SMB Research has a great interest in Customer Relationship Management (CRM). After all, we focus on the technology research needs of Small-to-Medium business. Features that allow companies to know their customers better is what drives Small and Medium business to be able to grow and thrive. Competition can be fierce for Small-to-Medium Businesses (SMB’s) and having the ability better know ones customer is essential. So how does CRM allow companies to know their customer better?This would include:
- Integration of CRM to social media like wikis and blogs and RSS feeds
- Careful tracking of each customer/prospect interaction that is readily available
- Integration to Outlook/Calendar to capture all relevant data points
- Customer profiling/segmentation
Ofcourse, users need to be diligent about entering data and the right data. And ofcourse user adoption is always a key consideration for success or failure of an implementation/investment. Flexibility of software as a service and ease of use has made many of these vendor offerings very successful. A key factor that enabled this success was the flexibility in cost model and usage to allow users to adopt Software as a Service (Saas). This allowed users to pay for software by the month instead of a large and often cosstly lump sum. It also enabled users to enter data remotely through a web portal thereby increasing potential usage and adoption of the software. This is a very different world than the horror stories of 5 years ago and more when CRM implementation failed as sales reps and other users refused to enter data. Without this, companies can not properly mine data for customer or prospect insight.
With CRM it is not just about the customer. Some companies may say that we don’t need CRM as we don’t have enough customers. That is a big mistake as CRM can be heavily used to track our pipeline of prospects and try to help move them to become customers quicker. If the CRM system can help identify ways to get the prospect interested sooner (through best practices learned from previous customer experiences), than that helps the sales force close the business sooner.
At a previous research company, not only did we spend alot of time with clients over the last 10 years that were making CRM selections, but as a research start up we need to make a CRM selection of our own this year. Currently our information is going into Excel spreadsheets wehre it is not easily searchable. Furthermore, employees are staring to make contacts and we need a central repository to ensure we avoid duplication which can be costly for customer perception.
We think 2010 is going to be a great year for CRM, in the SMB market for sure. We are currently conducting a short IT planning survey and early results show the CRM is the most active area with nearly 30% of the respondents having CRM selections or implementations underway. This was more popular than any other major category including ERP, Desktop Management, Infrastructure investments, and Knowledge Management. More results will follow by SMB segment size and vertical industry later this month.
So with a strong interest in CRM from survey respondents, this is an area we want to write in detail about in our upcoming research. SMB Research believes that CRM is more important than ever because:
- Competitive Environment— In an increasingly competitive environment what separates a thriving company and a stagnant or failing company is the ability to secure prospect and customer information to have available on demand to necessary employees. Having the ability to simultaneously merge, share, utilize information among a staff in the several hundreds will allow companies to better obtain new customers and keep customer service levels high enough to retain and renew customers for the long term. As many know, it is much more expensive to obtain a new customer than to keep existing customers. Thus, companies must have the right information to ensure they keep current customers happy.
- Heart of Customer Experience— CRM systems are at the heart of the customer experience. Thus, with evolving social media like wikis, blogs, tweets, that can be used to attract customer and have the right pulse of their needs, the CRM needs to sink up with this important insight. Vendors like RightNow have been at the forefront of bringing social media to CRM.
- Success driven by Sales and Marketing —Many small-to-medium businesses succeed or fail by effective sales and marketing. So natural a CRM system incorporates Sales force automation and Marketing Automation. So this is many cases is an SMB’s most important technology asset.
SMB Research is a Small-to-Medium Business that needs to be driven by effective sales and marketing. We are looking forward to moving forward on our system selection process. Despite our size, the vendors are very responsive already with immediate call backs to our information requests–clearly they are leading by best practice in CRM that they compete in on daily basis. From working with larger Fortune 500 clients, SAP and Oracle CRM were always considerations. But we as an SMB these offerings are typically overkill for our business.
We use Microsoft Outlook so there is always the possibility of using a Microsoft CRM product, maybe Dynamics for our CRM. Then ofcourse, there are some of the popular software as a service offerings (Saas), most notably Salesforce.com. Many sales reps use Act Software which is now owned by Sage Group. While this is more of a contact center product, it has made CRM iprovements over the years. So this will be considered given we are less than $1M in revenue and may not need advanced CRM features. But many Saas offering have very competitive base pricing which for only a few users could be only a few hundred dollars a year for a company. So that is definitely a consideration. The good news is that many of these vendors are very hungry for business even it these only amount to a few thousand dollars a year. The hope is that the vendor can help these businesses grow and subsequently be able to charge more for more feature rich modules and users. Often the potential users can demo the CRM software in free trials and that is what we are doing. We can create customer records for a month and then export that data to the newly selected system.
We need to think about our requirements, how many customers we will have and how big we want to grow. Plus a host of other requirements around technology enablers within CRM and connections into other offerings like Google. Ideally, we pick a product and vendor that can help us grow into a larger enterprise with more functionality needs along the way. But it must be easy to use. From past experience we have seen many CRM implementations fail as there was not enough buy in from those that need to use it, or who are supposed to use it.
In our past research and from talking to a number of Small-to-Medium Businesses there is a lot of buzz around Salesforce.com. It has been able to grow year after year through is software as a service options and really gave Siebel (now owned by Oracle) some real challenges. So clearly, Salesforce.com has a lot of mind share. We spoke to 2 small and medium business recently. One, TL Sports Sales, an sports apparel company selected Salesforce.com. They have not fully implemented it but are very impressed with the cost point and functionality. K & J Recruiting an IT and Financial recruiting specialist, located in Braintree were very close to choosing Salesforce.com for their business. They were impressed with the robustness of Salesforce.com and affordable price points. However, at the end of the day for specific recruiting functionality and integrating sales to recruiting processes, Saleforce.com lost out to recruiting specific software vendor, BullHorn. Salesforce.com is clearly compelling starting as low as $5 month per user for the very basic module. Of course this is not sufficient for a many businesses, but it is a good price point to test the product without a lot of risk.
While early on in our selection process and building our requirements, we have done a lot of research on the vendor marketplace. So some vendors currently under consideration include Salesforce.com, Microsoft, RightNow, Digital River and Sage Group. Sage Group actually has 3 possible products from various acquisitions we could use including Act, SalesLogix, and Sage CRM. We even used their product choice configurator to help point us to the right product based on our business, size and industry. However, the results were not very helpful. We will see how these and other offerings rate to our company’s most important high level criteria that includes Sales Force Automation, Marketing Analytics, Marketing Automation, Tie in to Social Communities, and Online Sales/Ecommerce. Clearly, we know some of the vendors will not make the cut. But a number of them may fit the bill so it wil come down to price and flexibility to work with us.
We will be reaching out to a number of our survey respondents who are selecting CRM to help them as well as provide our research findings back to them. Stay tuned for more on CRM for Small to Medium Business.
Would love to hear your comments.