Small Business CRM

Small Business CRM – An Easy Introduction

Small business CRM (Customer Relationship Management) is not just about installing a flashy piece of software. You need to understand exactly what it is and if it’s right for your business. Let’s illustrate with an example.

Neil Fletcher had been running the family’s retail business successfully for five years since inheriting it from his father. Fletcher’s Dry Goods was not only a well-known landmark in the local area, but was also beginning to attract clientele from neighboring towns. Neil’s thoughts were now occupied with ways to take his business to a new level. The strength of Fletcher’s lay in their personalized service, which had helped them build long-standing relationships with customers. Neil wanted to reach out to a wider audience, yet retain that personal touch.


That’s when someone suggested he try Small Business CRM.


Since the founders of the business had always accorded special importance to their client base, customer orientation was very much part and parcel of Fletcher’s philosophy. Technological advances provided them with sophisticated tools to manage their customer information, and Fletcher’s goods were among the first in their county to adopt computerized data management. This put them in prime position to set up a customer relationship management system without expending extra effort to gather, sift and sort customer data.


If you own a business catering to a wide customer base that has a degree of homogeneity, it’s worth considering a small business CRM initiative at some point.


Customer Relationship Management has many definitions, but broadly, it is the usage of an electronic repository of detailed customer information to drive marketing efforts. Small Business CRM efforts require time spent in gathering, organizing and analyzing customer data on a continuous basis. This information is stored in the form of an electronic database, which makes it easy to retrieve, manipulate and draw conclusions. The power of CRM lies in its ability to target individuals or groups of customers with messages specifically tailored to their needs. For example, a bank might target communication about a new mortgage product to young couples in their thirties, but direct a similar message about college education loans to older couples with children.


Marketing campaigns using CRM systems are also called database marketing. These fall back on a variety of media, depending on factors such as budget, reach, customer preference, appropriateness, etc. Thus, you could employ a mailing campaign, or use a direct contact approach such as the telephone.


This brings us to the difference between direct marketing and database marketing. While both result in direct customer contact by marketers, the latter is notable for the attention paid to the analysis of customer data. Database marketers are likely to rely on data warehousing techniques to manage huge volumes of customer data and employ analytics and statistical methods to derive maximum insight from raw numbers. Further, they might build models that help refine customer segmentation and even predict behavior. This arms them with a better understanding of what value proposition they should make to each of their customer segments and improves the chances of marketing success.


So, is database marketing the exclusive preserve of large consumer goods companies? Not so. While a reasonably large customer base is desirable in order to make the effort economically viable, business-to-business marketers also employ this technique to good advantage. While consumer businesses are likely to have detailed information about their customers, such as buying history, preferences, and frequency of transactions apart from basic contact details, business-to-business marketers may have to rely on methods such as employing a sales force or using online contact to understand the end customers of their product. As far as marketing to prospects is concerned, both types of businesses can choose to purchase ready databases from a host of companies that sell them.


While small business CRM offers many advantages including a high return on investment if used the right way, it does face some resistance from the target audience. Issues regarding the privacy of information and solicitation of business have come under regulatory action, and database marketers must be careful not to violate any laws while launching their campaigns.

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