Step one is bringing all key information together. Step two is putting it in a format that can be manipulated and added to. A basic approach involves using a spreadsheet software like Microsoft Excel. This can be a valuable approach for those just starting out. However, rapid growth and expansion will soon make this a pproach hard to manage. For a small business on the fast track to growth and profitability, I recommend they look at more robust CRM packages. From a small business owner's standpoint, they don't have a lot of time to build a complete database starting from scratch. That's why a customer management tool or software package that is already developed and put together would be much more applicable, cost effective and efficient for any business.

Q. How does a small business obtain the customer information it needs in order to grow its business?

The good news here is that small businesses already have a wealth of customer information. Sales data, customer inquiries and conversations, and past quotations are a few important pieces of data that can be used to better understand customers and identify opportunities. Putting this all together in one place allows the business to do a number of things: cater to its best customers, systemically follow up on opportunities, and target customer sets with unique offerings.

Q. How can a SMB enterprise turn the data into something valuable?

Customer information management tools improve small businesses' understanding of their customers' needs, and allow them to keep in contact with customers at the right times, with valued products and services.

Let's say you bring on a new salesperson. You can quickly bring that salesperson up to speed on the status of your existing relationships by pulling up this customer database and seeing how you've interacted. You also can sort by who the biggest customers are by sales, by region or even by economic demographics. You can quickly understand who they are and what their history is. How much have they purchased? When did they last make a purchase? And, sometimes even what they did not buy.

Bottom line: it's about having one place to look at customer records where sales teams and front office people can see past interaction with the particular account. Finding out when customers last bought something, the after-purchase service package that customers appreciated, or even when they were last contacted by customer service to garner feedback - that's the real value of raw data.

Q. Lastly, what recommendations would you give small business owners who are on the fence regarding a CRM solution?

I'd ask them to assess how well they "know" their customers and how successful they are in meeting their needs. If their answer is not where they would like it to be, I'd contend that they can't afford not to invest in CRM tools. We all know that it is much more expensive to attract new customers than it is to keep existing ones. CRM tools give you the information you need to enable you to keep and grow the accounts you have.

Additionally, a CRM solution can serve as the best marketing tool a small business owner can find and may be the single biggest benefit. It can help determine who your most valuable customers are, making a business owner more willing to spend the time and money to uniquely tailor marketing materials depending on a customer's need.