Why startups should use CRM

Why startups should use CRM

Thursday July 21, 2016,

4 min Read

According to Wikipedia, Customer relationship management (CRM) is an approach to managing a company’s interaction with current and future customers.

I am quite sure any quote I might paraphrase here will be clichéd or overused, but I just cannot over-emphasise the importance of customers and customer satisfaction in this digital age. Nowadays, you have to start with the assumption that every customer you interact with is already connected to your entire potential customer base, and a single customer can make or break your business model.


Earlier, MIS systems were used for data entry and data management; today, CRM tools are intuitive, adaptive, and sometimes scarily accurate with their machine learning and predictions. CRM has become an integral part of Sales, Marketing and Service interactions with your customer. And that is exactly why a company should adopt CRM at an early stage.

While trying to adopt a CRM system, the plethora of choices can sometimes put off the customer. To make things easier, let’s first break this clutter in to two broad categories: CRM On-premise and CRM On-cloud.

On-premise CRMs are hosted on a private network. They are generally bulky and better suited to larger enterprises. On-premise CRMs offer good security, but in a digital age where mobility, easy access to information, open APIs and user experience define a software’s adoption rate, on-premise systems fail miserably. On the other hand, On-cloud based CRMs are easy to set up and are cheaper. The subscription-based model ensures that a startup gets the same functionalities and features as a large enterprise and scalability is never an issue. Thus for small business, CRM on cloud is the way to go and there are plenty of applications available to choose from. The big names include Salesforce.com, Microsoft Dynamics, Oracle (Siebel) etc.

So, if you are a startup owner, should you consider CRM and invest in it?

There are definitive advantages to using a CRM at an early stage.

  1. Scalability (Vision): As an entrepreneur, the more you worry about scale, the better. Initially when we started one of our customers used to generate one or two invoices a month; gradually we could manage hundreds of leads, generate multiple quotes and manage entire invoicing in a single system because of our Salesforce CRM. We can tell any investor the exact invoice receivables, total paid, due and planned amounts. We basically could slice and dice the data any way we wanted in a split second. This was possible only because we started early and maintained the data properly.
  2. Automation and reporting: I just cannot fathom the time we would have had to spend in managing Excel sheets if we had used them for leads and opportunities. Our teams are sitting in multiple locations, but the dashboards are on the cloud and as management, we get to see relevant data at the click of a button.
  3. Cost of migration: Most customers say “Let me buy something cheap and then switch if required”. This is an absolute warning signal. For starters, you are not confident of your own idea and want to mitigate risk on a very small differential amount. More importantly, the cost of switching to an enterprise CRM like Salesforce is disproportionately high compared to greenfield implementation projects.
  4. Training and Documentation: The earlier your team acquaints itself with best practices and technology, the better your chances of implementing these and seeing results on field.
  5. Upgrades: And the best part of using a cloud-based CRM like Salesforce.com is that a startup gets pretty much same features and functionalities as bigger organisations. Also, yearly releases or upgrades are free, which is just amazing, because you will always use latest application or trends, even after five or 10 years.

Abbreviations used (for foot notes):

API - Application Programming Interface

SME - Small and Medium Enterprise

MIS - Management Information Systems

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)