Is CRM essential for your small business? Probably

With technology increasingly intertwined with all aspects of business, CNET@Work can help you -- prosumers to small businesses with fewer than five employees -- get started.

Amid the frenzy and excitement of starting your own small business, the need to evaluate and procure technology systems is probably the least interesting task on your to-do list.

But choosing the right technology arsenal for your growing small business is a critical process, even if it's hard to imagine how certain systems will fit into your operations both now and in the future.

For small businesses, customer relationship management (CRM) software is one of those potential head-scratchers. CRM is technically nonessential, but it's designed to help you build and maintain better relationships with your customers and drive higher customer satisfaction and loyalty.

At its simplest, CRM software is a database of customer interactions that businesses use to help their sales teams and service reps increase sales and improve customer service. Depending on a company's needs, CRM could merely help facilitate the transfer of customer data to the cloud, or include more sophisticated features to help teams collaborate with colleagues, communicate with customers, send personalized emails and gather insights from social media interactions.

Without a CRM system, most businesses handle customer connections and information using the old-fashioned staples: Excel spreadsheets, Google documents, email or even note cards and Rolodex. These things work fine for some small businesses, but they offer little in terms of scalability and customer insight.

"The roofing industry, in general, isn't known as early adopters of new business technology," said Mason Tuttle, business systems analyst for Malarkey Roofing Products in Portland, Oregon. "Before CRM, we relied on Excel sheets officially, but a lot of customer interaction was also in employees' email inboxes."

Post-CRM, Tuttle said Malarkey Roofing was able to tie together all of the customer data that was living in Excel, Microsoft Access data and data from the company's accounting systems into one centralized location. "It has made us more organized and efficient," he said.

Before you begin comparing CRM software vendors, you must first determine whether a CRM system is right for your business.

Some companies start using CRM because they want to track sales right from the start; others do it for the insights into customer interactions or to automate certain processes as they grow. Try to factor in not just where you are today, but where you want to be in a year from now, once the pace of sales and customer acquisition has gained speed.

"As soon as you have something to sell, and as soon as you have customers who you want to build and maintain strong relationships with, CRM becomes necessary," said Clint Oram, cofounder and CMO of SugarCRM. "If utilized correctly, CRM is the tool that helps a small business offer a superior experience to their customers."

In the case of Malarkey Roofing, the decision was based on need. The company wanted to implement a centralized data model and a system that would improve and streamline business processes. Combined with a desire to evaluate things like sales growth strategies, CRM became the logical next step.

For some businesses, a simple contact manager is probably more than capable of handling customer relationships. If you're running a one or two-person operation and get little or no repeat business, for instance, a full-blown CRM system will be overkill. Same goes if you have only a few large customers -- it really depends on where you are as a business and what your goals are for the long term.

Choosing a vendor

First and foremost, you want to pick a CRM system that you can afford. When it comes to cost, however, the sticker price is only part of the equation.

"Some CRM providers have gotten away with publishing one price, and then locking customers into their cloud and charging them for API calls, usage upcharges and storage fees," said Oram. "I strongly believe simple and straightforward pricing should be the rule of the day so businesses can make their CRM initiative a strategic differentiator at a cost that works for them."

You also want to pick a CRM system that will make your business life easier. For the technically challenged, that means choosing a system that is low-code or no-code and easy to operate without a designated IT department.

Beyond usability, consider the level of automation the system offers, how mobile-friendly the system is, as well as options for third-party integrations, reporting and analytics, and security. Also look for a company that ranks high in customer support and offers straightforward contact information to help you resolve issues.

Salesforce's head of SMB Jamie Domenici recommends factoring in the use of artificial intelligence (AI) when weighing the perks of various platforms.

"A lot of small businesses don't think about AI or they think it's not for them. In reality, AI is just something that makes life easier without knowing it's there," she said.

"For instance, think of the small business owner that goes to a trade show. They could meet upwards of 400 people on that trip, but then go home and not know what to do with those leads," Domenici continued. "What's helpful is if you have a system where you can enter all those names and have AI prioritize which ones are most useful for you. It's like having another person on payroll."

On the other hand, be on the lookout for CRM systems that may overstuff their offerings. Oram's take is that SMBs are best served by core CRM functionality, and should avoid vendors that push feature after feature that's not really necessary or useful.

"I call this concept 'CRM bloatware,'" Oram said. "I'd advise SMBs to carefully evaluate vendors and find a company that is focused solely on CRM. If CRM is only a fraction of what they do, you're unlikely to find the company that is willing to be a true partner."

A look at the options

Insightly is one of the more affordable CRM options on the market. One of its key features is integrated project management functionality that lets users tie together customer relationship and project supervision in one place. It also offers features for contact management, opportunity management and detailed sales reports. Insightly offers a free plan for the smallest of businesses, and paid plans start at $12 per month.

Pipedrive is touted for its ease of use and features tools for sales automation, reporting and productivity. The system also integrates with a bevy of third-party productivity tools, including Google apps and MailChimp. Pipedrive starts at $10 per user, per month.

Zoho CRM has features such as sales tracking, social profiles and multichannel support. The platform is deeply integrated with Google's G Suite and its recently redesigned user interface has boosted its usability. Zoho CRM offers a free edition and paid plans start at $12 per user, per month.

Salesforce is the undisputed giant among CRM vendors, and it's known primarily for its enterprise deployments. However, it does have an option designed specifically for small businesses, and features include contact management, lead generation, sales forecasting, workflow automation and collaboration. The company recently added artificial intelligence into the mix with the Einstein platform, which aims to offer additional automation and analytics capabilities. Salesforce starts at $25 per user, per month.

SugarCRM's software is highly customizable and offers tools for marketing, employee tracking and sales integration, as well as sales automation and forecasting, lead management, call-center automation and reporting. SugarCRM pricing starts at $40 per user, per month.

Microsoft offers a robust small business CRM system called Dynamics 365, but the tech giant also offers an even lighter-weight CRM option called Outlook Customer Manager. The service covers the CRM basics, such as tracking customer interactions and history, but it also works to organize customer information, including emails, meetings, calls, tasks and deadlines. The service is free for businesses using the Office 365 Business Premium Plan, which starts at $12.50 per user, per month.

There are dozens of CRM systems available for small businesses, and this list is by no means exhaustive. As always, you'll need to put in some legwork researching your options if you decide to make the move to CRM.