By Michael Sullivan, July 15, 2021
CRM stands for customer relationship management and is used interchangeably as both a process and a software. The CRM process—technology and quality aside—is the relational system that every organization under the sun participates in. Customers have to be related with or the company would cease to exist (customers are pesky in this way).
CRM software is beneficial in that it:
In short, a CRM streamlines the relational workflow of a company to the point that it pays for itself many times over.
It goes without saying that the ratio of employees to clients must be exceedingly top-heavy. A business with 1,000 clients matched with 1,000 employees would surely have the best customer service on earth before imploding after a single pay-period. CRM software grants a company with 25 employees the power to give the impression to their 1,000 clients that there could be 1,000 employees. Predictably, such a company’s survival rate beyond a single pay-period dramatically increases.
While a CRM helps businesses relate to their existing client base, they’re also particularly useful in aiding prospective customer interaction. To a business, customer retention rivals the value of customer growth. If an organization doesn’t add customers, it will cease to exist (again, customers are pesky in this way). A CRM empowers sales teams to adeptly interact with an exponential number of prospects relative to their own size. The wider the sales net cast, the more client fish could be hauled in. The magic of a CRM is that in 2021, the sales net is limitless.
With CRM software aiding customer retention and customer growth, the third and arguably most powerful benefit of CRM software is customer and pipeline analytics. By compiling and examining current and prospective customer data, a worthwhile CRM software not only helps a business accurately define the attributes of their ideal customer profile, it forecasts a future business outlook in a clear and measurable way.
A business development department instilled with the education of analytics is the reason why your company will adopt a CRM if it hasn’t already. In the world of business, data is king. More concrete customer data equals less time and resources wasted. Less time and resources wasted equals more money you get to keep. With its direct impact on swelling profit margins, a CRM pays for itself many times over.
We haven’t even gotten to the benefits of collaboration, marketing empowerment, and unsiloing silos. Before we do so, it’d be prudent to start narrowing our context to the construction industry (considering this blog’s title and all).
Construction CRM, and more specifically General Contractor CRM, is the system in which General Contractors manage their current and prospective clients that they build for. Construction CRM is also a vertical CRM software solution for customer relationship management in which the software is suited for the context of construction-specific business development out-of-the-box.
The main benefits of a Construction CRM are:
Client relationship management in construction has been traditionally hyper-personalized (read: not aided by technology) compared to other industries. Even with the boom of CRM software over the last 20 years, a decent portion of the construction industry hasn’t adopted a CRM.
According to the CRM usage statistics in the 2020 Construction Technology Report by JBKnowledge, 24% use “Other,” 10% use Outlook, and 8% use Custom In-House Software. While it may be a stretch to assume all 36% surveyed don’t actually use a CRM (JBKnowledge notes that “Other” included a collection of CRMs that didn’t comprise 1%), it’s safe to assume a quarter to a third don’t use one based on how many GCs that have told us first hand that they use spreadsheets. At bare minimum, 10% don’t use a CRM, since Outlook isn’t a CRM.
The survey takers represent a sampling of the construction industry, but let’s extrapolate and assume somewhere between 10% and 36% of General Contractors in the United States don’t use a CRM. Even on the low end of that assumption, this is a staggering statistic considering how United States construction builds $1.3 trillion worth of structures every year and so much money rides on contractor-client relationships.
The modern construction industry was built on the back of person-to-person relationships. The vast majority of the General Contractors on the annual ENR 400 list have existed for several decades longer than the Internet. “My father and his father before him,” is more than just a cliche. The previous generations did it one way and that got them this far. Why change what’s always worked?
Many other business-to-business (B2B) industries were born either just prior or smack dab in the middle of the digital age. For these baby industries, CRM adoption was always bound to be widespread, even to the point of full saturation for industries like media, finance, and software-as-a-service (SaaS).
Another reason why the construction industry lags on CRM software adoption is the complicated context of construction itself. Horizontal CRM software solutions are popular because most industries conduct their relationship management in nearly identical fashion. What works for pharmaceutical business development is a stone’s throw from wholesale trade business development, for example.
In commercial construction, the amount of variables in winning projects makes a horizontal CRM take quite a bit of time to learn, customize, and implement. It’s not uncommon for company-wide rollout of a new CRM to take months to years. That aside, GCs are perpetually forced to spend time getting new business development team members up to speed on their customized setup that differs from what they were using at their previous GC.
Another factor in the construction industry’s hesitance toward CRM software is an innate reliance, for better or worse, on repeat business. Similar to the aforementioned “my father and his father before him,” code of client relations, many GC-client relationships pre-date the digital age. It’s not unusual for more than 75% of a General Contractor’s business to come from repeat clients (and more than 90% based on many of our GC clients). This differs vastly from other industries where client churn tends to be much higher and the impetus to gain new clients, just to keep one’s head above water, forces CRM adoption.
For some General Contractors, business development growth goals are modest enough that they don’t feel pressure to adopt a CRM. Manual approaches to client relationship management work just fine for their needs. We’ve spoken to BD team members at General Contractors that have manual CRM processes ranging from spreadsheets to “It’s all in my head.” Accurate business forecasting and analyzing customer data isn’t relevant when client growth isn’t a priority, packaged with a confidence in one’s established ability to manage current clientele.
Of course, the savvier General Contractors can rejoice that a non-zero percentage of their competition opts against valuing client analytics.
After a quick Googling, you’ll find there are more CRM softwares than there are cereals. As a General Contractor, how do you decide which one to go with? The answer lies entirely in what your organizational and business development goals are.
We built Buildr CRM with the General Contractor in mind. We listened intently to our GC partner feedback on what would make the optimal CRM for their needs. They told us where one-size-fits-all horizontal CRM solutions fall short and can lead construction BD teams astray (there’s a reason why “A Salesforce for construction” and “A Hubspot for construction” are popular Google searches).
Ultimately, our pillars were:
We pride ourselves on developing easy-to-learn, easy-to-use software because the point of technology is to make life easier. We also develop software for a singular group because we enjoy using tools made for us in mind. Square pegs in circle holes aren't fun for anyone. Lastly, we did away with the “seat” system because your company’s business development shouldn’t be limited by how many people have access to software. With Buildr CRM, anyone can wear a BD hat. So long, silos.
If you’d like to try Buildr CRM for two weeks completely free, sign up for your free trial now.
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