When Should a New Business Invest in a CRM System?

When should a new business invest in a CRM system? Some would say that it is never too soon, and others would bide their time to see how it goes. But all would agree that a CRM system is essential if a business is to succeed, and so the ‘When?’ question is one that every new manager has to face eventually.

To help us decide, it might be worth looking at the problems that occur if the decision is made too early, or too late. We might then settle for a point somewhere in the middle, and so minimise the problems at each end. Too early – you might waste your money. To late, you pay the price!

Let us look at the ‘too early’ idea. The concept of waiting until business merits a CRM system is very common, particularly with start-ups. Comments such as “I am waiting until my business is sufficiently well established”, or “I don’t need anything like this until I have more clients”, or even ‘My phone is all I need for now”, are commonly used to justify delaying the decision. But for others the concept of ‘too early’ grates painfully, for this must mean trying to run a business without the benefits that a CRM system can bring – no central reference for contacts, no linking invoices to customer records, no reminders to keep you on-track, no automated generation of client history. ‘Too early’ really means ‘I don’t want to spend any money on my business until I know it is going to succeed’. It suggests a lack of confidence in the business idea.

The suggestion that the implementation of a CRM system can, in fact, be ‘too late’ might not occur to a new entrepreneur. “Why not leave it until later, when the business is bringing in more money?”, they say. In my position as customer support for CONTACTfile, I am often asked whether existing data can be transferred to a CRM database system automatically. Whilst the answer is always a reserved “Yes”, it is frequently impossible to achieve this perfectly. For example, a little while ago a client-with-a-problem approached us for a CRM system. The problem was in the form of 26 separate spreadsheets with lists of customers, and 104 separate invoice documents! Imagine, if you will, my job of sorting it all out – names on different spreadsheets duplicated and/or spelled differently, missing data to be filled in by reference to the invoices, entries in the wrong columns, different invoices dealing with different people at the same company, addresses in a continuous line. In situations such as this, automatic routines are hopelessly inadequate, and manual manipulation is too time-consuming. In the event, these invoices had to be ignored as the work was too costly, and client history therefore was lost to the business. A CRM system cannot always be adopted easily once the business has got underway.

About the author:
Heather Godfrey is a director of a company that designs and publishes database software. She has worked with database technology since the 1980s, and has applied her skills to formulate database applications across education, local authorities, and business sectors. During this time she has also been heavily involved with education and training, showing others how to support their administration processes.
My website is at: http://contactfile.co.uk


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