What Can a CRM Do for Small Business

I started in a family business, and my journey with customer relationship management (CRM) began when I was helping my parents sell outerwear to clothing stores in Northern Europe.

I was a young rookie, tasked with what I now call New Business Development—though back then, I just called it sales.

I had a list of “leads” I had to call. Essentially, it was a list of companies sourced from the national company registry that qualified as clothing stores.

Long story short—it was a terrible job. My parents’ company was (and still is) selling premium products, yet my cold-calling campaign would constantly end up reaching second-hand stores. I didn’t like that, and I was looking for a better way to make those calls.

This is how I started digging into CRM, workflows, data enrichment, and so many other things I know now.

In 2024, it’s so easy to implement a CRM solution, and if done right, you can start seeing benefits fairly quickly. But what exactly are those benefits and how does CRM work?

Do You Need a CRM?

I can’t help but notice how many CRM vendors use a threatening narrative to sell their systems. They market it as though a company can’t survive without a customer relationship management and is on the brink of disaster, but just doesn’t know it yet.

That’s not true. Not all companies need a CRM platform, simply because their use case may not justify the effort. I firmly believe that not everyone benefits from a CRM.

Companies with older generations of employees or those inexperienced with computers would obviously need to invest much more time and resources to implement a CRM solution. Sometimes, it’s just not worth it.

The second category of companies that I think wouldn’t benefit from a CRM is ultra-small businesses, typically with just a few employees, where one person handles sales. Or businesses with so few customers that it doesn’t make sense to track interactions.

The effort of keeping a CRM up to date would simply be an effort for the sake of maintaining the CRM. That’s not a good business objective to begin with.

To finish my thought, I didn’t use a customer relationship management software until the second year of our company. We simply didn’t have enough opportunities to track, so I didn’t see the value in paying a CRM vendor to track what? Three opportunities that I already knew inside and out?

So, I encourage you to ask yourself: Do you really need a CRM? If you’re still unsure, maybe I can help you make up your mind with this article. Let me highlight a few reasons why small (or medium) businesses can benefit from a CRM, and how.

Bringing Transparency into the Pipeline

Before I jump into the first topic, let me give you a word of caution. CRM is not a solution; it’s a tool. It’s like a shovel. The shovel won’t dig for you, but trying to dig without it is a lot more difficult. You get the point.

The first and most important function of CRM tools is the so-called “transparency” function. In today’s competitive market, maintaining clear customer interactions is crucial for any business.

We all know how “great” governments are at “transparency,” and that’s exactly what we’re trying to avoid in our company. We want to know who our prospects are and what the forecast looks like. We want to focus on the prospects that need our attention the most at any given time.

A CRM system helps you record all your potential deals and organize them in a way that allows you to generate structured reports and visualize your sales pipeline. This is especially important for sales teams who need to understand their sales cycles to effectively manage leads and close deals.

If you have a few salespeople on your team, you can probably relate to this story.

I’m going back to when I was still working with my parents. We were sitting in the office of a partner who was supposedly selling our products to many stores. We were about to give that company exclusive rights for the region.

Thankfully, part of the deal was that we install our CRM software (we were using Salesforce at the time) and track the prospects they were working with.

We did this for two reasons: first, to prevent internal competition, since we also sold in the same region; and second, to verify the number of contacts and make the system transparent.

After running the first report, I realized our partner was working with very few opportunities. When I asked why so few, they just replied, “Not everything is in the CRM.”

A month later, I ran another report. The number of opportunities had increased, but still not by much. Eventually, we discovered they were sourcing leads from the same place we were, and most of the companies were already our customers.

Long story short, thanks to the transparency in the system, we were able to cut through the noise from the sales reps and ignore the “it’s not in the CRM” excuses. We ended up withdrawing from the deal that wouldn’t have benefited us.

But there are also fortunate cases. For example, just recently, I was cleaning up leads that had come through our website and found one we had never contacted.

I picked up the phone and closed a small deal. It wasn’t huge, but it was enough to cover a lot of our costs, simply because I had everything tracked and available in one tool.

This experience underscores how a robust CRM can not only enhance marketing efforts but also lead to more sales by ensuring that no opportunity slips through the cracks. By improving your business processes, you can significantly increase your chances of turning potential customers into loyal clients.

Increasing Sales Through Discipline

Another common narrative from CRM solutions vendors is that a CRM platform will increase your sales. That’s true—partially.

What they don’t always tell you is how it increases sales.

I learned, unfortunately, a bit late, that results don’t come from a “single action.” They compound over time through consistent effort. The more work you put in over a prolonged period, the more value you can accumulate later.

A great analogy is sports. A year and a half ago, I made a decision to change my lifestyle. I quit smoking and started running. My goal was to lose weight and get fit.

When it comes to losing weight, the only “diet” that truly works is burning more calories than you take in. So, I began running longer distances and doing more intense training.

After a while, I started feeling exhausted, tired, and didn’t have much energy to keep going. That’s when I decided to change my approach.

Instead of doing long, grueling workouts, I started incorporating small routines of daily activity. I made sure to do something active every single day.

Suddenly, my body began recovering faster, and I started feeling stronger. The same principle applies to sales.

If you try to do everything at once, you’ll burn yourself out. But if you spread your efforts over time, you can achieve remarkable results.

