A customer relationship management (CRM) system is a piece of marketing technology used to manage, analyse and quickly respond to interactions with current or future clients or customers.
With a good-quality CRM system in place, you can easily keep all the information about every party that your business is interacting with up-to-date and accessible by everyone within your team. CRM systems also allow you to solve specific problems within the customer or client relationship cycle, focus on customer retention, and drive sales growth.
Back in 2015, we published a round-up of the five biggest benefits of CRM systems which highlights the many advantages of using a CRM system in your business. We wanted to return to that subject and give it a refresh for 2018, but focusing specifically on a more recent innovation in the martech landscape: cloud-based CRM systems.
What is a cloud-based CRM system?
CRM systems date back to the mid-80s and 90s, where they originated as contact management systems (CMS) – a type of software designed to store and retrieve contact information.
As the focus in businesses shifted from simply storing lists of contacts to managing and improving relationships with those contacts, contact management evolved to customer relationship management.
There are two main types of CRM system available to businesses:
On-premise CRM software is a type of CRM system which is hosted on a company’s own server. It requires the purchase of hardware, software and software licenses to install, and regular updates must be carried out by an on-site IT team to keep the system secure and up-to-date. It’s highly customisable, but expensive and time-consuming to maintain.
Cloud-based CRM systems, on the other hand, store all of the data they contain on a remote server (“in the cloud”) operated by the hosting company. The company providing the CRM system handles software installation and updates, as well as things like backups, hardware maintenance and security.
The first cloud-based CRM system, Force.com, was introduced in 2007 by Salesforce. Since then, cloud-based CRM systems have become increasingly widespread due to their flexibility and convenience.
If you have a legacy on-premise CRM system and are considering switching to the cloud, or are looking to install a new CRM system and weighing up the benefits of on-premise versus cloud, here are the seven biggest benefits of using a cloud-based CRM system.
1) Accessible at any time, from anywhere
Cloud-based CRM systems can be accessed at any time, from anywhere and using any device, thanks to the fact that the server is based in the cloud and not in a particular office or location.
This makes them much more compatible with modern ways of working, in which so much of our work is done on-the-go or from a location other than the office. It also means that international teams based in different countries and different timezones can access the CRM system whenever and however they need to. All of the data is stored centrally, and will update in real-time to reflect the most recent changes.
A cloud-based CRM allows employees from multiple departments to easily manage their customer relationships in one central location. Team members on the go can use their mobile to access the system. And employees working from home don’t have to delay following up on a crucial lead until they’re back in the office.
2) Affordable – especially for small businesses
On-premise CRM systems come with a lot of associated costs. There’s the initial purchase of hardware and software, plus the ongoing costs of upgrades and maintenance (known as “hidden” costs) – all of which can be particularly difficult for a smaller business to afford.
This makes a cloud-based CRM a great option for businesses without a large on-site IT team, with a smaller budget, or with limited resources.
The main cost associated with a cloud-based CRM is a subscription fee, which is usually paid monthly. Most subscriptions vary in cost depending on how many users need to access the system, but some providers will charge a flat rate. A cloud-based CRM vendor will also take care of the maintenance and upgrades to the system, which saves businesses from having to pay those associated costs.
3) Quick and painless to deploy
Investing in a new piece of marketing technology can often be a long, drawn-out process of weighing the various pros and cons of different solutions, painstakingly building a business case, bringing all of the relevant parties on board, and then finally getting the seal of approval from the higher-ups.
After all of that, you want to get up and running with the new piece of software as quickly as possible – particularly if it will give you the edge over your competition.
Cloud-based CRM systems are fast and easy to get set up with, even for larger enterprises. There’s no need to disrupt your existing infrastructure or spend time installing complex hardware; all you need is an active internet connection and a login, or in some cases an app.
Training employees on the new software will of course take time, but cloud-based CRM systems tend to prioritise ease of use and accessibility, as they’re designed for any business to install out-of-the-box and adapt to its particular needs. Plus, you’ll have saved all that time with a quick and painless install.
4) Easy to upgrade
As I mentioned earlier on, an on-premise CRM system requires a dedicated IT team working on-site to carry out security upgrades and other fixes, which can be inconvenient, expensive and time-consuming.
A cloud-based CRM, by contrast, can be updated or upgraded simply by downloading the update in question from the cloud. Job done.
5) Easy to scale up – or down
If the scope of a company’s operations grows or – for whatever reason – shrinks significantly, a CRM system that fitted the bill perfectly before might suddenly be much too small, or unnecessarily large. Rather than chafing against the restrictions of a too-small CRM system, or paying extra for additional capacity, businesses can scale their CRM system up or down to suit their needs.
While an on-premise CRM system is limited by the hardware that a business can purchase and install on-site, the only thing that a cloud-based CRM system needs is enough capacity in the cloud to accommodate a growth in data input.
Typically, all it takes is a call to the CRM vendor to make an expansion happen – or if needed, adjust the scale of operations downward.
6) Capable of integrating data from other sources
Cloud-based CRM systems are very useful in their ability to integrate information from other sources, whether that be customer information on other systems, or discussions and activity on social media.
A business might want to integrate customer service information into their CRM system in order to prevent gaps in understanding when dealing with a customer across multiple touchpoints. Another business might find it valuable to integrate ERP (enterprise resource planning) data, which encompasses day-to-day business activities like accounting or project management, within their CRM system.
With all of these different types of martech increasingly moving to the cloud, it’s possible to use dedicated cloud integration tools to make them share data, allowing customer relationship management to benefit from information across the business.
Social CRM is the term used to refer to the integration of social media channels into CRM systems, allowing a business to build relationships with their customers on whatever channels they happen to be present on. Many of the available social CRM systems are cloud-based, and while it’s not a requirement, the real-time updates and round-the-clock functionality of cloud-based CRM marry up well with social media.
If the on-premise hardware that houses your CRM system goes down, it can cause massive disruption to the day-to-day running of the business, and even result in the loss of crucial data. One major advantage of cloud-based CRM systems is that data is automatically backed up to the cloud, making it easy to retrieve and restore in the event of a system failure.
System failures themselves are also significantly less likely (though not impossible, of course) with a cloud-based CRM, as CRM providers will generally implement back-up servers to make sure their client businesses can keep things running.
Businesses can negotiate a SLA (service-level agreement) at the outset to make sure that they and the provider are agreed upon what the level of service should be, what “downtime” would look like, and how the business should be compensated for any downtime that might occur.