Let's take a quick pop quiz. CRM is a) customer relationship management, b) a type of software program, c) a philosophy and way of doing business, or d) all of the above.
If you chose "d," congratulations. Customer relationship management (CRM) isn't just a software package; it's a way of business life. We don't mean to sound like a new age guru, but it really helps to take a holistic approach to CRM if you expect to find success and avoid the pitfalls so many companies have experienced with it.
Like so many newer technologies and techniques, the term CRM has been tarnished by reports of underwhelming results and high failure rates. But the question should be: Can you afford not to have a CRM strategy?
"Nothing should be simpler than deciding that serving your customers better is important. CRM shouldn't be so damn difficult," says Chris Selland, founder and managing director of technology consulting firm Reservoir Partners. If it hurts that bad, you're probably going about it wrong. Selland says that most of the failures stem from businesses approaching CRM as a software project rather than a business process.
"CRM is not a technology; it's not an application," explains Joe Outlaw, former research director and small- and midsize-business CRM specialist at Gartner Inc. "It's a business strategy around interacting with your customers in a way that brings them more value and is more profitable to you." Now who can argue with that?
Once you decide to search for a CRM solution, where do you start? First off, don't even think about software. We'll get to that part later. Your first step is to develop a CRM vision for your business. Some common goals are making your customer service easier to access, gaining a greater understanding of customer needs, reducing sales or support costs, retaining customers longer and getting new customers. Determine where you would like to end up, and then develop a strategy around what it will take to get there. Selland recommends gathering as many high-level people in your business as you can to start a discussion and including your customers as well.
"Put yourself in your customers' shoes," says Outlaw. "What do you need to do to make your company easier to do business with?" Once you know what issues need to be addressed in your company, it's time to lay down the requirements and functional elements for the software application that will address them. Whatever you choose needs to work with your existing setup, whether it's a server, an e-mail program or other software.
Some entrepreneurs go it alone when putting a CRM strategy together. Others look for outside help from consultants or value-added resellers. A reseller you've worked with before can be helpful if he or she is already familiar with your hardware, software and systems. The downside is, most have ties to only a few CRM options, and they'll try to steer you in that direction.
When you do get around to the software component of your CRM strategy, there are a myriad of choices to explore, different approaches of varying cost and scale. The chart on page 40 features some of the available options; it's up to you to decide which one fits your business. We differentiate between enterprise-style CRM applications, on-premises applications and those hosted online. The features listed just scratch the surface of what these programs do. You won't see street prices listed, because these systems aren't sold on the street, and price tags vary widely with the number of users and level of customization.
Although we could sit around for weeks discussing what CRM is and how to go about it, nothing beats just jumping in and taking care of business. What follows are the stories of three very different entrepreneurs and their adventures with CRM solutions.
Making It Work
When Jim Johnston, vice president of business development, was first getting his broadband ISP, DSLindiana, revved up with co-founder Chuck Reed, 44, he wasn't giving much thought to implementing a CRM system. The Indianapolis business, like many others, started out with ACT! as its basic customer information database program. Its salespeople, however, used several different programs, depending on their personal preferences. As the company grew, Johnston, 35, realized that having valuable data scattered across multiple applications like seeds in the wind just wasn't going to cut it anymore. Johnston weighed several options before choosing hosted application solution SalesForce.com.
"The biggest thing for me was to not have to reinvent our processes," he says. "We use it every day, from every angle of the business, from the support side to the sales side." Now, not only is DSLindiana's customer information all in one place, they've also discovered the perks of being able to watch and analyze trends.
Choosing between a Web-hosted CRM solution and an on-site software solution is a basic decision that has to be made. Some entrepreneurs are wary of having their business data stored elsewhere, but this wasn't a concern at all for Johnston. "We did our due diligence on SalesForce. Any company has to do that when looking at a vendor," he says.
Selland adds that businesses shouldn't be afraid to look into hosted solutions. More often than not, a reputable Web host can provide a more secure place for your information than you can. This is also a strong option for entrepreneurs who don't maintain their own servers.
|The Big Time?|
For many, CRM conjures up images of big providers like J.D. Edwards, PeopleSoft, SAP and Siebel. All four have traditionally targeted larger firms by offering enterprise-style software--customizable and complex CRM solutions with industry-specific features. Though famous for huge installations, they've also started to eye small and midsize businesses as desirable places to shop their wares. For example, Siebel offers a MidMarket Edition. PeopleSoft has a host of small- to midsize-business (SMB) applications, and SAP has a set of offerings called Smart Business Solutions.
