CRM for small businesses; pipe dream or reality?

CRM for small businesses; pipe dream or reality?

Is Customer Relationship Management (CRM) like the latest cure for __________, (you fill in the blank with whatever you fell is over-hyped today) all hype with no foundation? The Internet and printed media is awash with customer relationship management (CRM) related information and most of it focuses on how to boost your profits by concentrating on profitable clients. There are also scores of articles written about how many CRM installations have failed to meet the expectations of the business. Want to know how you can avoid being a CRM failure and make the most of this great business tool in your company?

CRM that works.

Sound CRM begins with the customer as the focal point. Only then can CRM become a strategy to combine all of the company’s culture, processes, and technology to create and sustain healthy customer relationships - leading to continued growth and profitability.

Certainly CRM is not just about technology, which is without a doubt the final layer in achieving an effective overall CRM strategy for the business. Without a company culture that considers your customers as an affordable long term investment, there will be little or no commitment from your employees to achieve true CRM.

It is vital to invest the time to ensure the right people and proper processes are formalized and place the customer at the heart of your organization. Once the other building blocks are in place, technology should be added to deliver the real business benefits that can be achieved.

What happens first?

Based on this philosophy it is important to understand the roots of most small to medium sized business before investing in technology. Typically, an entrepreneur starts a business with an idea or set of expertise, along with a vision from which they build their business. In some cases they will conduct research to test market feasibility, and in others they will rely on gut feel.

Research into individual’s thinking patterns has shown that people are either right or left brain dominant. For clarification, the right side of the brain tends to drive emotions and vision, concentrating on the big picture for decision making, the left side of the brain will be more logical and analytical. It is not unreasonable to assume that a high percentage of entrepreneurs are right brain dominant. Therefore, smaller organizations are principally driven by right brain dominant individuals whose attitude will be "just do it and we can figure it out as we go”.

The business is be driven by passion for their vision and like minded employees may be recruited. At this stage in the business' life cycle, commonly called “Start Up”, there will be few processes and procedures in place or documented. Almost everything will be done in any way that gets the task accomplished. The business may well be growing quickly at this stage, and the entrepreneur does not yet appreciate a need for such "systemization".

For technology to stand a chance of helping the company at this stage it has to be quick to deploy and cost effective. These solutions must deliver rapid benefits and address some of the organizational issues that are constantly popping up; including automated production of invoices, having a customer database, easier and quicker marketing, client history and task lists for employees. These initial solutions often operate as remote silos of information, driven by personal productivity and gut feel. Nothing is really tied together and very little analysis is being done on the data that is collected. Therefore, no real business intelligence is available beyond a basic Balance Sheet or Profit and Loss Statement.

Assuming the initial vision of the entrepreneur is sound and the company starts to grow, there begins to be more pressure for organization and structure. It becomes obvious that data is duplicated, triplicated, or quadruplicated - but not shared, and the owner/manager has lost touch with the day to day running of the sales and service teams. While sales still may be rising, so is the level of customer dissatisfaction. So the search for a software tool to solve the problems begins!

So it begins

Entrepreneurs typically lead small businesses that have up to 50 people working in them. In the beginning they look for a solution that can be deployed quickly, without disrupting the still fragile organization but solve key operational problems. The solutions considered need to encompass basic reporting, activity tracking and analysis, workgroup contact management, sales forecasting and some basic service call logging. The focus usually will be on relatively short term goals with the focus being centered on immediate customer service rather than long term customer relationship needs.

The type of individuals and managers that would take a longer term and more analytical approach to the CRM technology are not within the organization in most cases. Any solution that is too sophisticated and complex or that takes take too long to deploy would not be utilized effectively. The net result of this would be a confusingly complex system that users don't like and hence resist at all points. Anticipated business benefits are not delivered due to low adoption, contributing to another CRM failure!

The Next Level is Achieved

As the organization grows into a medium sized business with greater than 50 employees, it must start to change culturally to survive. If it does not start to embrace some of the necessary process and procedures and stricter financial management techniques, there will be chaos internally and customers and suppliers will not be satisfied with falling service levels.

Individual departments will require Business Intelligence information which, if not held centrally, cannot be provided:

• Sales require an understanding of the sales methodologies employed and to understand the key sales metrics such as win/loss ratios, forecasting sales pipe-line accuracy, and overall sales effectiveness.

• Marketing needs to understand the effectiveness of their campaigns, lead source analysis and strengths in the customer base.

• The Service Department needs to measure service levels, service escalations and service level agreements to ensure high level of customer satisfaction.

• Finance will move from a bookkeeping type exercise to a more pro-active role providing management information to aid business decisions. This requires an understanding of the company's cost centers and analysis of the customer base i.e. who are the most profitable customers and the costs associated with keeping them.

In essence, there is now a transition from a business that is lead by entrepreneurial gut feel, to one inspired by entrepreneurial vision but executed through tactical operations. The entrepreneur becomes the business strategist, providing ideas and strategies that must stand the analytical tests of the operational team required to execute them.

For this organization to continue its growth; it requires a solution can be rapidly deployed at the outset but is sufficiently flexible to service the distinct needs of individual departments and can integrate the various front and back office functions as the company grows. If you would like to see a solution that has this type of flexibility, please check out our BestFit Business Manager to find out more about BestFit Business Manager.

Summary

The reason so many CRM installations fail to meet their objectives is not because the technology fails, but because the users of that technology forget that the purpose of CRM is Customer Relationship Management. If the company strategy does not have the customer at its core, then CRM will be of little help. On the other hand, if the company puts the customer at the center and organizes itself in every way to support and listen to the customer, then CRM can be the pathway to long-term success.

To embrace a true CRM strategy requires planning and effort that few small businesses, unlike their large cousins, posses. Most small businesses, and some medium sized ones, don’t have the background, skills or resource to successfully adopt and implement CRM without help. If you would like some assistance with developing and implementing a CRM system, we hope you will consider BestFit Solutions for the task. Please see http://www.bestfitsolutions.com for more information about the many ways we can help you and your company.

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