EntreQuest is a Baltimore-based sales training and consulting firm that practices what it preaches. When the company's Salesforce.com-based sales automation system couldn't meet its custom reporting needs, the company began to look for an in-house customer relationship management (CRM) system.
EntreQuest chose Microsoft's Dynamics CRM and the results were immediate. The firm is on track to nearly double sales in 2006. Customized reports give management a constant view of the company's prospects. And Microsoft CRM integrates with the Outlook e-mail client to make training a snap.
"I have better insight into our pipeline and how we're bringing on other salespeople," says Joe Mechlinski, EntreQuest president.
EntreQuest is like thousands of small businesses that outgrow their tolerance for spreadsheets and low-end contact managers and look to full-blown CRM systems to help grow their businesses. Done right, CRM can help small businesses track their customers from first contact through a long, rewarding and profitable relationship.
Recently, a flood of new companies entered the market selling CRM as a hosted service over the Internet, including Microsoft and Sage Software. There are more than 30 options in this market, offering hosted CRM services for as little as $20 per user per month. Small businesses have been late adopters — in part because of CRM's poor track record over the past 10 years. A frequently cited study by market research firm Gartner in Stanford, Conn., five years ago found that more than two-thirds of all CRM initiatives failed to deliver any measurable benefits. Many early and expensive CRM investments suffered from inadequate user training, misunderstanding of the data collected and poor integration of customer information from different parts of the sales and supply chains.
But now that early CRM pioneers have blazed the trail, catastrophic horror stories are much less common, and small businesses have a richer body of products and experience to draw upon.
Timing Is Everything
When is the best time to make the move to CRM? One good indication is if your business has multiple touch points with the customer. For example, if sales and service reps are both dealing with customers on a regular basis, they'll benefit from having a single contact record. Or if your sales force has grown to the point where multiple salespeople serve the same account, CRM will minimize confusion.
Another good indication that it's time to move is when your accounts get bigger. Large accounts may have several internal contacts and that can get confusing. CRM gives you a coordinated view of the customer, allowing you to track all activity from one place and share the information throughout your organization.
An expanding product line and four separate sales groups potentially calling on the same customers led Webasto Product North America to deploy Microsoft CRM after it consolidated two previously separate product groups into a single company of more than 100 employees. The Fenton, Mich., maker of sunroofs, thermosystems and other aftermarket automotive and marine products needed to centralize customer information that had been maintained in Goldmine CRM software at one unit and in a combination of ACT! with Outlook/Exchange at the other, according to Chris Perry, the network systems manager who oversaw the deployment of the new CRM system.
1. Get Focused
CRM is a process, not a technology. And a successful project always begins with understanding objectives and automating where it makes sense.
Many vendors offer integrated suites of CRM software, but looks can be deceiving. "Companies say they provide everything, but if you look at what they do well, it's not necessarily so," says Chris Selland, of SoundBite Communications. He advises looking at a vendor's roots to understand where its strengths are. A CRM vendor who started in sales automation is probably going to better help your sales effort.
2. Get Buy-in
Experts say the kiss of death for any CRM project is putting the IT group in charge of it without adequate involvement of the sales and customer service teams that will actually use the software. A line-of-business application like CRM needs line-of-business ownership. IT is a key player, but not the business driver.
It's a good idea to form a steering committee made up of business owners as well as tech people. Make sure some of the software's ultimate end users are on the committee. They'll help sell the solution to their colleagues. Otherwise, if the sales department sees the tool as just more paperwork, they won't use it and the investment may be wasted.
3. Be Flexible
Good software has best practices baked into the code. So, rather than adapting software to their organization, some companies do it the other way around.
Arbutus Financial Services, a Vancouver, British Columbia-based financial services adviser, harnessed the power of a CRM system to grow its business by tapping the system's ability to provide remote access. The company acts as a hub for a small network of independent advisers who draw on Arbutus services to support their clients. The CRM system's remote access features now enable Arbutus to add advisers to its network who could never have used its services before.
