You’ve probably heard of customer relationship management systems, or CRMs. You may even be using some version of a CRM. But do you really know how to use this technology for maximum benefit?
“You can be too much of a data hound,” said Tim Musch, business development director of MarketSharp Software, which makes an industry specific CRM. “The question you must continue to ask yourself is what am I doing with the data?”
In today’s highly competitive and web-driven market, that’s a more crucial question than ever. In fact, experts say any business with at least five customers needs a CRM — a needs to know how to use it.
Why? According to information provided by Masonite’s Preferred Remodeler Program, CRMs lead to:
- More revenue. CRM projects yield an immediate increase of 8 percent in revenues, and a target growth of 16 percent within two years, according to the latest IDC study.
- Less sales cost. CRMs decrease these costs as much as 35%, the latest research shows.
- Better customer retention. CRMs increase customer loyalty as much as 27%, says a report from HubSpot.
To achieve these results, most CRMs rely on three main data sets: contacts (current or potential customers); opportunities (potential sales and past sales); and tasks (calls, proposals, emails, marketing and follow up), according to the Masonite PRP information.
Getting these data sets right is key to optimal CRM performance. That’s because while CRMs can seem like magic, they are only as good as their data, Musch said. Fortunately, many CRM providers offer training and support to get contractors started on the right foot, he added.
Once CRMs are working properly, they provide five key benefits:
- Generate more leads. CRMs provide numerous ways to generate leads. For example, a CRM can create a marketing campaign that showcases a completed project to a list of contacts in that geographic area to encourage neighborhood referrals.
- Convert more leads into sales. Lost leads are expensive. With CRM software, you can target lost leads with nurture marketing, or drip, campaigns that, over time, convert them into customers.
- Improve productivity. Having customer data everywhere you go is crucial. CRMs give you ability to access data anywhere, anytime and on any device. This access improves productivity — and customer satisfaction. It also allows you to better track progress of projects and your company as a whole.
- Increase repeat and referral business. Lack of follow up after a sale or project can hurt your chances for repeat and referral business. A CRM can create campaigns designed specifically to increase repeat and referral business.
- See what’s working. CRMs provide multitudes of data reports you can use to understand where your marketing efforts are working and where they’re not. You can apply those same methods to sales people.
Although CRMs offer many advanced features — from marketing rollouts to social media campaigns — experts like Musch say many contractors make the mistake of focusing on the advanced features, rather than the basics. This mistake not only leads to faulty data, but also over complicates the system, making it less likely for employees to use the software.
Once your team starts using the systems properly, CRMs can mix and match data sets on command. For instance, searching by customers will reveal not only their contacts, but also past sales and tasks. With that data, you can know whether customers or potential customers bought a particular product or service.
Having this information at your fingertips becomes incredibly valuable because surveys show that 60 percent of prospects who don’t convert to a sale do buy a similar project within a year. With a CRM, you can be sure to reach those prospects, Musch said.
For example, a follow up marketing campaign based 3,900 unsold leads in his CRM database produced $700,000 in annual revenues for Dale Bernett of American Home Improvement.
“The fact is that plugging the holes in your follow up bucket is infinitely more profitable than simply pouring more leads into your bucket,” Musch said. “The successful companies of the future will not neglect the importance of knowing their numbers.”
