You’re sitting in your office on a Friday afternoon when you realize a deal worth $15,000 just slipped away. Your team didn’t lose the deal because it wasn’t a good fit or the prospect said no. The deal disappeared because its information was stranded in row 300 of a spreadsheet that no one remembered to check. In this article, we will discuss why small business CRM is a better alternative to doing spreadsheets.
It’s moments like this that make you pause and wonder if the spreadsheet you’re using to track your lead and customer information is doing your business more harm than good.
If you’re using spreadsheets for this, you’re not alone. According to research from Capterra, 51% of small businesses still manage their customer relationships using spreadsheets or email.
Key Takeaways
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There are good reasons for this. Spreadsheets are free and familiar. They’re great for when your business is just starting out. But as you grow, they become more difficult to manage and fall short of what you need them to do, resulting in missed opportunities and revenue.
Let’s explore what sticking with spreadsheets for managing customer relationships is costing you and what the alternatives offer.
The math behind spreadsheet chaos
Spreadsheets feel reliable, but the data tells a different story.
According to an analysis of multiple studies by the University of Hawaii, 88% of spreadsheets contain errors. If you’re using spreadsheets, especially large ones, chances are there are errors in there somewhere.
Those errors have a real cost. A survey by DOSS found that significant spreadsheet mistakes cost organizations an average of $4,315. Not an insignificant number.
The other major cost of spreadsheet errors is time. Teams reportedly spend three and a half hours every week fixing spreadsheet mistakes, which adds up to 22 full working days per year.
As companies (and their spreadsheets) grow, the chance for errors and the time spent managing these sheets grow too. After a while, sticking to spreadsheets for managing leads and customer relationships starts to have a real cost.
Why leads go cold in spreadsheets
Spreadsheets store data, but they can’t act on it. The best business coaches encourage owners to build sales systems that do not depend on someone remembering to check a spreadsheet or manually follow up with every lead. You can save information about when you need to follow up with a lead, but you can’t automatically send reminders to sales reps or alert your team if something changes. When every piece of information is just a cell in a sheet, it’s easy to miss important details.
Teams still on spreadsheets are also using several disconnected systems, such as email, notes, calendars, and so on. This means there’s no central source of truth.
Information gets lost between systems, and it’s difficult to share the full context of a relationship with another team member. Then, when someone’s out of the office, it’s hard for others to pick up deals where they left off, and things often slip through the cracks.
When you have multiple people editing the same spreadsheet, you also multiply the potential for errors. It’s easy to accidentally overwrite information or sort a sheet without expanding the selection, resulting in mismatched data.
When these mistakes happen, suddenly everyone is operating on faulty data. A rep might call the wrong phone number because it’s in the wrong row. Or two reps might call the same lead because the second rep didn’t see the note in the last column.
Once things are changed, it’s hard to see who changed what and determine what the real data is.
Add together manual updates, disconnected systems, and miscommunications, and you get a situation where it’s easy for follow-ups to be missed and leads to slip away.
The revenue equation that changes everything with a CRM
Most businesses avoid switching from spreadsheets to save money, but the reality is that, past a certain point of business growth, not using a CRM means leaving money on the table.
A study of dozens of case studies by Nucleus Research found that the ROI of CRM is $3.10 for every dollar spent. According to an analysis of Nutshell’s customers, companies see 26.4% more new sales revenue year over year when they start using a proper CRM.
Let’s say, for example, you run a small business doing $200,000 a year in new revenue. If you’re using spreadsheets, you’re likely losing 10% to 15%, or $20,000 to $30,000, of that to spreadsheet inefficiency. If you switch to a CRM, however, you stand to gain over $50,000 in new revenue.
CRM costs vary widely, but small businesses typically spend $20 to $100 per user per month on it. For a five-person sales team, that’s $100 to $500 per month, or $1,200 to $6,000 per year. Compare that to the new revenue potential, and the value is clear.
When it’s time to switch to a CRM (and what actually changes)
Don’t wait until things start falling apart to switch to a CRM. Keep an eye out for these signs that it’s time to make the change before that happens:
- More than 50 contacts you’re actively managing
- Multiple team members managing the data
- Deals falling through the cracks
- Reporting is becoming time-consuming
- Managing spreadsheets starts taking time away from actually selling
So, what differences can you expect when you switch to a CRM from a spreadsheet?
One major difference is that a CRM is not just a place to store data. It enables action and can even act on your data automatically in many cases. With a CRM, you get automated features like:
- Lead capture
- Lead routing
- Activity logging
- Reminders
- Follow-up emails
You also get one source of truth that’s available to everyone. The data updates in real time, and everyone sees the same information. Your team can even collaborate directly in the CRM by tagging one another in comments, assigning leads, and creating tasks.
Don’t worry about needing an IT department or dedicated CRM administrator either. Modern small business CRMs are user-friendly enough to use without extensive technical know-how.
The cost of waiting
That $15,000 deal that slipped away on a Friday afternoon? It doesn’t have to be inevitable.
Spreadsheets are great when you’re starting out, but there comes a time for every growing business when using them to manage leads and customer relationships starts hurting you more than it helps. The change is gradual, but if you know what to look for, you’ll see the signs.
Small businesses often hang on to spreadsheets for too long in an attempt to save money. Once they make the leap, though, the amount they recover in saved time, deals, and revenue more than makes up for it.
So, if your business is growing and you’re starting to feel the pain of manually managing relationships with spreadsheets, consider making the switch. Spreadsheets got you here. Now it’s time to upgrade to a tool that can grow with you.
Frequently Asked Questions
1. When should a small business switch from spreadsheets to a CRM?
A small business should consider switching to a CRM when it is actively managing more than 50 contacts, multiple team members are updating customer data, deals are falling through the cracks, reporting takes too much time, or spreadsheet management is taking time away from selling.
2. Why is a CRM better than spreadsheets for managing leads?
A CRM does more than store customer data. It can automate lead capture, lead routing, activity logging, reminders, and follow-up emails while giving the entire team one source of truth with information that updates in real time.
3. How much does a small business CRM typically cost?
Small business CRMs typically cost between $20 and $100 per user per month. For a five-person sales team, that works out to approximately $100 to $500 per month, or $1,200 to $6,000 per year.