"I can't express strongly enough the benefit of having full-blown remote access from anywhere," says Neil Menzies, Arbutus president. "We now have an unlimited opportunity to add financial advisers to our firm."
Yet small business owners who've had success with custom-developed systems recommend the reverse approach: building existing business processes that have proven successful into a CRM system. Mitchells/Richards/Marshs, a family-owned, $70 million high-end men's and women's clothier based in Connecticut, has been collecting data on its customers and using it to provide world-class customer service for more than three decades. CEO Jack Mitchell recommends fostering customer-centric practices throughout an organization, then building those practices into a powerful CRM system. (See The Lowdown column, Page 56.) "Our sales associates recognize how important it is to get the proper data on their customers," he says. "The mentality is the personalization of the relationship, [but] it's very difficult to remember everything about everybody. That's why we have technology."
4. Consider the Future
Rapidly growing businesses should consider a solution that scales up and out. "Look for something that has an open architecture so that bolt-ons are available," advises Jeff Tanner, a consultant and marketing professor at Baylor University. For example, a catalog retailer may want to integrate global positioning data or a package tracking services within its customer services system.
A company that expects to scale from 50 to 200 employees must ensure that the CRM package it's considering is up to the challenge.
In that case, it's probably best to look to a vertically integrated vendor that serves both small business and enterprise markets and promises to stay with you as you grow.
CRM can be a big investment; a fully loaded installation averages $500 to $1,000 per user. But when it's done right, it can take a business to the next level.
Just ask EntreQuest's Joe Mechlinski. "The initial investment seemed like more than a small company like ours could afford," he says. "But it's allowed me to make better decisions. We're going to grow the business substantially this year."
"Since the merger, the product lines have grown, which has caused multiple sales reps to call on the same accounts," recalls Perry. Not only did the Microsoft CRM software integrate easily with other Microsoft applications such as the Great Plains accounting system Webasto uses (as well as Microsoft Office applications Exchange and Sharepoint), it also provides a central repository for customer data that is now shared among sales groups, the marketing department and the technical support group. With its previous use of Goldmine and ACT!, users would create databases of customer information but did not always share them with other departments.
"Now, sales reps have a better understanding of where the customers are, before they walk in or make a phone call to an account," Perry says. "Real quick, they can get an overview of everything that's transpired at that account. Before, that account [info] may have been in several different areas; now it's in one."
Webasto's CRM implementation was not without its pitfalls. The company went live with Microsoft CRM in May 2004, but the 1.2 version of the software it installed didn't live up its billing. Not until the company moved to Version 3.0 earlier this year did they see all the benefits. "It's night and day," Perry says of the improvements Microsoft has made over the past three years.
There are three major categories of CRM: Sales force automation enhances sales productivity through lead management and contact tracking; marketing automation software helps companies balance online, print, direct mail and event programs; and customer support, which is a broad category covering things such as call-center management and customer service.
A small business doesn't need to boil the ocean with a comprehensive CRM package, experts advise. It's fine to start with one module and then grow larger. But be sure you choose a vendor that has the strengths you need.
"If you're primarily a sales-driven organization, then you need something with a sales automation background, but if you're driven by client service, then that package may not be best," says Jeff Tanner, a consultant and professor of marketing at Baylor University's Center for Professional Selling. "Look at what your strength is and match it to the strength of the software."
Choosing a CRM provider is a big decision, and experts say busy small-business owners often don't think through their needs. "People are immediately trying to figure out whether to go Salesforce or Microsoft, for example, without understanding what they're trying to accomplish," says Chris Selland, a SoundBite Communications executive, longtime CRM analyst and past president of the CRM Association.
That's where careful planning and an analysis of business needs come in. All CRM is not created equal, and the wrong choice can be expensive and frustrating.
Additional reporting by Rob Garretson