Excel vs. CRM – Which is best for managing your customer relationships?

Is your business becoming ever more reliant on Excel? 

Whether it’s to track your marketing activities, your sales pipeline, or existing customer interactions? If so, fear not, you are not alone.

Excel is such a flexible application and, requiring minimal knowledge to start using it, it’s no wonder organisations both large and small discover that it’s supporting their critical business processes. The question to ask yourself is whether Excel is appropriate, or whether you should implement a CRM system instead?

What is a CRM system?

Can Excel be used as a CRM?

Technically, yes. A start-up business, full of energy and determination, is usually led by one person. They handle the customer relationships, know all their clients personally, and can be on the end of a phone or an email whenever needed. If this describes you, then Excel is a logical choice for managing your customer relationships. It’s cheap, easy to use, readily available, and you probably already know enough to make it work.

But what happens as your business grows?

Issues with using Excel as a CRM

Uncontrolled growth of spreadsheets

Picture the scene: your business is growing. Your team is expanding. You now have a sales team dealing with multiple customers, tracking multiple leads, yet you’re still relying on an Excel spreadsheet to support, report and monitor their efforts.

Then someone new joins the team and starts their own spreadsheet. They do this because they have their own way of working and they’re not comfortable using the ‘central’ spreadsheet.

They create their spreadsheet and save it in a personal folder. The immediate problem being that no one else can see it. This can lead to a doubling of effort as two or more people attempt to work with the same customer.

Then, when engaging with the customer, your team member doesn’t have a consistent view of prior customer interactions as they’re working from different data sets.

Use of complex formula

Back in the main spreadsheet, someone does something 'clever' – for example, adding pivot tables, using formulae, etc. - yet no-one else understands exactly what they did, although they do really value the new outputs. But what happens when that person leaves? The knowledge of how the spreadsheet works leaves the organisation too, and there’s little chance they’ll have documented what they did.

Soon you realise there are gaps in your customer data that require constant plugging. You and your team find yourselves constantly playing catch-up to update the spreadsheet with every email, call, and contact. But Excel isn’t really suited to such use.

Before long you find yourself working with ever more rows and columns, different colours, worksheets, additional workbooks interlinked with formulae, more complex formulae, and so on. But no matter what you do, there’s no simple way of seeing the whole picture.

Spreadsheet errors

Errors in spreadsheet formulae are common and hard to trace. Similar to how spellcheck in Word won’t necessarily identify incorrect context whilst the spelling is still accurate, Excel won’t highlight if you’ve used the wrong formula or referenced the wrong data. It will only tell you if the formula you’ve used won’t work.

Such small errors can have big consequences. For example, an error in calculating the value of your sales pipeline can lead to significant issues in the accurate forecasting of revenues. This can impact anything from commission payments to production utilisation, to spending decisions being made at board level.

This isn’t just a curse of the small businesses either. During COVID there was a great example where an issue with a spreadsheet led to the NHS misreporting 16,000 cases causing significant reputational damage. That is by no means an unusual problem. A quick Google search on “How many spreadsheets have errors?” brings up and array of studies giving numbers as high as 70% - 90%.

No audit trail or traceability of changes

Another challenge with Excel is its inability to track changes. When someone makes a change in your spreadsheet, you won’t be able to see what it was, who did it, for why, or even when. Nor can you be certain that information is even being updated. Instead, you end up chasing your sales team for information when they could be working on the next lead.

If your sales team is out in the field, there’s an even greater chance that there are multiple copies of the spreadsheet. These multiple versions of the truth mean there’s little chance of accurately reconciling your data!

Difficult to comply with GDPR requirements

Add to these challenges the imperative to comply with data protection regulations, and things start to look a little tricky. Instances or personal data, in multiple locations, makes data protection impossible to manage effectively and professionally. Excel was never designed to support data protection standards. To comply, you would need to track every spreadsheet, understand the data, know when each entry was last relevant, and be sure that historic data is removed according to your Data Management Plan.

Why use a CRM system over Excel?

To keep accurate records and enable your team to manage their customer relationships effectively, you need a database – not a spreadsheet. A CRM system is specifically designed to help businesses record, track, and manage complex customer relationships.

CRM databases are purpose-built to manage the whole customer lifecycle, covering everything from initial marketing through to post-customer re-engagement. There is no need to constantly reinvent and reformat spreadsheets as each customer moves through the process – CRM is designed to take you and your team though the entire lifecycle.

Instead of an unruly collection of Excel spreadsheets, CRM provides a single tool covering every stage of prospect and customer engagement, designed to be used centrally by the entire team. With multiple users, any changes are tracked, so every member of the team can see which customers are at which stages in their lifecycle – and most importantly, who is responsible for managing the next stage in the process. Never miss a customer call or follow-up again – CRM will track when contact needs to be made, and whose job it is to reach out.

While CRM is designed to help every business to manage its customer relationships, each database is also customisable to your specific business needs. It can also be integrated with your other business systems, such as your finance system and HR system. They can also be integrated with 3^rd party systems and services, for example, TrustID in support of efficient money laundering checks.

Life in business with a CRM

Switching from Excel to CRM brings enormous benefits to businesses who have outgrown the spreadsheet model for managing customer relationships.

Just imagine running your business via a single, joined-up system rather than chasing data and tracking information across multiple spreadsheets and team members. Integration with other business tools means no loose ends – for example, you’ll know when your customer has been added to Xero – and be confident that the information is both systems is aligned.

With all the customer information at their fingertips, your teams can work together to follow up marketing leads, bring customers to your business, and track them through the sales process. There’s no excuse for two people to be chasing the same customer, or worse – assuming that their customer is someone else’s responsibility.

The person responsible for each customer receives reminders and to-do lists to make sure the customer’s needs are met and workflows for each team member are managed throughout the customer lifecycle. Every customer enjoys continued close contact and a deeper understanding of their needs.

Your team are working with a single version of the truth. Everyone can see every customer’s record – past, present, and future, and everyone can see what has been done, and what needs to happen next. If someone leaves your company, all the information is seamlessly transferred to the new account owner so the customer isn’t left having to reintroduce themselves. If you want to run a campaign to a particular sector, no problem! CRM can handle the planning and tracking, without producing yet another spreadsheet – then it can track the results so you can tell if the campaign met its objectives.

CRM provides clarity, joined-up thinking when tracking customers and leads, integration with other business systems, and more effective ongoing relationships with all your customers.

Does my business need a CRM?

Ask yourself the following questions:

• Is your customer data stored in more than one place because Excel can’t handle everything you need to record?
• Is customer data sitting in personal mail boxes because it won't fit in a field in a spreadsheet?
• Have you called a client, only to find that someone else on the team called yesterday, or worse – has everyone on the sales team assumed someone else was going to call a prospect, so no one did?
• Do you have to do a vast amount of number crunching to get a clear vision of your future sales pipeline?
• Are you worried that your valued prospects aren’t being contacted at appropriate times or that a valuable lead has slipped through the net?
• Are your spreadsheet records littered with the dreaded #div0 or #error messages?
• Does every new development in your marketing and customer interaction lead to the creation of a new spreadsheet?

If you've answered “yes” to any of these, or if you’re onboarding more customers than your Excel spreadsheet can handle, or your customer relationships are becoming knotty and difficult to track, or perhaps you don’t feel you have a complete handle on your customer experience – then it’s the time to think about upgrading to a CRM system.