What businesses and organizations should use a CRM - and which ones shouldn't?

Image credit: Pixabay (Image credit: Pixabay)

Considering the raft of articles outlining the best CRM software, extolling the virtues of features like lead generation, contact management, and AI analytics, it would be understandable if you assumed every business would benefit from a CRM.

However, in reality, CRM software is entirely dependent on a company’s needs. Some, like insurance firms and real estate companies stand to benefit hugely from CRM solutions. Others may not need many of the features contained within a CRM - or any at all. 

Some business solutions, like cloud storage, are more universal and likely to be of use for any and all organizations. Others, like business intelligence tools, accounting software, and, of course, CRM platforms are more company-specific. That hasn’t stopped some businesses from getting caught up in the hype and jumping aboard the CRM bandwagon.

That isn’t to say that CRM platforms aren’t extremely useful for the right businesses. They include a range of useful features like pipeline management, a centralized database of contacts, customer segmentation, and sales reports. This functionality can boost customer retention, increase sales numbers, and improve sales productivity.

So before any business looks at the various CRM solutions on the market, they should think carefully about whether they are ideally suited to this type of business software. To clear things up further, the below guide explains the kind of businesses that should use a CRM and those that shouldn’t. 

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What businesses and organizations should use a CRM - and which ones shouldn't

Reasons your business should use a CRM

Woman placing a customer order in a shop

(Image credit: Shutterstock)

There are a large number of businesses that absolutely should consider using a CRM - of they are not already doing so. There’s a wide range of choice on offer, including cloud CRM software, open-source CRMs, small business CRM solutions, and more. A lack of variety is certainly no reason to forego the use of a CRM in your organization.

To clarify exactly the kind of businesses that should use a CRM, we’ve outlined some of the most prominent benefits to come from this business software - and the organizations most likely to need them. 

1. Manage a large number of customers

CRM solutions are all about customers so it stands to reason that businesses that have interactions with the highest number of customers are most in need of them. Companies in hospitality and retail, therefore, are some of the most obvious candidates for CRM usage. 

Creating the perfect relationship is difficult enough when you’re dealing with one customer. If your sales and marketing teams interact with hundreds or thousands of customers, things can get very confusing, very quickly. And frustration can build fast when a businesses doesn’t create a positive experience for the customer immediately - and then sales suffer. 

CRMs are great at contact management and creating a database of all your customer information - no matter how many of them there are. This provides clarity to a situation where the sheer scale of a company’s customer base can become overwhelming. Regardless of communication method or customer geography, CRM tools allow businesses to track, manage and engage with large numbers of customers. 

Growth is desired by most businesses, but it can create challenges. With a CRM solution, businesses needn’t be worried about whether they can handle an increasingly large numb er of customers. Instead, CRM software means that sales and marketing teams can focus on adding value, and forging the best possible customer relationships - for each and every one of them. 

2. Align marketing and sales teams

Are you the sort of company where marketing plays an important role? Have you noticed a disconnect between your marketing and sales teams? If this is the case, it sounds like you are in need of an effective CRM solution.

Marketing has grown in importance for many firms but there are still particular industries that rely on it to generate sales more than others. Electronics firms, for instance, form part of a hugely competitive landscape, with each business trying to convince consumers that they need another tablet or a new SSD. For these firms, it is essential that there is total alignment between their marketing and sales teams. 

Opportunities for misunderstanding or miscommunication can easily turn into missed sales. Workplace silos are the enemy of a smooth-running sales strategy, so CRM solutions are especially important for ensuring businesses work as holistic entities with everyone moving in the same direction.

With a CRM, all your employees can cooperate and share information about leads, improving efficiency and sales productivity. Collaboration is fundamental to why many businesses decide to start working with a CRM platform. Plus, with the growing importance of hybrid work, this collaboration needn’t take place solely within the confines of the office. This means that for any enterprise with multiple offices, or even if a firm is just in need of a small business CRM to foster home-working, CRM tools are hugely important.

