Should My SMB Build or Buy its Own CRM? Pros, Cons, and Practical Use Cases

Did you know that according to business.com, 83 percent of small businesses reported a positive return on investment after adopting customer relationship management (CRM) software, with an impressive 87 percent emphasizing the “very important” role it plays in their company’s management? According to the same study, nearly 90 percent of businesses using CRM view it as a valuable investment in both time and money.

So, are you still using traditional customer management methods? Are you dealing with disorganized information across fragmented teams? In that case, it’s time to modernize your approach and enhance efficiency for optimal business growth. Leave behind the era of phone calls, emails, and sticky notes, and welcome the transformative capabilities of a small business CRM system.

What is a CRM and how can it improve business operations?

A CRM system consolidates all your customer data into a centralized hub, promoting seamless collaboration and heightened efficiency in your business processes. By adopting a CRM, you can completely transform the way you engage and communicate with your customers, and envision seamless collaboration between your sales and marketing departments, all working in sync towards a shared objective.

The era of manually tracking follow-ups and managing numerous spreadsheets is now obsolete. A digital CRM presents a comprehensive overview of each customer’s journey, facilitating task prioritization and ensuring no opportunities are overlooked. Through the utilization of automated reminders and notifications, you can effectively manage critical interactions and guarantee prompt follow-ups, nurturing more robust customer relationships.

For small or medium-sized business (SMB) owners, integrating a CRM system can greatly improve business operations and fuel expansion. In 2024, the CRM landscape is undergoing rapid evolution, introducing new features and capabilities. This blog post aims to assist you in navigating the essential considerations when choosing a CRM for your SMB. Whether you are implementing a CRM for the first time and considering building or buying one, we will explore the key factors to keep in mind.

Benefits of CRM for small businesses

Bigin by ZOHO conducted a study of small businesses and found a unified CRM platform consolidates crucial sales, marketing, service tools, and data, simplifying operations and better addressing customer needs. Recent research indicates that CRM has a substantial impact on small businesses, empowering them to draw in new customers, boost revenue, and enhance overall customer satisfaction.

At Amazon Web Services, when an SMB customer first ventures into the cloud, we know they might find it difficult to transition from an old way of thinking to something new. We often highlight these four benefits which non-technical customers understand the best:

1. Making data-driven decisions about customers

Effective reporting and forecasting are often the distinguishing factors between thriving businesses in challenging economic conditions and those facing difficulties. Precise forecasting and analytics provide businesses with vital and actionable data, enabling well-informed decisions that contribute to growth, with higher success rates compared to relying on guesses about market or customer trends.

While many small businesses often rely on spreadsheets or manual methods to track data, these approaches lead to errors, inefficiencies, and increased operational costs as managing numerous documents becomes burdensome. Upon adopting a CRM, business.com reported 76 percent of small businesses reported enhanced reporting accuracy within their teams.

2. Completing customer-focused tasks faster

Stronger productivity is a notable advantage of CRM implementation. In times when businesses prioritize efficiency to manage budgets more effectively, boosting productivity becomes equally vital as cost-cutting, offering significant benefits with minimal drawbacks.

For example, some small businesses indicated that the adoption of a CRM prompted adjustments in their product or service pricing. This implies that businesses could refine their pricing strategies, finding a balance between maximizing profits and maintaining competitiveness in the marketplace.

Refining pricing structures to this extent is only possible with precise reporting and analytic tools, both of which are facilitated by a CRM. This enables businesses to make informed adjustments that maximize pricing effectively.

3. Enhancing scalability as an SMB grows

Achieving long-term success with a CRM requires a focus on scalability. Businesses of your size aim for growth, making it essential to select CRM systems capable of scaling with their evolving requirements. CRM can expand alongside your business, accommodating more users, handling increased data volumes, and incorporating advanced features as your operations grow. So, it’s crucial to ensure that the chosen CRM can adapt to the changing needs of your expanding business.

4. Improving customer retention and acquisition

Utilizing a CRM system enables small businesses to promptly and efficiently address issues, resulting in enhanced customer support. This is attributed to the elimination of the need for customers to repetitively narrate their issues during each interaction with your company. For example, a customer service representative who sees what a customer bought can more easily resolve the issue in fewer steps.

