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The benefits of CRM are seemingly endless – here are 24 reasons to implement one today.

In 2011, Nucleus Research discovered that CRM systems delivered an average return of $5.60 for every dollar spent.

They continued to research the returns from CRM software and found that in 2014, the average return jumped to $8.71 for every dollar spent.

If this is any indication of a trend, it means the benefits of CRM software are only going to increase year after year.

If you don’t have a CRM system yet, It’s time you implement one.

We’ve already shared how software solutions for cloud-based inventory and supply chain management are crucial to running a successful business.

Today, we’ll share with you 24 benefits of CRM software for growing your sales and boosting your employees’ productivity.

But first, let’s define CRM.

What is a CRM?

Customer Relationship Management (CRM) software consists of any strategies, processes, or technologies that help a company manage their customer interactions – maximizing their customers’ satisfaction and increasing sales.

There are hundreds of CRM systems to choose from.

Some serve specific industries like construction or medical, while others offer customizable solutions for companies of all shapes and sizes.

Despite their variations, all CRM systems have one goal in common:

To help you manage your most important resource – your customers.

24 Benefits of CRM Software

CRM software offers many exciting features:

Fancy reporting dashboards
Automated sales follow-ups
Easy Call recording
And so much more

But you’re probably more interested in results, not features.

Below is our big list of results you can expect to get from CRM software.

By the end of this list, you’ll have a clear understanding of what a CRM system can provide your business and why – according to Forbes – the market for CRM software keeps growing.

Read on to discover the many benefits of a CRM platform.

1) Automate Follow-Ups

Stop missing out on sales because no one followed up.

CRM systems can automatically trigger a sales rep to follow-up with a lead generated through the website.

Also, filtering your existing database allows you to find those leads who have not been contacted in a while.

2) Anticipate Customer Needs

CRM software helps you anticipate customer needs – like product reorders – by allowing you to set recurring reminders. Your customers will thank you for making their lives easier as you rejoice in making the sale.

3) Encourage Referrals

A CRM platform gives your sales and customer support team the tools they need to take great care of your customers every step along the customer lifecycle – providing the kind of experience they’ll tell others about.

4) Close the Sale

83{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of online shoppers need support to complete a sale.

Many CRMs offer online support and chat features that help prevent shopping cart abandonment by ensuring someone is always there to assist your customers.

5) Contact the Right People with the Right Message

CRM software allows you to easily filter your contacts to get a targeted list of customers who would be most interested in an upcoming promotion or new product. According to Marketo, by segmenting your email campaigns, you increase engagement and ROI.

6) Make Sales While You’re on Vacation

By setting up marketing automation through a CRM system, you can send personalized emails to clients even when you’re relaxing on the beach.

So, once your customer performs a certain action, or a specified amount of time has passed, your messages will automatically be sent to them.

7) Maintain Loyal Customers

In the US, 40{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of revenue comes from returning or repeat purchasers, who represent only 8{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of all visitors.

Plus, the top 1{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of customers spend 30x as much as the average customer.

By carefully planning the customer journey through your CRM platform, you can foster long-lasting and profitable relationships with your loyal customers.

8) Understand Your Customers

An underrated benefit of CRM systems is that they allow you to personalize each interaction you have with your customers.

You can track preferences, needs, concerns, etc. that builds rapport and keeps them coming back.

9) Stay Connected

CRM software helps you keep in touch with customers even when you have nothing to sell.

You can:

Set up campaigns and triggers to stay in contact with your customers.
Get to know them beyond your business interactions.
And follow them on social media or monitor their name in the news so you can be the first to congratulate them on their latest successes.

10) Improve Service After the Sale

Sales teams have a lot of pressure to make the sale and move on to the next. CRM software can automate the selling process to ensure that once the sale is complete, customers are not forgotten.

11) Remember to Ask for Feedback

Your sales team has a lot on their plate and asking for feedback – while important – is easily forgotten.

By automating this process or setting reminders in a CRM system, you make sure you are getting the valuable insight you need to continue to improve your business.

12) Understand What Works

CRM software gives you the power to track lead sources and the revenue they generate – helping you make better spending decisions by understanding what marketing investments bring you a positive ROI.

Following these lead source best practices will give you a crystal clear picture of where you should spend your money.

Other KPIs like Lifetime Value of a customer, sales cycle length, or close ratio can also be calculated.