Most truly small businesses won't look twice at these big boys. "They're overly complex, not flexible. The kinds of things that make them powerful for large companies make them less desirable for midsize companies," says Joe Outlaw, former research director and SMB CRM specialist for Gartner Inc. That doesn't mean there aren't places where these applications fit in. According to Outlaw, businesses that see themselves quickly growing into the enterprise features, or those that already have an investment in other software from the same company, may be interested in checking out the CRM offerings. If that sounds like you, be sure to explore all the CRM options available.
Using a Web-Based Application
Health-care recruiting services agency Provider Management in Portland, Oregon, outgrew its early ACT! database and began to look for a larger, more complete solution. President and founder Stan Smith, 54, faced the challenge of bringing not just one, but five offices around the country together under one system. They settled on SalesLogix because they found the company "open to working with our needs vs. using a canned database off the shelf. They helped tool it for us," says Smith.
Training over the Internet with conference calls got all his employees up to speed on using the software, no matter where they were located. Now, all the remote locations synchronize through the Internet daily to keep everybody up-to-date. CRM is helping Provider Management tie information together and pair customers and candidates in better and more efficient ways. It's a far cry from the pencils, papers and folders Smith started out with in 1997. "We were limiting ourselves. We couldn't do what we do now if we didn't have this kind of support," he says.
Meanwhile, down the coast, Ron and Dana Jiron hope that the third time's a charm. The co-founders of electronics components reseller Inland Empire Components in Lake Elsinore, California, have had two failed attempts at CRM. When we spoke with them, they were just about to embark on a third try with a new and different application: Surado's SCM SQL solution. Their motivations are straightforward. "We need to have better software so we can provide services for our customers to bring us in line with what we aspire to," says Ron, 42. "We want to be like the big guys."
The Jirons see CRM fitting in with the strong customer service philosophy they've had since they first opened for business. "CRM means all the components it takes to develop a relationship with the customer long term and manage that relationship from the beginning of the sales cycle, all the way to the follow-up and the repeat business and the back end," Dana, 41, says.
After dealing with two separate contractors--neither of whom could deliver on their CRM promises--the Jirons feel that Surado is the answer. They did their due diligence and are going with a program that will sync up with their Great Plains accounting software, integrate with their Web site and handle some industry-specific customization they need done.
No matter what kind of business you're in, both Selland and Outlaw make the point that CRM is an ongoing activity, a constant process of improvement. The CRM industry is maturing past the hype stage, recovering from early mistakes and reaching a new level of affordability. Recent news-making mergers are also changing the landscape of offerings. No matter who you go with, there should always be room to grow with a full-fledged CRM solution. Remember that the technology itself plays a supporting role in the big picture of CRM, so rely on your vision, and let your CRM strategy help take your business to the next level.
Where to start? Try narrowing down whether you want an on-site program or a Web-hosted solution, and think about any special features you simply can't live without.
Must-Have Presentation Tools
Make That to Go
For full-fledged presentation power on the road, it's hard to top a laptop. The 4.9-pound IBM ThinkPad T40 is available in a variety of configurations, including models built with Intel's new Centrino technology and Wi-Fi networking capability. Pricing starts at $2,249. Budget buyers who don't mind some extra weight can check out the ThinkPad R40e, which starts at $899.
Street Price: $2,249
Pack a Punch
At 5.3 pounds, the XGA resolution Toshiba TDP-D1 weighs more than some laptops, but it packs 2,000 lumens of brightness for large meeting rooms or situations where the lights can't be dimmed much. A projector like this is a good choice for keeping on-site at your business or taking out for the occasional sales trip.
Street Price: $2,695
Now Presenting . . .
Leave that laptop behind, and just take your PocketPC or PalmOS device without sacrificing an effective presentation. The Margi Presenter-to-Go comes in the form of an expansion card slot adapter that lets you hook a PDA up to a projector or display. It features PowerPoint integration and also works with Microsoft Office programs. Even better, Presenter-to-Go comes with an infrared remote. The whole bundle weighs just 0.75 pounds, so you won't have to sweat it.
Street Price: $199
What a Lightweight!
It's all in the presentation. When you or your salesperson is out on the road, make sure to take along a top-notch but lightweight projector like the 2.2-pound ViewSonic PJ250. Its 1,000 lumens of brightness and XGA resolution will handle most meetings just fine.
Street Price: $2,200
Apple of Your Eye?
Apple's Keynote 1.1 presentation software, compatible with PowerPoint files, came out earlier this year to compete with Microsoft's famous product. Mac-toting entrepreneurs will be interested in this alternative. Designed to handle intense graphics, its preset templates make your presentations look professional, with less hassle.
Street Price: $99