Now, how does CRM systems come into play here? Glad you asked!

Through reports and task management, CRM systems help build habits of consistency in customer interactions. Your sales team can dedicate time to specific customers every day, ensuring that no sales opportunities are missed.

CRM systems help you “remember” what you’ve done, lets you return to potential customers who need longer sales cycles, and enable you to follow up more consistently over time. By centralizing customer data, your team can access crucial information quickly, which streamlines processes and improves communication.

You can set a task to follow up with a prospect you might otherwise have skipped—a friendly call a year from now, for example. Now multiply that by hundreds of prospects, and suddenly you might close one extra deal. This approach not only increases your chances of acquiring new customers but also enhances customer loyalty as clients appreciate the personalized attention.

One extra deal here, one upsell there—it all accumulates and turns into growth.

A CRM won’t “boost your sales” in the way you might imagine. Instead, it will help you optimize your work by enabling workflow automation, ensuring you remember who to call tomorrow, the next day, next week, next month, and beyond.

I’m simplifying for the sake of explanation, but essentially, that’s how a CRM tool works. By implementing a CRM effectively, you can significantly improve your sales pipeline, turning leads into satisfied customers and ultimately driving more sales for your business.

Cutting Costs

Another benefit a CRM system can offer is cost cutting—but only if done right. No, let me emphasize this: IF DONE RIGHT.

Usually, when you hear claims about how digital solutions can cut costs, nobody tells you that you’ll likely need to spend a fortune upfront. And with the CRM software, that’s often the case. It’s an investment that could (or might not) help you reduce costs in your sales management processes.

How long does it take to close a sale for you? A day? A week? A month?

Depending on your sales funnel, a CRM software can help reduce the amount of time you spend on sales. This is achieved by carefully analyzing your sales data, defining a clear step-by-step strategy, and sticking to it.

In other words, you need to identify the sequence of steps required to close deals faster. A good CRM system helps you structure each opportunity with specific fields. 

For example, the next time you find a prospect, you’ll be prompted to fill in the “next step” field in your CRM. This will automatically put you in “thinking mode,” requiring you to consider the best course of action for moving the sale forward.

There are numerous studies supporting the idea that this seemingly simple step—thinking about and recording the next action—can significantly impact sales efficiency. It may sound almost too simple, but it works better than you might expect.

I won’t throw out specific numbers here, because without knowing your industry and business model, they would be meaningless. Quoting statistics without context would feel like making empty promises.

Another way a CRM software can cut costs is through lead management and automation. However, this is a bit of a double-edged sword, and more often than not, companies end up increasing their sales costs with automation rather than reducing them.

You can automate follow-ups with customers (which I rarely recommend, but it can be highly effective in certain cases). 

You can automate quoting, customer outreach, reporting, and even basic prospecting tasks. Even simply placing all available resources and customer data on one platform is a form of automation—it saves you time searching for scattered details.

Additionally, by using CRM tools to streamline processes, your sales reps can focus more on high-value activities that increase customer lifetime value instead of getting bogged down in repetitive tasks.

But be careful—automation is a tempting buzzword that can sometimes deliver zero value while costing you thousands of dollars.

You should only start thinking about automation when you truly know what you’re doing. And how do you know if you know what you’re doing? Simple—you just know.

Improve Retention

And finally, a customer relationship management can help you retain your customers.

If you don’t have a CRM solution, chances are you’re not keeping track of customer relationships, and you might not know exactly how many customer service issues you’ve resolved in the past month, quarter, or year. This could be a hidden opportunity for your business.

Let me share an educational story about one of our customers in the automotive industry.

Everyone in the automotive business knows you don’t make money selling cars—you make money on maintenance.

One of our clients, a car dealership, was in the process of implementing a CRM system. We helped them set up Salesforce’s Sales Cloud, and then we started working on the customer service aspect.

The first thing we discovered was the opportunity to create automatic service reminders.

Since we had a lot of data about each vehicle and already had the owner’s contact details, we were able to reach out 3, 5, and 9 months after the car was sold with service reminders.

This workflow automation boosted service appointments by 157%. It’s a remarkable number, by the way. We’ve had three projects in our portfolio with a 157% growth rate in different areas, but somehow, I keep encountering that number.

A small but thoughtful tweak to your processes can make a big difference.

You can also start tracking all customer issues and categorizing them. By the end of the year, this will help you build a clearer picture of the problem areas your customers are facing, ultimately improving customer satisfaction and contributing to customer loyalty. And, sometimes, it will even hint at a new product or service opportunity.

This is how we helped that same dealership launch a car rental service a year later. They analyzed their customer service inquiries and noticed a common request for rental cars—something they weren’t offering at the time. By using customer feedback to identify sales opportunities, they were able to expand their offerings and better serve their clientele.

Final Word

A CRM system can do a lot for your business—or it might not. If implemented correctly, it can be a powerful tool that helps you grow and improve.

But remember, no CRM tool is effective without a skilled hand. Be prepared to learn new things, change your habits, and introduce new routines.

The good news? You don’t have to reinvent the wheel. The industry has already identified best practices and pitfalls to avoid. You’re not alone in this journey. Feel free to drop me a line, follow me on LinkedIn, or schedule a meeting with me to discuss your specific case.

Oh, and did I mention the first consultation is on me?

Cheers,
J.