Most small businesses start out the same: a great idea, starting off slowly, and gradually building up as more customers come on board. Along with the growth in revenue comes the need for more tools and processes to manage the business overall. One tool that many small business owners find critical to managing their business is a customer relationship management (CRM) program, which can greatly facilitate sales. What many don’t realize is that in addition to managing the sales process, small businesses need a CRM to help with marketing. Here’s how.
What is a CRM?
A CRM is a technology for managing relationships and interactions with customers and potential customers. It helps companies stay connected to customers, streamline processes, and improve profitability. When people refer to a CRM, they are usually talking about a CRM system, a tool that helps with contact management, sales management, productivity, and more. A CRM solution helps businesses focus on a company’s relationships with individual people including customers, service users, colleagues, or suppliers. There are numerous CRMs out there, but the more popular ones for small businesses include:
- HubSpot CRM
CRMs to monitor marketing efforts
The above description would leave many to believe that CRMs are mostly effective for sales, but they have an impact on marketing efforts as well. Let’s take a look at how.
Track lead sources
Most companies use more than one marketing tactic, but how can you tell which tactic is bringing in the most leads? More importantly, which marketing tactic is bringing in the most qualified marketing leads; the ones that turn into revenue? A CRM is ideal for that by tracking by prospect where the lead came from. Lead sources may include:
- Email marketing
- Social media marketing
- Print marketing
- Trade shows
- Networking events
- Referrals/word of mouth
The list can go on and on, depending on what marketing efforts are currently being done. Understanding where leads come from not only guides you on where to spend more of your marketing time but can also help you better tailor your sales approach if you understand what resonated in the marketing message to begin with.
Personalize the marketing message and sales approach
As mentioned above, if you know where your leads come from, you can better personalize ongoing marketing messages and ultimately the sales approach. For example, if you know that your prospect came from a certain trade show, you can customize your marketing around that; homing in on the topics of the show or the pain points of the industry. Perhaps they reached out after watching one of your videos on YouTube: now you know what inspired them to contact you and can continue to market to them accordingly; information that can be shared with sales, so they can tailor their approach as well.
Aligning your sales and marketing efforts
CRMs help sales and marketing efforts work well together. As business grows, you’re going to need a way to ensure that all your marketing efforts are generating qualified sales leads and that sales isn’t wasting good leads by not understanding how you’re marketing. A good CRM will help with that. You want to segment marketing efforts based on need, industry, or whatever other driving indicators will induce a prospect to buy. You can keep track of all that in a CRM. Then sales can have a better understanding of what resonated with the prospect and adjust their sales approach accordingly. If both teams are working off the same information, they can work in conjunction with each other instead of at odds with each other.
Measure marketing ROI
CRMs are crucial to not only know where your leads are coming from, but which one of those leads convert to paying clients. Digging deeper, it can help you measure the ROI of your marketing efforts. Here’s how: let’s say that you spend $5,000 a month on video marketing. For those efforts, you got ten leads in one month. That’s $500 a lead. Now let’s say that out of those ten leads, you closed two new sales. That means your cost per acquisition is $2,500 per sale. Depending on what you sell, that’s either a VERY expensive sale, or a good deal. Does your company sell a one-time product worth thousands of dollars (like real estate)? That’s a good return on your investment. What about products like umbrellas? Not so good. What if you onboarded a client that will spend $500 a month and you know your average clients stay with you for 24 months? That was a good return. This is where CRMs are a critical component of your marketing efforts: not only knowing which tactics bring in business, but how profitable that business is. You can then decide if the investment in marketing was worth the result. Very difficult to do if you’re not tracking it!
If you’re a small business that’s considering onboarding a CRM, understanding how a CRM can help with marketing will make all the difference in how effective that CRM is. Not sure how to implement a CRM? Reach out to a small business sales and marketing professional to help.