A CRM tool can also optimize and simplify the sales process, establish a sales pipeline, automate tasks, and analyze sales data, ultimately contributing to increased sales. Having all customer-facing communication channels such as voice, chat, and email consolidated in one place allows for delivering precise messages through the appropriate channels at the right junctures in the sales life cycle.

Additionally, CRM tools provide insights into customer churn, helping identify when customers discontinue using a product or service, enabling businesses to analyze and address these pain points effectively.

Is buying a CRM better for your SMB?

What you decide to do is dependent upon several factors, such as level of IT expertise, resourcing, funding, timeline, and other considerations. As cloud experts, we’ve listed what you need to know in non-technical language:

Reasons to buy a CRM

The benefit of buying a CRM is that there’s no heavy lift on resource requirements, because you don’t need to hire or designate teams to build it out. The process of buying is also simple, and often can occur the same day, assuming customer records are already digitized in the cloud. Many modern CRM products in the market are hosted in the cloud, which makes the process of implementation easy. It also means teams can access crucial data securely from anywhere with a stable internet connection. If you do not need any specific customization, an out-of-the-box CRM product might be right for your SMB.

If you decide one specific CRM software product isn’t right for your business, you can terminate it and stop future payments as you setup another one. Ultimately, this is a straight-forward, buying option that is a lower cost compared to building it out. AWS has competitive offers with third-party CRM solutions that are free to try before a full commitment. HubSpot is a highly-rated CRM which offers an option of a free trial or 20 percent off.

Risks to buying a CRM

Conversely, there are several risks when considering whether to build or buy a CRM. For purchasing an off-the-shelf solution, it is critical to perform a requirements assessment early to determine features that your organization absolutely needs against “nice-to-have” options that may be part of an additional phase.

Purchased Software-as-a-Service (SaaS) solutions, such as CRMs, have a defined set of options that won’t accommodate deep customization outside of the standard software. Additionally, these vendor solutions may have complex license fees and contract commitments that lock-in usage during the lifetime of the contact. Again, identifying requirements early will facilitate the decision if a purchased CRM solution will solve specific business needs.

Is building a CRM better for your SMB?

If you have an in-house IT team, or a third-party consultant who can own the build out, implementation, and maintenance, this can be created to fit the exact needs of your business. Here is what you need to know:

Reasons to build a CRM

Sometimes the out-of-the-box, pre-built CRM options don’t fit your company’s exact needs. For that reasons, some companies choose the path of building out their own CRM because the amount of customization and flexibility is virtually limitless. It’s an empty slate and whatever you need can be part of the development roadmap. With internal resources building the CRM, any changes can be immediately addressed without communicating to third-party consultants or account managers. CRMs traditionally help sales, marketing, and customer service teams synchronize their efforts, but you can also integrate with others lines of business to create a more holistic customer experience.

When you build a CRM, you own the entire functionality end-to-end and have more control over its back-end architecture, security, and front-end appearance. This is especially appealing to SMBs that work in niche industries or handle highly-regulated data.

Risks to building a CRM

Building offers its own risks. Software coding, customization, security, compliance, project management, and maintenance is no small feat. SMBs may consider the operational overhead of a custom-built CRM more work than benefit if they do not need much customization. Consider the risks of securing your valuable customer data, and the security exposure inconsistently maintained software could prove to your operations. Build outs will also require significant time and developer experience. Once you’re so invested into a CRM, it could lock you into to specific operational requirements, development environments, and hosting platforms.

Conclusion

Ensuring customer delight is unquestionably a pivotal element influencing a business’s viability. Therefore, it is essential to incorporate suitable tools and methodologies that enhance customer experiences. The key advantages of CRM mentioned earlier play a significant role in strengthening customer loyalty and trust in your business.

To attain these benefits, it is crucial to choose a highly effective CRM tool that seamlessly aligns with your SMB’s requirements and can help sales, marketing, and customer service teams. If you aim to streamline communication and gain deeper insights into your leads and customers, integrating a CRM system into your business operations is highly recommended. A straightforward method to determine this is by examining the features and conducting a comprehensive analysis, ensuring they align with the specific needs of your business.

Ready to begin (or continue) your CRM journey? If you lack in-house IT experts, consider exploring AWS Certified partners who specialize in CRMs. If you know you need to build your own custom CRM, contact AWS directly. Let us help you implement a powerful CRM system tailored to your unique needs and goals. Reach out now to elevate your business to new heights.