Measuring CRM Success: Key Metrics And KPIs For Small Business Growth

Measuring CRM Success: Key Metrics And KPIs For Small Business Growth 

Small Business 6 Mins Read March 21, 2024 Posted by Soumava Goswami

After the massive impact of the COVID-19 pandemic on the economy, the last few years have been a tough time for small businesses. The entire economy of the United States depends upon the performance of small businesses. To ensure your small business growth, there are certain metrics and KPIs you need to consider.  

Furthermore, it is important for you to focus on your sales and revenue, no matter what kind of small business you have. If you are not aware of the various KPIs and key metrics of your business, you cannot work towards its growth. Hence, to learn more about the key metrics for small business growth, read on through to the end of the article.  

Small Business Growth: A General Overview 

Small Business Growth_ A General Overview

All businesses want sustainability, and businesses need to be future-ready with the right plan and structure for the business. However, to grow your business, you cannot rely on a single strategy. You will need to invest in various strategies and implement those strategies for growth. Furthermore, small business growth is also important since small businesses offer employment to most people in the United States. 

According to the Forbes Advisor,

?The impact of small businesses on the U.S. job market is more significant than often perceived. Although a majority of small businesses, over 80%, operate without any staff, these entities still employ a total of 61.6 million people. This figure represents 45.9% of the entire U.S. workforce, a remarkable statistic especially when considering that fewer than 20% of small businesses have any employees.? 

Hence, it is necessary to scale your small business so that it becomes efficient and productive at the same time.  

What is the Importance of Growing a Small Business? 

What is the Importance of Growing a Small Business

One of the most important aspects of the growth of small businesses is that they help create employment. This is also important to increase consumer spending and deal with unemployment problems in the economy. In addition to that, small businesses also play an important role in the promotion of economic resilience. 

For example, government agencies like the Small Business Administration offer loan programs for small businesses. Furthermore, there are many government agencies and corporations that offer grants to small businesses. 

Hence, as a business acquires new assets, attracts new talent, and funds investments, it will be able to grow with time. Furthermore, it also helps in driving the performance and profit of the business. 

What Challenges Do Small Businesses Face? 

What Challenges Do Small Businesses Face

A small business comes across a variety of challenges that are important to overcome. Some of the challenges are external and internal. The following are some of the major challenges that small businesses face: 

  • Lack of finances and funds for business operations. 
  • Lack of time and a lot of things to do within that time. 
  • An employee might have to handle multiple tasks. Hence, it gets harder to deal with employee turnovers. 
  • It gets difficult to balance growth and the quality of products and services. 
  • Lack of popularity and problems in online presence. 

What are the Steps Essential for Small Business Growth? 

The following are some of the most important aspects essential for small business growth: 

1. Research and Planning for Small Business Growth 

Research and Planning for Small Business Growth

To ensure proper research and planning for your business, you will need to ensure the following aspects: 

Understanding the Market and the Needs of Customers 

Learning about the market lets you understand your target customers. Apart from that, you can also understand the changing needs of your present customers, too. Hence, you can devise strategies for growing and changing your business to meet those needs. 

Make Better Decisions through Competitive Analysis 

One of the biggest features of entrepreneurship is to learn more about your competitors. Here, you must focus on their strengths and weaknesses. This will help you to drive your decisions, which can further scale your business. 

Develop a Sales Funnel for the Customer Journey  

Consider your sales funnel as your customers? journey. When a customer comes across your business, they remain at the top of the sales funnel. However, when a customer makes a purchase, they move through the funnel. Hence, it is important for you to find ways in which you can move people through the funnel. 

2. Customer Retention 

Customer Retention

Customers can come and go with time. However, how a business retains its customers matters the most. One of the best ways to retain customers is to focus on customer service. A great way to improve your customer service is to use a CRM. CRMs play a big role in the success of your business. 

Importance of Customer Retention 

You need to make sure that your existing customers come back from time to time. This is customer retention. Generally, customers who come back to purchase spend more money. This will help increase your sales revenue a lot. 

Higher Customer Loyalty 

Furthermore, if you increase your customer retention, there will be more customer loyalty. As a result, higher customer loyalty can help in increasing sales. Hence, offering the best customer service is essential. 

Comparing Costs: Acquiring New Customers vs. Retaining Old Ones 

Through various marketing and advertising, it will cost five times more to get a new customer than to retain your current customers. Hence, if you retain your customers, it means that you need not spend capital on those aspects that do not guarantee growth. 

3. Strategies for Small Business Growth 

Strategies for Small Business Growth

If you generate revenue with time and want to grow your business, there are certain ways you can consider:L 

Franchising Your Business 

This is one of the best strategies for growth, where you sell the rights of your business to an independent owner. Here, you allow another owner to open and operate their own franchise under certain conditions. 

Diversifying Your Products / Services 

If you have had success with your main product or service, you must consider diversifying your products and services. This will help you get new customers for your business. Here, you must first identify opportunities for your products and services. Then, you must find various other ways of offering your existing products. 

Expanding to New Markets 

Another way of expanding your business is to extend to new markets through exporting. Here, you will need to look for exporting opportunities where you will be able to ship your products and services across the globe. 

4. Measuring and Refining Small Business Growth 

Measuring and Refining Small Business Growth

Although there are many strategies for growth, it is also important for you to measure what works for your business. For example, if one of your strategies is not working, you will need to measure the outcomes and consider changing your strategy accordingly. 

Furthermore, you must also consider taking calculated risks for your business. You can do this by creating realistic forecasts based on your business plan. This will give you a better idea of how certain strategies can affect your business. 

Summing Up 

Hope this article was helpful for you in getting a better idea of the major aspects that ensure small business growth. If you want to grow your business, consider following the strategies above. However, you will need to apply these strategies based on the needs and demands of your business. 

Frequently Asked Questions!! (FAQs)

The following are some of the most frequently asked questions: 

Q1. What is a Good Growth Rate for a Small Business? 

Ans. For a small business, a growth rate between 10% to 25% per year helps a lot.

Q2. How Can Small Businesses Inspire Growth in The Market?

Ans. A small business can inspire growth in the market by introducing new products and services. Apart from that, they also help in driving innovation and economic growth. Furthermore, they offer employment and help in increasing competition.

Q3. What are the Five Stages of Small Business Growth? 

Ans. The following are the five stages of small business growth according to Harvard Business Review
1. Existence 
2. Survival 
3. Success 
4. Take-Off 
5. Resource Maturity

Q4. How to Encourage Small Business Growth?

Ans. Some of the best ways through which governments can encourage small business growth are: 
Implementation of policy interventions and monetary policy 
Offering grants, subsidies, loans, tax breaks, etc. 
Offering regulatory benefits. 
Promoting entrepreneurship and financial education in schools and universities. 
Enable an environment for local entrepreneurs to compete with each other. 

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A passionate writer and an avid reader, Soumava is academically inclined and loves writing on topics requiring deep research. Having 3+ years of experience, Soumava also loves writing blogs in other domains, including digital marketing, business, technology, travel, and sports.

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