns. Personalization enhances the customer experience because it shows that we understand and value each contact as an individual.

Remember that contacts represent potential opportunities. A CRM can help us to categorize and qualify contacts, just as we did with companies, which helps us to identify and prioritize those with the highest potential to purchase.

In a sales context, we must track contacts. As noted in the Track Companies section above, contacts that are part of a deal can be decision makers, influencers, and end users. It is essential to understand who our key players are in relation to our deals. 

5. Track Deals

Sales Deals are the lifeblood of almost every business. We need to keep track of the deals that sales works on, which ones are won, which ones are lost, how long it takes to close deals, why they were won or lost, and more. Deals in a CRM provide a centralized platform where everyone in the organization can see all of this data. This transparency helps reps, managers, and other teams stay informed.

Another key aspect of deals in a CRM is the ability to easily visualize our sales pipeline. When we track deals at various stages (e.g. prospecting, qualification, negotiation, closed won, closed lost), which you absolutely should do, we can see deal progression. With this data, we can see how long deals have been at each stage, how much they are worth at each stage, and more. This vital data helps us to identify potential bottlenecks, see which opportunities properly move through the funnel, and what our future revenue and cash flow might be.

On a similar note, when we capture sales activity in our CRM, we can see deal size, win rates, conversion rates, and more. This data can provide valuable insights into what works and what needs improvement in your sales process. Deal data in your CRM permits you to make data driven decisions to customize and optimize your sales strategy and tactics.

6. Reporting

In the previous 3 sections, we discussed why it’s important to track companies, contacts, and deals. While we touched on segmentation and data analysis, we need to understand how to use that data. 

Reports allow us to measure the performance of sales and marketing efforts. We can track KPIs (key performance indicators) such as closed won deals, conversion rates, and lead generation. Furthermore, in a system where data is properly tracked, we can report on all of this by month, quarter, or year. We can run company, contact, and deal reports by rep to see their activity. We can run reports on campaigns to understand marketing efforts as related to sales. The list goes on, but the short version is this: Reports provide insights that help to guide our decisions and help us track performance and progress toward our goals.

7. Automation

Many CRMs offer the ability to automate tasks and processes that would otherwise be done manually. Some systems are designed with marketing in mind whereby we can set up email marketing campaigns to nurture leads. Many CRMs enable you to automatically assign leads based on location. Other types of automation include, but are not limited to data entry (e.g. company data gets automatically filled out based on their domain), customer support (e.g. tickets are created and assigned out), and reports (e.g. can set up daily, weekly, monthly reports to be sent to team members).  

Automation within a CRM system can streamline your processes, increase efficiency, and improve customer engagement. 

8. Additional Functionality

There are a ton of great one off tools available on the market today. However, there are many CRMs that have these functions built into their system. Consider a CRM that has additionality functionality if you are on the hunt. Below are 3 examples of additional features that you can find within some CRMs:

Customer Support

When we have a CRM with built-in customer support, it helps to centralize the location of our customer interactions. It enables teams to access a complete history of customer interactions to provide more personalized and efficient support. This integration also facilitates collaboration between sales, marketing, and support teams for a more knowledgeable workforce, which can lead to high quality customer experience.

CPQ (Configure, Price, Quote)

A CRM with a native CPQ feature empowers sales teams to quickly and accurately generate pricing and create customized quotes and proposals based on their customers’ and prospects’ needs. This reduces errors, speeds up the sales process, and enhances the overall customer experience because you can provide timely quotes.

Invoices

Invoices that are an out of the box feature within a CRM streamlines the billing process. It enables you to create and send invoices directly from customer records, which reduces manual data entry and minimizes errors. Invoices in our CRM can help to save time because teams can track financial transactions alongside the other customer data we already have in our CRM.

9. Industry Specific CRMs

Just as there is additional functionality as noted in the section above, there are also industry specific CRMs. While the items that we went through above are the essentials that we want, consider your industry and not just what you want captured, but how you want it captured, and of course, why you want it captured. 

Industry specific CRMs have different capabilities, work flows, features, and can be designed to work in a similar fashion to how you operate today without a system. These tools try to mimic industry standard best practices and processes as best as possible. 

Take a look to see what exists in the market for your industry beyond just the big names that are designed for mass appeal. You may find that little customization is needed because the tool may work quite closely to how you want. This means that implementation and user adoption may be easier than you think (disclaimer – that is by no means a guarantee). You may also find that customer support is more helpful because they understand your needs.

Wrap Up

As we saw above, businesses need CRMs to centralize customer information, and interactions. These systems can provide valuable insights, enhance collaboration among teams, and optimize sales, marketing, and customer service processes, which can ultimately lead to improved customer retention and revenue growth.

CRMs are designed to help businesses manage and improve their interactions and relationships with customers and prospects. As we discussed above, the scope of what CRMs are used for and the data that is captured are essential to have a smoothly run operation. 

If you are in the market for a new CRM, whether it’s your initial purchase or a replacement, check out the next post, 7 Great Moves To Make Before You Buy a CRM.