Customer relationship management (CRM) solutions are fast taking hold among SMEs. Installing solutions such as a CRM system can give your business a distinct competitive advantage by placing your customers at the hub of your business.
However, your confidence in the CRM system is paramount to its success. Since its inception in the late 1990s, CRM has been saddled with the perception of being high cost and high maintenance, deployed on a vast scale with a one-size-fits-all approach. The systems have been heavily tainted with the same perception associated with enterprise resource planning solutions – a big system for big enterprises, a luxury not afforded by companies such as yours. “[CRM] was mis-sold and it went through a negative period,” says Gerry Carr, marketing manager for CRM specialist Accpac. This perception problem is probably the biggest barrier that companies like yours will have to overcome in order to effectively support and manage business plans.
For you to grow your customer base and grow your business from existing customers, you will have to understand exactly not just who your customers are and what they bought, but also how it was sold to them and when. In short, you need to have automated sales information and better sales analysis. “What [SMEs] want is a central data repository so they can see whose buying and who’s a repeat buyer,” says Annette Giardina, business director at reseller Aspective.
At its most fundamental, CRM systems will provide a focal point of contact for all customer-related information, enabling greater understanding of your customers. In order to acquire this knowledge, you will have to place great demands on your technology suppliers to deliver not only a CRM system with all of the functional elements to support your needs, but also to establish an effective training and education programme to enable your staff to get the best from the technology.
Research by Computer Weekly in association BT suggests that nearly one-third of business like yours have no dedicated IT department, so it is likely that you will have to make technology improvements without the aid of internal logistical support. This means it is very likely that you will have to invest not just money but also trust with a CRM reseller to find a solution that gives your business a fast return on investment.
Attention from CRM vendors to the SME community has gained momentum as the enterprise CRM market has reached saturation point. Even though vendors like Microsoft have boosted awareness of what has been formerly a high end product to SMEs, making CRM relevant to the SME community was never going to be easy for vendors. “SMEs have realised that [CRM] products exist and are affordable. Microsoft has helped in their education,” Carr adds.
One of the biggest frustrations that you may experience is customer retention. This is largely the result of a lack of understanding of the sales cycle and co-ordination of customer data in a centralised location. By managing this information, the CRM system will enable your marketing department to identify and target customers, to help manage marketing campaigns and generate quality leads for your sales team. But above all it will provide your salespeople with the information and processes necessary to know their customers and to understand the customers’ needs, and in doing so build relationships between your business and your customers.
CRM system vendors are fully aware of such matters. “The ultimate aim is to consolidate all systems into one CRM system,” says Ian Farthing, VAR manager for Onyx. “If you’re an SME and you want to keep on growing, you want to be able to see all the activities of your business in an easy way. This gives you a 360-degree view of your customer,” adds Aspective’s Giardina.
As a result, the most important way CRM systems vendors can support and develop your customer relationship strategy is by instigating a cultural change. “CRM isn’t about technology, it’s about a cultural change. The software doesn’t change a business on its own; it goes hand-in-hand with change in the business,” says Phil Robinson, vice president of marketing at Salesforce.com.
“If your customers aren’t in the forefront of your thinking your business will fail,” agrees Onyx’s Farthing. But he also says end users are sometimes not demanding enough of the people they are trusting to improve their business. “There is an element of laissez faire with smaller SMEs who are probably more used to buying off-the-shelf.”
Tighter budgets and fewer resources mean the sales process is even more critical to companies like yours, who will not be merely adopting CRM blindly under orders from a distant CIO, but will have a much more personal role in changing the face of the business.
Many CRM system vendors feel that training is a critical and necessary part of the sales process, to ensure optimum results from the installed CRM system so it meets the requirements of your customers. (You should note that it is also a lucrative service for them to provide.)