13) Spend Less on New Customers

According to econsultancy, 70{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of companies say it’s cheaper to retain a customer than acquire a new one and 49{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} say that “pound for pound, we achieve better ROI by investing in relationship marketing over acquisition marketing.”

A CRM solution will help you keep customer acquisition costs down by retaining your existing customers through excellent customer service.

14) Reduce Payroll

By integrating with business apps or building processes directly into your CRM system, you can eliminate unnecessary tasks – thereby reducing payroll hours.

15) Implement Without Technical Skills

CRM software typically doesn’t require any IT skills. Most of them are easy to operate, so you don’t need to know how to code to make complex processes work.

16) Foster a Happier, More Productive Sales Team

Not only is a happy sales team a benefit to using a CRM system, it’s also crucial to its success. One of the top reasons CRM implementations fail is because of lack of team adoption.

By getting your whole team involved, you’ll reap the full benefits of CRM software.

17) Streamline Processes

Win over your sales team by automating mundane and labor-intensive tasks.

Even a task as simple as setting a meeting can take up precious minutes in the day.

Avoid the back and forth emails and phone calls by using a CRM system that allows your clients and vendors to simply click a link to see your current availability.

The way it works is simple:

Once they select a time, an invite is automatically generated for everyone’s calendars.

18) Strengthen Communication

“What happens if your most important customer unexpectedly calls with an urgent matter on the same day their sales rep is on vacation?”

Well, with a CRM system in place, everyone on the team can get up to speed in a matter of minutes thanks to a single record containing order history, past conversations, and preferences.

Instead of your team feeling frustrated and helpless – they can step up and be the hero.

19) Store Information In The Right Place

With the right CRM platform, complete customer histories are available anytime anywhere.

Not only is the information easy to find, but thanks to mobile apps offered by the leading providers, your sales team can access everything they need to know about your customers and vendors even when they are traveling.

20) Generate Consistent Commissions

One of the big benefits of CRM software for your sales team is that it helps them understand which clients are at what stage of their sales pipeline.

By knowing this information, they can prioritize who they contact and when to avoid missing their monthly quotas.

21) Increase Fun on the Job

With the addition of gamification features, some CRM systems can turn work into an interactive game – giving you the creative freedom to develop a friendly competition between your salespeople using real-time data.

This will make work more fun for your sales team and will encourage your salespeople to work harder to pursue prospects and close deals.

22) Help Struggling Employees

CRM software helps you understand who your top performers are and what they are doing to succeed. Use this information as a teaching tool for those who need a little more help.

23) Reduce Information Overload

CRM systems allow you to add tags and other key information for easy retrieval later.

Can’t remember which client did what? Use the powerful search functions to reveal exactly what you are looking for.

24) Enhance Employee Training

A solid CRM platform gives you the ability to quickly onboard new sales team members and equips them with templated emails, sales processes, customer data and other tools they will need to be successful.

Even the best salesperson can’t sell if they are left wondering what’s going on.

How to Increase the Benefits of CRM Software

The benefits of a CRM system begin with your salespeople and end with a closed deal.

So, what comes next?

Delivering the products to your new or existing customers and managing your inventory to stay on top of all these purchase orders.

Wouldn’t it be nice to upgrade your sales process with CRM software while seamlessly managing your inventory within the same centralized hub?

Well, now you can.

Experience the Benefits of CRM Software Combined with Cloud-Based Inventory Management

DEAR Inventory seamlessly integrates with Capsule and Salpo CRM platforms – giving you the benefits of real-time inventory tracking and real-time customer tracking simultaneously. Easily add customers and suppliers to DEAR as they progress from initial inquiry through to a sale while automating purchase orders and streamlining your stocktake.

Start your free 14-day trial of DEAR Inventory today!

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Find the right level of working capital to grow a healthy business

Working Capital is an important financial metric for understanding your company’s operating liquidity (the ability to convert your assets into cash for the purpose of paying the bills). Knowing your amount of working capital can also guide your inventory strategies, leading to smarter buying decisions.

By the book, the definition of working capital is:

Working Capital = Current Assets – Current Liabilities

In other words, it’s the cash you have left over once all payments due to you are collected and your bills are paid.