3. Improve customer service

woman working at a contact center

(Image credit: Shutterstock.com / Atstock Productions)

Customer service can prove crucial to retaining the customers that a company has already acquired. Should a question or issue arise, it’s important that organizations are able to respond quickly by providing a personalized response. Any suggestion that a business doesn’t really know who a customer is or why they’re calling could push them toward a competitor. 

For any company that operates its own contact center, therefore, or makes use of a third-party service, CRMs can prove hugely helpful. They can store information about all previous customer engagements, regardless of what channel they’ve been made across. The omnichannel nature of modern business means that customers are just as likely to interact with an organization via WhatsApp as they are email so companies must be able to track and connect communications wherever they come from. 

CRMs also enable businesses to direct customer queries to the relevant agent, ensuring teams make the optimal use of their different members. Similarly, when a human agent isn’t available or necessary, CRM tools can incorporate virtual assistants or live chat functionality. However you prefer to offer customer service or however your customers prefer to receive it, CRM tools should deliver the flexibility to make any interaction better. 

4. Understand your audience

Any company's audience is made up of numerous different customers - each with their own wants and needs. As such, businesses have to be able to drill down into their customer base, recognizing individual needs rather than just broad trends.

Any company that has customers from a broad demographic range, for instance, is another type of business that could benefit from a CRM. This is because CRMs are great for audience segmentation. Data fields, filters, cross-referencing, and other features can all help businesses categorize customers, identify leads, and reach out to subsets quickly. 

It can be difficult to visualize customers for many businesses but CRMs can help you create customer profiles that provide some much-needed clarity. At a glance, agents can see a customer’s purchase history, previous interactions, and any known demographic data. New purchases can be recommended based on this information or marketers may identify previously unforeseen trends.

5. Foster growth

Two people video conferencing with others on a screen.

(Image credit: Shutterstock / metamorworks)

If businesses are scaling quickly, it likely means things are going in the right direction but it is unlikely to mean everything is perfect. Speak to any startup and they’ll tell you that growth, while desired, can be accompanied by challenges. How can businesses keep tabs on fast-rising customer numbers and sales team members that are expanding similarly quickly? With a CRM, of course.

One of the ways that CRMs achieve this is through reports, analytics and dashboards. If companies are growing quickly, they can’t be expected to manage customer numbers manually but a CRM can scale as fast as needed. Campaign management can ensure that processes remain geared toward your ultimate goal even if you end up targeting more customers than you originally envisioned. 

Plus, growth doesn’t just come from attracting new customers - businesses also have to ensure that they keep hold of existing ones. A CRM can ensure that these individuals aren’t neglected by ensuring that they are engaged even when campaigns specifically targeting new customers are launched. Alerts can even be set up or automated email replies to ensure that you remember to respond or reach out - that way, you can acquire new customers without losing those you already have.

Reasons why a CRM may not be right for you

Despite the many advantages of employing a CRM solution, this software isn’t right for everyone. Regulatory businesses, for instance, may not be a good fit because of the costs around implementation and the security risks involved. Similarly, if you’re the type of company with a fairly homogenous customer base and little need for expansive marketing or sales teams, then a CRM solution may be unnecessary. 

In addition, regardless of your specific industry, there are several reasons why you may not need a CRM. Perhaps you already utilize bespoke tools internally for customer information and have few complaints. Maybe your teams are quite happy with using separate contact management and lead generation tools and lumping them together as part of a CRM would only disrupt a smooth-running operation. 

Ultimately, whether you decide a CR is right for you or not, don’t take your decision lightly. Speak to all the relevant stakeholders to see whether they think a new business solution is needed and get them on board with any free trials available. CRMs are important for many modern businesses, before you employ one, check whether they are right for you.

Barclay Ballard

Barclay has been writing about technology for a decade, starting out as a freelancer with ITProPortal covering everything from London’s start-up scene to comparisons of the best cloud storage services.  After that, he spent some time as the managing editor of an online outlet focusing on cloud computing, furthering his interest in virtualization, Big Data, and the Internet of Things.