Inflation is affecting small business owners everywhere. According to research by the NFIB Small Business Association, 37 percent of SMB owners cited inflationary pressures as the single most important problem facing their business. That’s the highest level since 1979.
Yet, we know that small business owners are resilient. Over the past year, they’ve faced a pandemic, labor shortages, a war in Ukraine, and more. High inflation is another challenge they can and will overcome—with the right tools, like customer relationship management (CRM) software in place. Here’s how CRM software can help SMB owners survive this inflationary period and get back to business as usual.
How inflation impacts small businesses
Inflation cuts into profits due to increased supply chain costs. Higher food and inventory costs result in higher prices. Raising prices can be a risky proposition for SMB owners. For starters, small businesses can’t always compete with their big-box counterparts that face the same situation. Secondly, raising prices is difficult for small businesses that earned customer loyalty through years (or decades) of consistency.
On a positive note, research by Kabbage found that small business owners nearly doubled their revenues between July 2021 and July 2022. And, even though the majority of small business owners are concerned about inflation and a potential recession, 80 percent said they’re confident that their businesses can weather a downturn.
How a CRM can help small business owners
The right CRM software can help SMB owners combat inflation in a few important ways.
Keep up with critical metrics
During economic downturns or periods of inflation, it’s critical to make sure things don’t fall through the cracks. CRM software solutions provide insights into pressing business needs including detailed metrics about inventory costs, percent-to-goal sales quotas, forecasting, marketing efficiency, and more.
Entrepreneurs and small business owners who use this data to make key decisions every month—or even every week—get a distinct advantage when it comes to getting through a high-inflation period.
Maintain employee productivity
Employees are often stressed during periods of inflation. They may be uncertain whether they’ll be laid off or their hours will be cut. One way to help with this is to implement a CRM solution and culture of transparency throughout the business.
Giving employees access to CRM not only gives them peace of mind, but also helps streamline and optimize their workflows, improve collaboration, reduce redundancy, and ultimately increase productivity.
Personalization works, and customers notice when it’s missing. According to McKinsey and Company, 71 percent of consumers expect personalized interactions, and 76 percent get frustrated when they don’t receive them.
Using an all-in-one email marketing and CRM software, small business owners can deliver personalized offers or communications based on the customer’s purchase history, their personal details (such as a first name or a birthday greeting), as well as automated follow-ups when respondents provide information or requests via lead capture forms. These personalized communications keep your business top of mind for your prospects and customers and improve customer loyalty and retention by helping them to stay engaged.
Raising prices isn’t always realistic for startups or small business owners. But, if it’s unavoidable, communication is key. CRM systems allow businesses to keep customers informed about price changes, inventory issues, store hour adjustments, and more.
Providing consistent and thoughtful messaging during tough economic times can enable you to forge more personal and deeper relationships with your customers.
As we look to 2023, and businesses continue to feel the impacts of rising inflation, supply chain uncertainties, and other unique challenges, in a recent survey conducted by Act!, we find that SMBs that are already using a CRM seem to be more optimistic about their future -with 70% of respondents showing signs of optimism.
Weather economic uncertainty with Act!
Entrepreneurs and small business owners need an all-in-one CRM and marketing automation platform to accomplish these tasks. Act!, a leading CRM provider, does this and more—and at an affordable price that’s well worth the return on investment. From pipeline management and email marketing to lead scoring and analytics, Act! helps startups, and small and midsized businesses strengthen their customer relationships and increase their profits.
If you’re looking to combat inflation and make your business recession-proof, try Act! free for 14 days. No credit card or download is required.