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12 Pros and Cons of Customer Relationship Management

A customer relationship management (CRM) program allows an organization to take advantage of the data they collect every day. Software that focuses on CRM will be able to track sales, located trends, and automate many of the interactions that take place. There is this idea in the modern workplace that CRM software is a needed investment because everyone seems to be using it, but that just isn’t true. There are some definite advantages that CRM software can bring, but there are some disadvantages that must also be considered.

If you’re thinking about this as a solution, then here are the key points to consider when looking at the pros and cons of customer relationship management software.

What Are the Pros of CRM Software?

1. It puts everything you need into one place.
Customer relationship management needs to be centralized in order for it to be effective. The data that is collected needs to be accessible to everyone who may have a need for it. Instead of trying to hunt down specific data points, everyone can automatically be on the same page because everyone has the same access to the same data. This allows workers to be more productive because they’re able to better focus on meeting the needs of prospects and customers.

2. CRM is a scalable solution.
If an organization is going to survive, it must have a growing database of customers who appreciate the value proposition that has been offered. As the number of customers grows, it becomes more difficult to meet specific needs on a personal level because each interaction has a specific time investment that needs to be made. This software is a scalable solution that fits within almost any budget and will only grow as the organization grows so that the needs of everyone can be effectively met.

3. It allows for data mining.
It just isn’t customer data that is important to mine when information is collected by CRM software. There are also specific sales reports and other analytics that can help organizations discover what is working and what might benefit from a change or two. Customer relationship management allows people to discover where they’re making progress without the same amount of work to collect that data, creating a real time environment where adjustments can be made almost instantly.

4. The data being collected can be accessed remotely.
This benefit of customer relationship management has not always been around. In the past, the only way to access CRM was to have the actual software installed at a computer terminal or assigned machine. To be mobile, a laptop with the CRM software would need to be issued. Thanks to the Cloud, internet saturation, widely available 4G data, and VPN capabilities, a secure connection to the software can be obtained from virtually anywhere. This allows sales people to stay out in the field longer, potentially increasing their conversion rates.

5. CRM can speed up the conversion process.
This is especially true for organizations that focus on providing an online experience. Customers today will research everything they can about a company before initiating a relationship with them. A CRM solution can help customers do this research on their own so that when they finally do contact a sales representative, they’ve completed 90% of the work that needs to get done to come through the sales funnel on their own.

6. It lowers an organization’s overall daily costs.
Because all data is centralized, costs go down for an organization because productivity goes up. Lost paperwork, missing files, and other time consumers go away because the only way something isn’t in the CRM is because it hasn’t been entered.

What Are the Cons of CRM Software?

1. It eliminates the human element from the business equation.
Although the processes become automated when consumer relationship management software is installed, this also means that prospects lose some of the human element that the business relationship sometimes needs. It’s a lot like the difference between receiving a real person at the end of a phone call or an automated menu system. Sometimes it is nice to do the work on one’s own, but sometimes it is nice to have a little personalized help too.

2. There can be security issues with CRM software.
Although this software solution is secure, the fact that the data is contained at a centralized point creates a threat for any organization implementing a CRM solution. It doesn’t even need to be a data hacker that causes problems. What happens if power goes out to the database? Or what if a disgruntled employee puts in data that isn’t accurate as a way to get even? There must be encryption safeguards, but there must also be backup and supervision systems in place so that the integrity of the data can be maintained.

3. Employees must go through a learning curve with the new system.
Installing a new CRM solution can be very exciting. The idea of automating many processes and streamlining the data that is received every day can make business executives downright giddy at times. Then comes the process of implementation and everything changes. It takes time for people to learn how the new system works, what its capabilities happen to be, and what it can be used to accomplish. Once everyone gets used to the system, the benefits can be enormous. It’s that training period after installation that can be a killer.

4. Two words: technical support.
Businesses have two options available to them for CRM tech support. They can either hire their own specialists to deal with the software or outsource this work to someone else. Many companies that provide customer relationship management solutions will provide support, but it comes at a higher price. Purchasing the solution is just the first step of the cost/benefit ratio that must be considered. Many forget about the ongoing support costs that come with a CRM solution and that can be an unpleasant surprise.

5. Data can still get lost if the database isn’t properly maintained.
Many CRM systems will automatically back themselves up through the Cloud or through some other solution, but not every system does this. There may be a need to manually back up the data and if that doesn’t happen on a regular basis, there is a good chance that data can get lost. Even Cloud systems can fail if there is a problem with the internet connection or the server on the other end.

6. It can put sensitive data into the hands of a third party.
There has been more than one instance of a web hosting company taking CRM data and selling it to the highest bidder. Sometimes sensitive customer data is collected with this software and if a third party provider is being used, then they’re being trusted with this data. This is why a full disclosure and due diligence is required before finalizing any relationship.

The pros and cons of customer relationship management are easier than ever to obtain for businesses of any size today. It is also safe to say that not every business needs CRM software. Weigh these key points and you’ll be able to come up with a solution that works best for your needs.

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