The Small Business Case for CRM

by Gerry Blackwell

CRM software used to be expensive and complex, but now even the smallest companies can easily and affordably monitor, track and analyze every aspect of their business.

Customer relationship management (CRM), that catch-all term for solutions that automate everything from sales to marketing to customer service, used to be the domain of big enterprises with deep pockets and the patience to undertake mammoth implementation projects.

Not any more, according to Darius Vaskelis, vice president of CRM at Sakonent Partners LLC, a Chicago-based consultancy that specializes in CRM. “Now, CRM is genuinely available to any business, whatever the size,” Vaskelis said. His firm, which provides what it calls “CRM 2.0 consulting,” offers customized solutions for clients with as few as two people that can be up and running in two to three weeks.

CRM solutions also continue to improve. Better analytics and dashboards give managers and employees instant snapshots of activity in their areas. Integration with social media on the Internet is creating new ways to interact with customers and capture prospects in CRM programs. And mobile CRM – which lets you interact returning to the office or finding a place to boot up a laptop – is now a viable proposition.

Indeed, now may be the time for small businesses to make the move into CRM.

Solid Business Case

The business case was always there. When implemented well, CRM systems help companies better organize, monitor, track and analyze customer-facing activities. CRM increases productivity, ensures every lead and prospect is pursued, and it improves customer service and satisfaction. It produces bottom-line results.

Today’s more open, modular CRM platforms have made it possible to implement solutions for small groups and pilot projects very quickly – in days or weeks rather than months or years.

The problem was that CRM was so expensive, so difficult to implement properly, and it seemingly required radical change. That may still be a perception among some small businesses, said Linda Daichendt, a consultant who works with small firms in Detroit. “CRM is one of those concepts, even though it’s been around a long time, that I’m not sure many understand well.”

Small business owners are often too distracted, overworked and obsessed with bringing in new customers to be able to get their heads around fundamental CRM objectives, Daichendt said. These include ensuring that companies derive maximum revenue from existing customers – a much cheaper way to generate revenue than bringing in new business, she points out  – and focusing the greatest effort on the most profitable customers.

Small businesses often view CRM solutions as “too complicated” with capabilities they don’t really need, Daichendt said. “They’re wrong,” she adds.

CRM 2.0 – A New Deal

Vaskelis argues that CRM 2.0, a term that refers to a clutch of recently converging trends, makes the technology much more feasible for small businesses. It’s not just that companies such as SalesForce.com – followed by everyone else, including Microsoft, and even enterprise software providers such as Oracle – introduced small business-friendly software as a service (SaaS) offerings that reduce capital costs by orders of magnitude.

Nor is it just that prices have come way down for all kinds of CRM solutions. (Some vendors, including SalesForce.com and the open source-based SugarCRM Inc. offer basic versions of their products for free.)

It’s also that today’s more open, modular CRM platforms have made it possible to implement solutions for small groups and pilot projects very quickly – in days or weeks rather than months or years. Projects can now be, and often are, driven by business units rather than IT. They don’t require as many, or in some cases, any IT resources.  Both developments make CRM more feasible for small businesses.

In the past, CRM systems had to be tightly integrated with existing internal systems. Now they’re more likely to be “loosely coupled” – a less onerous integration task – and integrated not just with internal systems but also external online data, including social media sites and sources of competitive intelligence.

The solutions are also easier to use. And they’re more likely to be customizable in ways that help tailor them to the people using them rather than – as it often seemed to employees grappling with new CRM systems in the past – the other way around.

“All of this has changed the way people think about CRM,” Vaskelis contends.

Social Networking

In the meantime, new kinds of functionality are also attracting small firms. Integration with social media is perhaps the most dramatic.

Companies have learned that if they build a social networking presence for their brands, customers will add them to their friends list in return for free downloads or other perks. That can give the company access to users’ profiles, sometimes to friends lists and to communication with friends about the brand.

If you doubt that customers will actually agree to this, think again, said Tim Hickernell, lead researcher at Info-Tech Research Group Inc. “People are signing up for things on these [social networking] sites as fast as they can,” he said. “It’s amazing.”

Some CRM vendors such as SalesForce.com have already integrated its solutions with social networks to capture sales prospects. Others are working on it. “I can tell you that every major CRM vendor has a social media plan in progress,” Hickernell said.

Some companies also use customer service CRM modules to track complaints about their products at community-run bulletin boards. They can capture contact information into the CRM system and then ensure that not only are service issues dealt with, but that those communities see the company responding.

Mobile CRM

Mobile CRM has also been around for a long time, but it was often difficult to access and synchronize data. Much has changed, Hickernell said.

Smart phones are cheaper and more powerful. Mobile networks move data faster and are less expensive, with most U.S. operators now offering all-you-can-eat data plans. Mobile functionality in many solutions now lets people securely access and update central CRM databases over the wireless network as if they were sitting at their desks.

All major CRM solutions, including SalesForce.com, Microsoft Dynamics and particularly Sage’s SalesLogix, offer strong support for mobile CRM, Hickernell said. And ACT, the pioneering contact manager application from Sage, now lets customers automatically synchronize data from a corporate server to cloud storage and then synchronize handhelds from the cloud over the wireless network.

Hickernell offers one caution. Small businesses should ask vendors if mobile CRM is supported out of the box. Some charge extra for it.

Even if they do charge extra, the business case is there, Hickernell said – “as long as the mobile culture is already in place.” If sales people can stay in the field longer by using their handhelds to communicate, they spend more time selling to customers. And if they capture time keeping and other reporting data on the spot, it’s more likely to be accurate.

Some CRM solutions can also exploit mobile positioning technologies such as the built-in GPS radios in many handhelds, allowing companies to locate the employee closest to a customer requiring attention.


Analytics is an aspect of CRM that is often under-appreciated by small businesses. It allows companies to understand costs inherent in their processes, where inefficiencies lie, which customers deliver most profit, and more.

Enterprise CRM systems have offered analytics for years. What has changed, Vaskelis said, is that even small business solutions offer surprisingly sophisticated analytics now and make it easier to customize and use them.

“Even the free SugarCRM package includes good basic analytics,” he noted. “You still need to spend a little time tweaking it, but you can’t beat the price.” All or most also now include dashboards that present analytical results in easy-to-digest graphical form.

In the enterprise world, CRM has already become a mission-critical application. Yet small businesses still lag – even though most if not all the traditional impediments have disappeared, and the value proposition has improved.

So what are they waiting for?

Gerry Blackwell is a freelance technology writer based in London, Canada. Read his blog, AfterByte

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This article was originally published on Thursday Sep 17th 2009
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