Green growth: How CRM tools drive sustainability for small businesses

Small Business Week is just around the corner, so it’s a good time to reflect upon and celebrate the resilience and innovation that small businesses bring to the table.

Small businesses are the lifeblood of economies worldwide. In the United States, over 33.2 million small businesses employ almost half of the American workforce, accounting for 43.5 percent of GDP.

It’s also a highly competitive space that brings its challenges – building brand recognition and earning consumer trust while also competing for market share, funding and employees means that over 20% of small businesses fail in their first year, 50% fail within five years and around 65% don’t make it to ten.

So what sets the 35% that make it to their tenth anniversary apart? There’s no magic formula, but anticipating and adapting to the consumer mindset as well as implementation speed are often key markers.

The title of Jason Jennings and Laurence Haughton’s bestseller says it all: It's Not the Big That Eat the Small… It's the Fast That Eat the SlowIn the book, Jennings and Laurence challenge the conventional wisdom that large companies are unbeatable through their superior resources. They argue that resources are great, but speed is key – and this is where larger companies can’t so easily compete. They’re generally slower to react and respond to emerging trends and shifts in the consumer landscape and can be more conservative in their approach. After all, it’s harder to turn around an oil tanker than it is a canoe.

The shift toward sustainability

One of the most significant shifts in recent years is the move toward sustainability. Consumers have made up their minds that sustainability is a key aspect of their decision-making process when purchasing products. In PwC’s recent Global Consumer Insights Pulse Survey, over 70% of respondents said they would pay more for sustainably produced goods “to some or a great extent.”

Drilling further down in a subsequent survey, 40% of respondents said they’d pay 10% above the average. Millennials and Gen Z were the most open to spending more for the sake of sustainability, indicating that this is a trend that’s here to stay.

That’s why small businesses need to take action on sustainability if they haven’t already, and for those businesses who’ve already started to continue along that path.

The greatest areas of opportunity may differ from industry to industry, but an underleveraged area across them all is the CRM space.

Three ways CRM tools boost sustainability efforts

At first glance, a CRM tool might not have much in common with a move towards more sustainable practices, but the relationship between the two is closely intertwined. From a business perspective, both CRM tools and sustainability focus on the same key areas: increasing efficiency, reducing waste and long-lasting customer relationships based on shared values and goals.

1. Resource allocation

This is one of the fundamental ways in which CRM tools increase sustainability. Cloud-based CRM solutions reduce the need for paper documentation and physical storage space. Digitizing customer interactions and invoices reduces the carbon footprint and boosts operational efficiency.

CRM analytics can also highlight problem areas for a business, including inefficient, wasteful practices. For example, Pipedrive and other CRM tools use automation to eliminate manual, repetitive tasks such as lead nurturing and follow-up communications. The saved time can be better directed towards high-impact, strategic activities around sustainable practices. One of the biggest roadblocks for companies looking to become more sustainable is finding the time and resources to do so.

2. Customer engagement

The true measure of a CRM tool is whether it helps a business to develop stronger relationships with customers. The stronger the relationships, the more effective the CRM tool and, subsequently, the more sustainable a company becomes.

Businesses can segment their customers more effectively by using required, important and custom fields in a CRM tool, allowing them to develop market campaigns accordingly. By sending the right messages to the right customers at the right time, small businesses can minimize unnecessary marketing spend and reduce the environmental impact that often comes with mass advertising.

Moreover, CRM tools are also there to facilitate better communication and feedback loops with customers. This allows businesses to quickly gather insights, address concerns and continuously improve their product and service offerings for their customer base. This iterative approach enhances customer satisfaction and better anticipates customer needs but also helps reduce product returns and waste, ensuring a business model that’s focused on sustainability.

3. Supply chain transparency

Sustainable business practices are built on efficient, collaborative and transparent supply chains. CRM tools help support businesses in tracking product lifecycles as well as greater visibility and accountability across the supply chain. The immediate knock-on effect of optimization here is minimizing waste, reducing carbon emissions and ensuring ethical sourcing practices.

By enhancing the transparency of the supply chain, there’s also the opportunity to work more closely with suppliers, partners and even customers to drive collaborative sustainability initiatives. By leveraging collective expertise and resources, businesses can implement innovative solutions, such as sustainable packaging, renewable energy sourcing and waste reduction programs that benefit the environment and the bottom line.

The move toward a greener future

In a world where sustainability is no longer a nice-to-have but a need-to-have, small businesses must leverage every available tool to drive positive change. Through optimizing resource allocation, enhancing customer engagement and promoting supply chain transparency, CRM tools can drive business growth while positively impacting the environment. By championing both sustainability and the value of CRM tools, we can inspire small businesses and customers alike to strive toward an even greener future.