The global CRM market is expected to hit $37 million by 2017 – a massive jump from the last years “modest” $26.3 millions. In 2013 91% of companies with 11+ employees in staff had some sort of a CRM solution in place.
So what’s all this hype is about? Why global corporations and small businesses are wondering how to build a CRM system despite the hefty investments involved?
To answer this question and the one in the title, let’s start with the core basics.
What is a CRM and Why You May Need One?
Here’s a very simple analogy to explain this concept.
You are a very good friend and have around 10 other close mates, whose birthdays you remember.
You always send out thoughtful gifts and birthday cards. And, you keep in mind not only their anniversary date but also their address and gift preferences (e.g. Sally hates the pink stuff).
Now imagine, those 10 friends finally found the loves of their lives, got married and had kids. Your list has expanded to 30 people, whose birthdays, addresses and personal preferences you now store in your mind vault.
That’s exactly when the mess rolls in. You start to mix updates, forget to send out cards and buy inappropriate gifts e.g. a bunch of orchids for Melanie with an allergy. Oops. Your relationships become strained. You forget about some people’s birthdays completely and lose contact with them eventually.
Sure, we have calendars and to-do lists to remind us of the important things like this, but there are still the physical chores of going out and choosing a gift involved.
The same is true for small business in the early days. You have 10 clients you cherish and genuinely care about. Your follow-up, offer some sweet perks and keep your relationships up and striving.
Then your business starts growing. It’s no longer ten, but ten thousand customers you have in your database. Remembering the “small things” becomes nearly impossible. You start spending less time on the individual needs and continue investing heavily in growth.
However, quantity does not always equal quality. In fact, 80% of your current earnings are likely coming from the 20% of the top loyal spenders. Acquiring new customers costs your business 4 to 10 times more than retaining existing ones.
So how do you keep such a large, mixed bunch of people loyal and satisfied?
The simple answer is – with a custom CRM system place.
The Key Advantages of Building a Custom CRM System
(Instead of Opting for a Ready-Made Solution)
Customer relationship management can be summed up to becoming a customer’s best friend.
You are attentive, caring, always available for a quick chat and never fail to deliver exactly what they want from you (and sometimes even tend to over-deliver on your promises).
A custom CRM software is a powerful piece of technology to help you cope with this task even on a large scale. With this web app, you can effortlessly organize, store and automate all customer-related aspects of your operations – from marketing to sales and support.
It keeps your back covered for all the customer-centric problems, while you can focus on expanding your business further.
So why should you build your own CRM versus purchasing some of the existing solutions?
All of Your Business Demands Are Fulfilled
You can imagine the difference between a suit from a mass-market chain store and a custom-tailored one. The latter sits perfectly, does not crease in odd places and you personally chose those cool cuff buttons.
The same is true with CRM software. Pre-made solutions seem to be packed with a lot of features. Yet a closer examination often leads to unpleasant discoveries – the majority of those do not suit your business processes. Extra features often equal to additional complexity, which, in turn, means more time spent on CRM adoption, frustrations, and extensive staff training.
Here’s the deal – with a pre-made CRM you are likely to waste a lot of time on figuring out how to use the new bloated software, configuring and deploying everything and paying the top bucks for getting through all the features you actually don’t need. That is unless it’s something specialized and focused, like a Magento CRM system that’s made just for online retailers.
Maybe you should change your operations model to fit into the proposed CRM?
Nope. It’s cheaper to hire CRM developers to build a custom platform for you. You’ll save you and your team a lot of time and frustration, and receive the perfect business match in return. Employee training will take less time as well as the solution will be designed based on the familiar workflow.
Smart Automation and Smoother Integration with Business Operations
One of the main goals of your CRM is to eliminate repetitive tasks and routines (e.g. writing addresses for each birthday present).
Pre-made solutions are built with a limited set of features, which can cripple cross-department integration. For instance, the app can perfectly handle and store all the sales information – your customer order history, cumulative spending, shopping habits etc. Yet, it does not offer integrations for custom support. Your reps will have no idea whether they are dealing with a first-time buyer or one of the most loyal customers. This, in turn, may result in some costly mistakes for your business.
Your marketing team may have no idea whom they are selling to and hence, choose to target the wrong audience – again some funds waster down the pipe. Or you’ll have to force your sales department to create custom reports for marketing and support, which kind of doesn’t make your business operations smoother.
Suppose, you’ve got the point here.
Now, moving further – with automation. If you’ve been in operations for a while, you do know the secret sauce of how to keep your clientele engaged. You know the groups, who respond well to discounts for abandoned shopping cards and have some peak sales seasons in your calendar.
Obviously, you want to make sure the delivered custom experience is consistent and high quality.
Custom CRM solutions can automate the daunting routine your staff now faces – from onboarding to finalizing the sales. You can create custom templates to guide your team through the complex operations; reduce the common workflows to one click and stay assured that your business best practices are always followed without hawking over your team all the time.
Escape The Recurring Payments
Let’s talk money – developing a custom CRM can cost you roughly $50.000 to $500.000+ depending on your business scale and operations model.
Whoa, that’s a huge investment you say.
But let’s compare it to seemingly affordable pre-made CRM systems:
They are typically priced per user per month (or billed annually). While you have a team of 5 – that might seem reasonable. Yet, when you start to scale – the costs will scale with you.
Some quick math: the most decent Salesforce package suitable for small to mid-sized companies runs at $75 per user per month. Say, you have a team of 12 – that’s $900 per month and $10.800 annually. In 5 years – that’s $54.000. In 10 years – that’s over $100.000 spent on recurring payments you could have eliminated 5 years ago by choosing to build a custom CRM solution.
Pre-made solution still requires additional configuration. That means some overhead costs for IT support and regular maintenance – a few more thousands per year.
Excessive staff training and management overheads should be another regular line in your budget. Pre-made products may be harder to understand at first for your team as they are unfamiliar with the proposed workflows.
By adding up all these costs, you may end up spending more on an “affordable” pre-made CRM solution instead of putting that money into a customizable CRM to suit your unique operational needs, no less.