If your company maintains an inventory of goods that you sell to your customers, the formula can be expanded to:

Inventory Value (value of items for sale and items used to make goods for sale)

+ Receivables from Customers (cash owed to company for sales)

+ Rebates from Suppliers (Discounts for buying a certain value, quantity, or within a certain timeframe)

– Payables to Suppliers (cost of inventory)

= Working Capital.

What’s considered a healthy working capital varies from industry to industry – but in theory it should be as low as possible.

A low working capital is a strong indicator that your company is finding the right balance between what you have on your shelves, the revenue you are generating, the investments you are making in your future, and the debts you owe.

A high working capital can be a sign your business is booming, but it can also mean you’re missing investment and growth opportunities.

Another Insightful Approach

In the business world, working capital is usually measured not by the cash figure of assets minus liabilaties, but by what’s known as your current ratio, which is:

Current Ratio = Current Assets / Current Liabilities

According to Investopedia, your business should aim for a current ratio between 2.0 to 1.2, but this varies by industry; here are some average current ratios for industries you’re likely in, according to CSIMarket:

Internet, Mail Order, & Online Shops: 1.12
Wholesale: 1.29
Food Processing: 1.26
Miscellaneous Manufacturing: 1.55

A ratio higher than 2 is a sign that you’re not properly using your funds – either in the form of carrying too much inventory or not capitalizing on extra cash by investing in growing your business, while a ratio lower than 2 may make it difficult to find the cash you’ll need to pay your suppliers and other debts.

The metric changes as quickly as you make sales, pay suppliers, or increase your inventory – but by understanding how the decisions you make affect it, you can take control of your working capital instead of letting it control you.

Here are some aspects of your operations to consider as you create your working capital management strategy:

Turn Down Supplier Discounts

Just say no (sometimes)! Avoid the temptation to take advantage of supplier discounts when they mean ordering more inventory than you need right now.

Sure, you could buy three times the materials to reduce your per item cost by 75{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3}. But unless you can actually sell that inventory, you risk filling your shelves with stuff that can quickly become obsolete, broken, or buried.

By collecting data to understand your what your customers want and when, you can better decide when it’s the right time to take advantage of these discounts.

Achieve Negative Working Capital

There are two ways to look at negative working capital – one way is a signal of financial distress for a company indicating you have spent more money than you have.

A more positive definition involves a strategy that requires careful thought and planning.

By setting terms of payment with your suppliers that give you enough time to collect from your customers before you pay for the raw materials of the items you sold – you are in essence borrowing cash from your suppliers to free up more money for your day to day operations.

This strategy requires an in-depth understanding of your customer demand cycles to ensure its possible to sell all your inventory and collect from your customers prior to your invoice due dates.

Negotiate your payment terms with your own billing cycle in mind. Be sure to give yourself an overlap period where you have cash payments in the bank, but no invoices due for the products and materials you just sold.

For example, let’s say you made $100 in sales for product X and have collected all payments due from your customers.

You owe your suppliers $50 for the raw goods you used to make product X, but the invoice isn’t due for another two weeks.

Because working capital only factors in supplier payments that are currently due, your working capital is a $100 ahead instead of only $50 – which is what it would be if you had to pay your supplier at the same time you collected payment.

Maintaining a negative working capital balance frees up cash to take advantage of opportunities to spend money on growing your business and reducing debts.

Control Inventory Levels

Inventory reduction plays a major role in achieving an ideal working capital – the less inventory on hand, the less you owe to suppliers, tipping your working capital in your favor.

Take control of your inventory levels by putting your sales and purchasing history data to work helping you predict the optimal levels of inventory necessary to operate.

The goal is to use that data to find the right balance between demand, production, and ordering raw materials or stock.

Order too much and you’ve tied up cash resources in product or materials that aren’t making you money. Purchase too little and now you run the risk of losing sales to your competitors who do have the product available for sale.

If this all seems like an elaborate guessing game, you’re not alone. Learn more about inventory reduction in our earlier post. From “lead times” to “just-in-time,” it covers the basics you need to know to get started.

Find the Balance, Achieve Results

Businesses of any size can find a healthy balance of inventory, taking advantage of supplier discounts, and payment cycles by leveraging inventory management software thanks to cloud-based tools like DEAR Inventory.

Want Better Data to Make Better Decisions?

Experience the tracking and reporting power of modern cloud-based inventory management software by starting your free 14-day trial of DEAR Inventory today!