If you’ve ever spoken to somebody trying to sell you a Customer Relationship Management (CRM) system, you’ll probably have been told that it’s an essential piece of software for almost any business. After all, keeping track of your customers, managing sales opportunities and making sure you don’t forget to follow up on enquiries are all fairly important things to get right. However, while I certainly wouldn’t argue against the benefits of having a decent CRM system, I’m not convinced that every business actually needs one, particularly when there are much simpler ways of achieving the same thing.
I’ve worked with various CRM systems over the years, ranging from relatively straightforward contact databases to enormous platforms capable of managing almost every aspect of a company’s sales and marketing operations. Some have been genuinely useful, while others have seemed to create considerably more work than they actually save. As with most business software, I think the important thing is understanding what problem you’re trying to solve before spending money on something that promises to transform the way you work.
What Exactly Is a CRM?
A CRM system is essentially a central database containing information about your customers and potential customers, along with details of the interactions you’ve had with them. Depending on the software you’re using, this might include contact information, previous purchases, email correspondence, telephone calls, sales enquiries and various other activities associated with each customer.
More sophisticated systems, such as Salesforce, Microsoft Dynamics 365 and HubSpot, can also manage sales pipelines, automate marketing campaigns, generate reports and integrate with other business software. For example, you might use a CRM to record an enquiry submitted through your website, automatically assign it to a salesperson and send them a reminder if they haven’t followed it up within a particular period.
This can be extremely useful, particularly when several people are responsible for dealing with the same customers. However, if you’re a self-employed tradesperson with 30 regular customers whose details are already stored in your phone, I’m not entirely convinced that implementing Salesforce would be a particularly sensible investment.
What’s Wrong with Using a Spreadsheet?
One of the arguments I frequently hear in favour of CRM systems is that businesses shouldn’t be managing their customers through spreadsheets. While I can understand the reasoning behind this, I think it’s a little simplistic to suggest that using Excel is automatically a bad thing.
If you’re running a relatively small business, a spreadsheet containing customer names, contact details, enquiry dates and follow-up information might be perfectly adequate. You can filter records, sort information and even produce reasonably sophisticated reports without paying for a dedicated CRM system. More importantly, most people already know how to use Excel, meaning there’s relatively little time or money required to get started.
Of course, spreadsheets have limitations. If several employees are constantly updating the same file, it can become difficult to keep information consistent, particularly if people start saving their own copies. There’s also the problem of remembering to update records manually, which can result in important information being missed.
However, I’d argue that these are reasons to consider moving to a CRM when your business has outgrown its existing processes, rather than reasons why every business should immediately abandon spreadsheets.
When Does a CRM Become Worthwhile?
Personally, I think one of the clearest indications that a business needs a CRM is when customer information starts becoming difficult to manage. If you’ve got several salespeople dealing with hundreds of enquiries every month, for example, it’s probably not particularly practical to rely on individual email inboxes and spreadsheets.
Imagine somebody submits an enquiry through your website, which gets forwarded to a salesperson who happens to be on holiday. Without a central system recording that enquiry and assigning responsibility for following it up, there’s a reasonable chance it could be overlooked entirely. Similarly, if a customer telephones to discuss a previous conversation with somebody who’s no longer available, having a record of that interaction can make a considerable difference to the quality of service you provide.
A CRM can also help businesses understand how effectively they’re converting enquiries into customers. You might discover that one salesperson converts 30% of their enquiries while another converts just 10%, or that leads generated through Google Ads are considerably more likely to result in sales than those coming from Facebook. This sort of information can be extremely valuable when deciding where to concentrate your marketing efforts.
Integrating Your Website and Marketing
From a digital marketing perspective, one of the biggest advantages of using a CRM is the ability to connect your website enquiries with what actually happens afterwards.
Google Analytics can tell you how many people submit an enquiry form, and Google Ads can identify which advertising campaigns generated those enquiries, but neither necessarily tells you whether those people eventually became paying customers. If your CRM records the original source of each enquiry and tracks its progress through the sales process, you can potentially establish which marketing activities are generating the most valuable business.
Some CRM systems can also send information about completed sales or qualified enquiries back into advertising platforms, allowing you to optimise campaigns based on outcomes rather than simply counting form submissions. However, this generally requires some additional configuration, and the quality of the results depends heavily on how accurately your customer information is recorded.
There’s also the opportunity to automate communications, such as sending follow-up emails, reminding staff about outstanding enquiries or identifying existing customers who might be interested in purchasing something else. These features can be extremely useful, although I’d be careful about implementing automation simply because the software makes it possible.
Don’t Underestimate the Cost
One thing I think businesses sometimes overlook is that the cost of a CRM extends considerably beyond the monthly subscription fee. While services such as HubSpot offer free or relatively inexpensive entry-level options, more sophisticated systems can become expensive once you start adding users, automation features and additional functionality.
You’ll also need to consider the time involved in configuring the system, importing existing customer information and training employees to use it properly. Depending on the complexity of your requirements, implementing a CRM can become a substantial project in its own right.
There’s also the issue of data protection. If you’re storing customers’ personal information, you’ll need to ensure that you’re complying with the UK’s GDPR requirements, including having an appropriate lawful basis for processing that information and making sure it’s stored securely. Using a CRM doesn’t automatically make your business compliant, particularly if you’re also planning to use the information for email marketing. The Information Commissioner’s Office provides useful guidance on these responsibilities.
Will Your Employees Actually Use It?
Perhaps the biggest problem I’ve encountered with CRM systems isn’t the technology itself, but getting people to use it consistently. It’s all very well spending thousands of pounds implementing a sophisticated system, but if your salespeople continue storing customer information in their own spreadsheets or forgetting to update records, you’re not going to achieve very much.
In fact, a poorly maintained CRM can sometimes be worse than having no system at all, because managers start making decisions based on information that they assume is accurate. If half your sales opportunities haven’t been updated for six months, any reports generated from that data are going to be fairly questionable.
Personally, I’d recommend starting with a relatively simple set of requirements and making sure everybody understands why the information needs to be recorded. You can always introduce more sophisticated functionality later, once the basic processes are working properly.
So Do You Actually Need One?
Ultimately, I think most growing businesses will reach a point where a CRM becomes a worthwhile investment, particularly if they rely heavily on generating and converting sales enquiries. Having a central record of customer interactions, properly managing sales opportunities and understanding which marketing activities generate revenue can provide enormous benefits.
However, that doesn’t mean every business needs to rush out and purchase one. If you’re managing a relatively small number of customers and your existing processes are working perfectly well, there might be very little to gain from introducing additional software.
I’d suggest looking at how your business currently manages customer information and identifying any genuine problems before deciding whether a CRM is the answer.
If you’re regularly losing enquiries, forgetting to follow up with potential customers or struggling to understand where your sales are coming from, a CRM could be exactly what you need.
If everything is running smoothly with a spreadsheet, though, I’d probably leave it alone.
There’s no point making something more complicated simply because you can.