CRM is one of those acronyms that marketers can throw into a conversation and divide the group between those who know what it means, and those who are making a note to research the term when they get home. I dislike jargon at the best of times so let’s get this one explained right away. CRM stands for Customer Relationship Management. You are reading a marketing blog so you probably have an idea of the importance of relationships in attracting and retaining customers or supporters. When someone mentions a CRM, they are almost always referring to the software that helps us manage our customer relations – a database.

There are a load of CRMs out there on the market. The more complex type can store the customer’s (or supporter’s) details and their preferences as well as all of the interactions they’ve had with the organisations. This is why when you phone a company like your internet provider, they will typically ask for your customer number. This allows them to see the services/ products you use and track any ongoing issues. The complex CRMs are great for running reports and crunching data but they do come with a heavy price tag. At the other end of the scale, a spreadsheet can be used like a CRM but it soon becomes too complicated as you add more data and/or more customers. Most start-ups and charities begin by trying to retain all the information in their heads, then they move on to a spreadsheet like Excel, finally they start using a CRM when the need justifies it.

What should you do?

Perhaps you are excited by the potential of having a CRM system at your charity or business. Are you wondering whether it’s appropriate and needed or excessive for you and a bit of a faff? Let’s look at the upsides and downsides.

The downsides

• Pricey – There’s no denying it, CRMs can be expensive. At some point they do pay for themselves though so you need to ask whether the benefits of a CRM database can justify the costs at the current scale of your organisation. Be aware that many CRMs charge by the number of customers you have and some charge by the number of your team who can access the database.
• Complicated – It’s another computer system to learn. If you and your team don’t have the capacity to learn how to use the beneficial features of a CRM, then it’ll end up being used in just the same way as a spreadsheet. If you don’t learn how to run reports or queries and your team haven’t been trained either, it may be more pragmatic to stick to Excel which is familiar to most people.
• Unneeded – This might be slightly controversial but not everyone needs a CRM. They can be flashy and do some impressive things but if, by design, your organisation only works with a limited number of customers/ contacts, then it isn’t that important to get a CRM.

The Upsides

• Organised data – A CRM gives you a central place to keep your customers’ data. A perennial fear of mine is using an old version of a spreadsheet with outdated information. With good procedures and training in place, you can be sure to use the best data there is and, in doing so, give your customers and supporters the best experience.
• Automated – CRMs allow for a level of automation which can be a massive time saver when dealing with large quantities of data. Most CRM software provide a dashboard feature which lets you get a constantly updated big picture view. Without this you may have to create a new snapshot table or, even worse, start looking through all your orders and emails. In fact 60% of businesses stated that a CRM has increased their productivity.
• Insights for better communication – With data that is curated in a CRM, you will have a better insight into your customers’ behaviours and preferences. As an example, a charity might adjust what communications it sends to which supporters based on the their giving habits. This insight will benefit the relationship as the supporter is only contacted with relevant appeals and the charity can target their mailouts more effectively. This benefit alone can justify the cost of a CRM as it will enable you to see where efficiencies can be made.
• Customer retention – You can make a great impression on someone by remembering their name. It’s exactly the same with customers! Identifying customer behaviours and personalising communications accordingly can enhance the relationship between the organisation and customer so that the customer will stick around. A CRM database enables you to build these types of relationships. According to Omi, attracting new customers is five times more expensive than retaining your current customer base.

Conclusion

Every organisation is different and they all have their particular needs. You might decide to use a CRM for a different reason such as managing stakeholders, partners or collaborators – these relationships are also important. You might use a CRM to help you adhere to GDPR regulations.

All of these reasons are valid but, as with everything in marketing, just because something is good, it doesn’t make it essential for your organisation. Like most marketers, I would lean to using a CRM but it needs to be right for you at the time. We don’t learn to drive in a Ferrari, a banger is more than enough to get us started.