• Customer relationship management software helps you stay connected with customers so you can continually gauge customer sentiment.
• Automation, email templates, contact history and tracking reports are a few of the benefits of using a good CRM application for customer service.
• Sixty-five percent of consumers believe a company’s reputation for great customer service is more important than advertising.
• This article is for entrepreneurs who want to improve their customer service by optimizing their use of CRM software.

People want to do business with companies that offer excellent customer service. So, how can small businesses up their customer service game? Using your customer relationship management (CRM) software more effectively is the answer.

What is CRM software?

A CRM is a database in which businesses store information about their customers – including customers’ contact information, as well as records of customer interactions and transactions – to assist the sales and marketing staff with acquiring and retaining customers.

CRM software allows users to track interactions with leads and customers, helping to optimize sales processes, customer service, tech support, and marketing campaigns. CRM software is an important element in tracking your customers’ behaviors and needs, then pivoting to meet them.

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“Many small businesses today still handle customer interactions and data using old-fashioned Excel spreadsheets or filing systems. These methods, while useful for a time, offer little long-term value on scalability, shareability, and customer insights,” said Arun Upadhyay, founder and CEO of LionOBytes, maker of cloud- and mobile-based CRM LionO360. “A CRM, however, can help small businesses better understand the needs and concerns of its customers, and be more precise and deliberate in nurturing those relationships.”

Basic CRM functions include managing customer data, tracking leads and answering customer feedback requests.

“When looking under the hood of a CRM solution, however, you’ll see that there are far more powerful features that can give a company the edge it needs to compete and grow,” said Upadhyay.

Key takeaway:  A customer relationship management system is a marketing automation tool you can use to increase customer engagement, build brand loyalty and customer retention.

Benefits of CRM software for customer service?

When small businesses expand their use of CRM software to not only store customer information but to improve customer service, it can be a game-changer, according to small business owner Ben G. Smith, CEO of BioXskincare, a Phoenix-based maker of botanical-based skincare products.

[Need help picking the right CRM software for your small business? Check out our reviews and best picks.]

“Imagine tracking all the touchpoints with each client – phone calls, emails, orders,” said Smith. “Now imagine your CRM opens every time you want to communicate with that customer. You can see prior responses from your team, issues and what they have done. Now you are prepared for anything.”

“CRM software has allowed me to personally connect with each of our customers who make a purchase,” said David Pietig, general manager of Arlington Plastics Machinery. “I take the month’s sales from a report and follow up with each one. As a small business, we have 20 to 50 sales per month, so it’s manageable. But all the information I need about the customer is in the system, from where the lead came from to how long they have been a customer to previous communications.”

This information is especially helpful when engaging with unhappy customers, according to Pietig.

“It’s not the customers who are happy that are the key. It’s the ones who are not that you really need to be in touch with,” he said. “We sell mostly ‘as-is’ machinery, so there can be unforeseen situations on both sides. But I’d rather know what happened and see if I can do right by the current customer and at the very least make sure we don’t have the same issue with the next one.”

It’s all about communication: A CRM helps you stay in touch with customers so you can continually gauge their level of satisfaction with your business. “As a customer, sometimes just knowing that someone cares is enough to bring you back from the brink,” said Pietig.

To further understand how CRMs can help you elevate your customer service, consider some of the most impactful ways you can use them.

Improve customer service

When consumers are deciding which company’s products and services they want to buy, quality and pricing aren’t the only factors they consider; they also consider the customer experience. Management consultancy PwC found in a survey of 15,000 consumers across 12 countries that 73% of respondents reported customer experience as an important factor in purchasing decisions.

PwC also reported that 42% of global consumers would pay more for a friendly and welcoming experience. Additionally, for 65% of American consumers, a great customer experience is more influential than advertising.

Resolve issues and complaints

CRMs can help you resolve customer issues and complaints.

“One way to improve customer service is through a CRM help desk ticketing system, which allows internal teams to prioritize customers, where managers can assign accounts to team members,” said Upadhyay. “It can also organize all tickets and cases to ensure customer issues are resolved promptly and with recorded notes.”

Additionally, your CRM can circumvent future issues and complaints by helping you learn from past encounters. Without a CRM, client complaints can come down to an undocumented exchange between your associate and an angry customer. Drilling down into how things went wrong, how long responses took and what was said is much easier when you fully utilize your CRM software.

Most CRM systems automatically log emails, but many also record and log phone calls. If a customer complains about rude service, you can listen to a recording of the call they’re referencing. Or, if an associate swears they responded quickly and politely to a query (even after getting a customer complaint), you can cross-check the claim by looking through your associate’s communication log.

Increase productivity and profitability

Although CRMs are designed to help you manage customer relationships, they can help you manage other aspects of your business, such as employee productivity, that have an indirect impact on customer satisfaction.

“Because small businesses operate with fewer employees, it’s important to know how and if individuals and teams are working efficiently and effectively,” said Upadhyay. “Most CRM solutions have an integrated field service management feature. This enables you to know what customers your sales representatives have visited with real-time tracking and check-ins. Field representatives can access this feature on their mobile devices, and input information about site and customer interactions, ensuring maximum productivity.”

CRMs extend into inventory management, as well.

“Small businesses that have inventory needs but lack internal resources can utilize a CRM to manage purchase orders, customer product orders and even monitor all inventory in multiple warehouses,” said Upadhyay. “With real-time tracking, you can know where products are always, from sitting on a shelf in a warehouse to sitting on a truck waiting to be delivered. Additionally, all associated invoicing, billing, and accounting are contained in a single place and connected with individual customer accounts. The ability to fulfill product requests is paramount to customer loyalty.”