Education is such an essential part of the sales process, according to Monica Visconti senior marketing manager EMEA for CRM vendor Remedy, that it can make or break a deal for buyers and sellers alike. “[SMEs] know what they want but they don’t know how to equate that to vendor-speak. CRM has a dirty name; it’s up to vendors like us to educate them, and the channel. It has to become a solution sale, it’s about doing more with less, as a lot of these organisations don’t have the budget,” she says.
“And if you don’t know anything about training we recommend a one day training course,” adds Aspective’s Giardina.
But you should remember that the training itself has less to do with the software and more to do with your adoption, says Neil Morgan, vice president of marketing, Emea, at Siebel. “It’s more about cultural change and being more customer driven. SMEs see a CRM project as a way to do this, but if the users don’t believe in it, it won’t work. Partners can allay the fear of the unknown, and as a result education and consultancy from the channel partner is crucial. If the users and [their] customers don’t get behind the product it will fail,” he says.
It’s crucial for your system sales representative to convey the CRM system’s ability to create greater access to your company information and to be able to communicate it rather than dwell on all aspects of the technology itself. As a result, hosted options are being touted as an effective solution because the technology vendor deals with the technology, leaving you to take care of your business.
Siebel and IBM now offer CRM OnDemand, which follows in the footsteps of ASP Salesforce.com, which offers a hosted CRM package based on a pay-per-user-per-month scheme. “OnDemand cuts out all the pain, there are no servers and no databases to manage; you go to a website and log on, and it makes it so easy. The host model is very now; in the SME space it’s much newer, and people are often sceptical about something new,” says Siebel’s Morgan. This is proving a very palatable solution for SMEs, according to Monica Visconti.
Phil Robinson of salesforce.com, not surprisingly, concurs. “Web hosting complements the need of the SME more than the traditional method, and delivers at a much cheaper cost fundamentally. The reason salesforce.com has been so successful is because it’s the antithesis of traditional CRM. We are managing everything for the user, but we still allow you to customise and configure. Most organisations don’t know who their customers are and are selling the wrong products to the wrong customer. Our [sales] channel partners go to talk to the user as part of the service; traditional enterprise software organisations sell through high-end direct sales people and don’t understand SMEs’ needs.”
Other services about which your CRM supplier should be forthcoming are data cleansing and integration with your existing systems. This point is picked up by Alan Macneela, vice president of research at market analyst Gartner. He believes there’s an opportunity for suppliers who deliver CRM to SMEs with as little pain as possible, including the painless facilitation of any integration issues.
Despite the efforts of vendors to make CRM more SME friendly, tight budgets and a general lack of understanding are still taking a toll. “I don’t think there has been a massive take-up on CRM anywhere and SMEs are the last to come to market. They need to focus on the worth of their customers and retaining them,” says Farthing of Onyx. He says that despite tough market conditions and perception problems, you will begin to embrace CRM as awareness and understanding increases of how it can help your business.
Partial commoditisation of the product could also help CRM proliferation and erode mis-informed preconceptions. “A lot of [CRM] is commoditised already and big vendors like Microsoft will legitimise it. At the moment many companies shy away because they have heard things about CRM. SMEs don’t need the functionality and deep integration they need to understand CRM and what it can do for their business,” Farthing adds.
Suppliers must realise that if they are to sell successfully into your business space, they must make the buying process as straightforward as possible. Raised awareness and the commoditisation of CRM may go some way to changing CRM’s image as a rigid, antiquated system. But, ultimately, the biggest determinant in the success of CRM is not suppliers bringing costs down, reducing complexity or even proving return on investment, but how they earn and maintain your confidence in improving your business.
Six tips on implementing CRM
1. Consult your staff before purchasing any kind of CRM system, do not spring it on them. The biggest barrier to the success of the CRM system is the perceptions of the people who will use the system.
2. You need to know what you want CRM to achieve before you install it.
3. You may want to think about adopting a hosted solution.
4. Don’t implement CRM and think that’s that. The implementation is just the beginning. You need to keep reviewing your business model to make sure it all works.
5. Always train staff.
6. More expensive does not always equal better.