When smaller is better

Can customer relationship management software fit the needs of a small company?

If there is one business application with a reputation for being expensive and hard to align with other business goals, it’s customer relationship management (CRM). Consequently, it might seem strange

that the use of CRM is growing in small and medium-sized businesses (SMBs).

The key is focus. If applied to tackle particular, existing problems, CRM can be made to deliver. In fact, some analysts say it is the very lack of focus of larger enterprises that has made their use of CRM more difficult. This theory also suggests that smaller businesses stand to benefit more quickly through implementation.

CRM always belonged in a group of business systems grandly known as enterprise applications. Unfortunately, such systems have enjoyed an ambivalent reputation. They help companies serve customers, develop markets and change the way they do business, but typically only after huge implementation projects that include serious investment. All in all, a smaller business would be forgiven for thinking it was not a good fit for CRM. Returns must be swift, costs must be reasonable and change must be manageable.

However, there is no excuse to brush off CRM anymore. Over the last couple of years solutions from several vendors have been optimized and proven as SMB-ready. What is particularly notable about this development is that, generally, CRM vendors have not driven it — SMBs are asking for CRM themselves. There are three main reasons:

  • They realize that keeping customer data in paper files, email programs, spreadsheets and human heads is a dangerous practice. Even for very small businesses, such information is easily lost, unavailable at the right time or hard to present for analysis.
  • SMBs see that unless they are using the same technology as their larger customers or competitors they could be putting themselves at a disadvantage. Transactions and processes inside supply chains are cumbersome and expensive. The right tools are critical.
  • CRM can make a difference to the bottom line. Better service builds customer loyalty and cuts churn rates. Strategic marketing improves effectiveness and supports revenue streams. And CRM helps companies seize opportunities for growth — as long as they are ready for that growth

Business alignment is the critical issue for SMBs. Focusing inevitably limited resources on the company’s key people issues, processes and technology can make an investment worthwhile. Conversely, an ill-judged effort that is focused on just one of the three will be a waste.

This approach also means interest in CRM can quickly be built and maintained. This too is vital for SMBs, for whom CRM must be seen to swiftly make an impact. If the software has little early effect, support will wane, and that’s a project killer in itself.

In fact, it is quite possible that CRM might be of more help to smaller businesses. One of the most important things to get right is close alignment, but this is often difficult for large enterprises with their siloed business functions, multiple management interests and the varied ways their customers make contact. Many of these issues are dramatically reduced for SMBs.

Research shows that return on investment, cost and functionality are the top three desires for SMBs that are considering CRM. Ensuring that internal systems can be integrated is also important.

A few additional factors are also assisting CRM’s cause. Today’s technology is generally more affordable, easier to use, more flexible, and better suited to faster implementations. Many SMB users of CRM have seen their investments pay for themselves in weeks.

Now that CRM for SMBs has matured and is applicable to companies across a broader range of sectors — including pharmaceuticals, public sector, finance and retail — progressive companies are keen to invest, and realizing more benefits as their applications go live. When it comes to CRM, smaller is indeed proving beautiful.

Edsel Shreve is Regional Manager, Canada, for Siebel Systems Inc.

Got a question for our experts? E-mail [email protected].

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