10 Benefits of CRM Platforms for Small and Medium Businesses

A customer relationship management (CRM) platform plays a crucial role in your business’ ability to close sales. It’s also essential for running effective marketing campaigns and providing outstanding service to your existing customers. But if you’re doing your research on CRM, you might know it’s a bit of a complicated topic, with three types of CRM you could be looking to invest in.

We’ve tried to clear this up a bit with our overview of CRM examples. But, if you’re on the fence about whether to invest in the best CRM software, this guide is for you. We’ll highlight 10 top benefits of CRM platforms for small- and medium-sized businesses and explain how a CRM can provide an excellent return on your investment.

1. Increased Sales

Best for: Sales teams

The number one reason your business should use a CRM is that it can increase your sales and help grow your revenue. A CRM enables you to establish a repeatable sales funnel and helps you shepherd customers smoothly from initial contact to deal closure.

You and your sales managers can monitor how sales are going at each stage and jump in where it would make the biggest difference. This ensures that prospective new customers convert instead of dropping out due to hesitation.

In addition, some CRM platforms even help you plan out your next move to get deals to the finish line. For example, Freshsales offers AI-powered suggestions for specific actions to help land a sale, like sending a follow-up email to a highly engaged lead.

2. Enhanced Productivity

Best for: Sales, marketing, and customer service teams

A CRM also offers several ways to enhance the productivity of your sales team. This is a big deal since it means sales reps can approach more leads each day and devote more time to deals in progress to ensure they close.

Many CRM platforms enable you to set up automated sales workflows, eliminating repetitive tasks that would otherwise take up sales reps’ time. For example, your CRM can automatically send follow-up emails to leads if they don’t respond to an initial outreach email. Some CRMs also automatically scrape customer data from the web, saving your team time on research.

Your CRM can also ensure leads never fall through the cracks. You can use workflows to automatically notify managers when a lead moves into the deal negotiation stage, for example. And, you can set up automated alerts if a sales rep doesn’t respond to a customer within a certain amount of time.

Our guide to CRM use cases offers even more examples of ways this software can boost your team’s productivity.

3. Reduced Time to Close Deals

Best for: Sales teams

The time that prospects spend in your sales funnel is time they’re not generating revenue. Reducing the time it takes to move leads from contact to closing can help your business increase revenue and enable your sales team to move on to pursue new prospects.

There are two key ways a CRM can help reduce time to close:

• It can remind your reps to follow up with leads, helping to ensure there’s no downtime in your sales process.
• Some CRM platforms, like HubSpot, offer tools for generating quotes, negotiating deals, and collecting e-signatures. These tools can streamline negotiation and closing to ensure these final stages of your sales process don’t drag on for months.

Most top CRM platforms automatically measure the timeframe of each deal closure. This enables you to calculate an average and monitor how it changes in response to modifications to your sales process.

4. More Effective Lead Generation

Best for: Sales and marketing teams

Another way CRM software can benefit your business is by helping you find better leads that are more likely to convert. Many top CRM platforms offer automated lead scoring, which ranks leads based on factors like how similar they are to your existing customers and how engaged they are with your sales reps.

Lead scoring enables your sales reps to focus their efforts on high-probability leads who are likely to become customers. This increases your deal win rate and reduces the time and money spent chasing prospects who are unlikely to buy from your business.

5. Enhanced Customer Service

Best for: Customer service teams

CRM software can transform your customer service and ensure you deliver exceptional experiences to your existing customers.

Many platforms offer tools to help you set up multi-channel support, enabling customers to get in touch by phone, email, or live chat. Some also support ticketing systems that let your service team divide up requests and follow up with persistent issues.

Collaborative CRMs are particularly helpful for customer service. These platforms facilitate information-sharing between your marketing, sales, and service teams. This means service agents know what your sales team tells a customer during the sales process, which allows for personalized support based on all of your company’s past interactions with that customer.

6. More Effective Marketing Campaigns

Best for: Marketing teams

A CRM can provide valuable information about how effective your marketing campaigns are. For example, you can see which campaigns yielded the most high-scoring leads, then double down on that type of campaign in the future.

You can also use your CRM software to better understand your company’s audience. These platforms enable you to track data about your customers, including where they live, their age distribution, income, interests, and more. This information can help you market to new audiences or better focus your marketing efforts on your customer base.

7. Increased Customer Retention

Best for: Marketing teams

CRM platforms can also play a role in helping you retain customers and encourage them to become repeat buyers.

With a CRM for email marketing, you can segment your customers into groups and send highly targeted campaigns that encourage new sales. For example, you can offer a discount to loyal customers who have made purchases from your company multiple times in the past but haven’t bought anything recently.

Some CRM platforms also monitor social media sentiment around your company to see what customers are saying. This is a great way to have one-on-one interactions with customers and show your business cares.

8. More Accurate Revenue Forecasts

Best for: Sales teams and managers

Many CRM platforms use data about your sales process, including lead scores and past deal sizes to estimate your future revenue. Since this process is data-driven and based on the current status of your sales pipeline, CRM forecasts can be much more accurate than revenue forecasts you generate on your own.

This is important because you need accurate revenue forecasts to make big decisions. For example, you need to know how much money your business is going to have in six months or a year when deciding whether to hire a new employee.

9. Streamlined Collaboration

Best for: Sales, marketing, and customer service teams

Collaborative CRM tools can break down silos between your marketing, sales, and customer service teams. Sharing information between these teams is crucial to ensuring that all the customer-facing parts of your business are working together toward the same goals. Better collaboration can also foster new ideas for how to increase sales.

CRM platforms put all interactions between your business and customer into a single database, which enables communication history to be visible across departments. Employees can add notes to a customer’s digital file, potentially spurring ideas for how to market to that customer in the future or provide better service.

10. Ability To Grow Your Business

Best for: Managers

Having a CRM can make it easier to develop your business as your revenue increases. Your CRM platform can help you manage an increasing customer base without falling behind on customer support or giving up the personal touch your customers have come to expect. This ensures you don’t risk alienating existing customers as you take on new business.

In addition, CRM platforms are highly scalable, so you don’t need to change platforms as your marketing, sales, and customer service teams grow. You can easily add more employees to your CRM account. This is a plus since you’ll need additional customer service agents to support your new customers and additional sales reps to encourage repeat deals.

Is a CRM Worth the Price?

Purchasing a CRM for your business is a major investment. You can expect to pay around $144 per user per year for a basic CRM, or upwards of $300 per user per year for premium tools. If you have 10 employees across your marketing, sales, and customer service teams, you could spend several thousand dollars annually.

However, for the vast majority of small- and medium-sized businesses, investing in a CRM is well worth the cost. A CRM not only helps you land new sales but also earns additional business from your existing customers. It can also make your team more productive and effective, reducing your customer acquisition costs and increasing your retention rate.

Most businesses will also find that once their CRM is up and running, the software produces a positive return on investment. Say you spend $2,500 per year on a CRM, if that CRM helps you generate at least $2,500 in additional business, it will have paid for itself. Over the long term, benefits like increased customer retention and enhanced lead generation can increase your return even more.

A study from Nucleus Research found that for every $1 companies spend on CRM software, they generate $8.71 in revenue they wouldn’t have earned without the software. That’s a clear indicator that CRM software is a worthy investment.