CRM: Does Your Startup or Small Business Need It?

An Entrepreneur's Compass For The Customer Relationship Management Landscape

When you see the flashy big budget tools like Salesforce or SugarCRM, it's easy to dismiss CRM as a tool for the big guns with the deep pockets and huge sales teams.

Nearly every business needs CRM. It's just a question of how to do it.

CRM: What is it?

CRM stands for customer relationship management. This term has over time been expanded, refined, shaped, and stretch by all the players to become nearly meaningless. You'll also see terms like Marketing Automation, Customer Experience Management, and Salesforce Automation, to name just a few. You aren't the only one who's confused. If you're anything like most entrepreneurs, you're at a loss as to where to begin, and don't have the time or patience to dig in, so you put it off.

No really, what is CRM?

love your customers-it's a two way street!

At the heart of CRM is a simple concept: building and maintaining customer relationships. How do you maintain those over time so your business continues to grow? Why? 70% of companies say it's cheaper to retain a customer than acquire one. After all it costs 3-15x to find a new customer vs. retaining one you already have, with these caveats.

CRM is not about the tools

You can do good customer relationship management with paper, pencil and a telephone. In fact, starting this way is a good way to figure out what works, because the cost of discarding the wrong setup is minimal. Software is absolutely unnecessary until you know exactly what you want it to do.

Roll Your Own CRM:

This exists. Roll your own sushi.  Amazing.

This exists. Roll your own sushi.  Amazing.

  1. Make a list of the current customers with whom you want to build or maintain relationships.
  2. Customers should include the press, investors, advisors, and any other stakeholders that you need to work with. Since you are starting with simple tools, keep this list tight, ideally less than 150 people. Dunbar's number suggests it's hard to have close relationships with more than this at a time. (Software helps you expand that reach, and this guide will get to that).
  3. Next to those names, mark their importance, from 1-3. One is important.
  4. In the next column, list how frequently you want to contact them (daily, weekly, monthly, quarterly, annually)
  5. Add a column for the best way to reach the person. Include a link so you don't have to
  6. Next to that make room to take notes.
  7. Sort the list by order of importance and then by frequency of contact.
  8. Make time each day to tackle the list, starting in the most important order, and working your way down. Depending on your situation, you will want to block out up to an hour or more each day to do this. Schedule this time so you won't be tempted to push it off. Remember, contacts can be via social media, email, telephone, or in person. Even SMS counts!
  9. Take notes on each contact: date and any takeaways or next steps. Note date of follow up.
  10. Put this into excel or Google Doc if you can't hold yourself back. We've even created an open Google Doc you can copy and use for free, right here.
  11. Follow this schedule for 3-6 weeks, refining the information you are collecting.

Wait, this sounds like contact management.

Yes, that's exactly what CRM is, just done with a very specific group of contacts--namely your customers and prospects. But as a founder, you are likely to have stakeholders such as potential or actual investors or journalists who also need consistent, regular management, so don't forget to include them. That's why startup CRMs have different needs than big enterprises.

How do you manage relationships with your customers? Let's discuss on Twitter or in comments below.