A few years ago, software application vendors overlooked small businesses, lining up, instead, outside the doors of larger enterprises willing to spend big money on their products and services. But with the new millennium beginning amid economic decline, and Fortune 2000 companies less willing to part with the big money, small businesses became the object of these vendors’ desires. In an attempt to drive sales, they cut prices and small businesses began to purchase hardware and software to enhance their competitiveness.
Initially, companies like Oracle, SAP and Siebel offered subsets of their enterprise software suites as solutions for small and mid-sized enterprises. Soon, other vendors began to create software and services specifically for these enterprises. In 2003 Microsoft introduced a customer relationship management (C.R.M.) product for the small and mid-size enterprise market. Then came the rise of the “software as a service” model as companies such as Salesforce.com, WebEx and Intranets.com proved that organizations of all sizes liked the idea of paying a monthly fee to use their software. Just like utility companies, these software providers maintain the hardware and software so their customers do not have to hire an IT staff.
According to Access Markets International, small businesses added up to $1 billion to enterprise software investment in 2003, a figure expected to double by 2007.
Time and Money Increases (TAMI)
Ask any small business owner what he would like more of and it wouldn’t take long before he gets to “time and money.” Many small business owners are involved in all aspects of their businesses, leaving precious little time for strategic planning. For a company to grow, the owner needs time to build a corporate strategy while maintaining day-to-day operations.
Small businesses are now turning to newly affordable software solutions to automate routine processes, acquire new customers and provide better service to existing customers. A Yankee Group study found the top reasons small businesses build Web sites include meeting customer expectations, providing customer information 24/7, looking bigger and more professional and providing an additional channel of communication for customers and prospects. Gartner Group found that small businesses that implement customer relationship management applications improve efficiency and effectiveness and lower costs. Gartner’s study also showed increased revenues and a measured return on investment.
Small businesses generally waited until the price was right before diving into the technology fray. They demanded applications that were easy to use, quick to install, covered basic processes and didn’t require a steep learning curve.
Time and Money Increases (TAMI)
Microsoft’s entry into C.R.M., plus the emergence of the “software as a service” model, has enabled firms of all sizes to implement complex customer-focused strategies at a fraction of the cost of a few years ago. Major vendors are adapting their own business models to make C.R.M. highly functional, affordable and successful. C.R.M. applications increase access to customer information across all organizational levels via a centralized database. This information is used for, say, targeted marketing campaigns, enhanced customer analytics, contract management and sales forecasting.
Integration with popular software such as Microsoft Outlook and Microsoft Office increases the efficient use of customer information. Equally important, these systems can automate routine business processes, creating a more consistent customer experience from generating leads to service and support.
Keys to Success
It’s important to identify business goals and objectives before making any investment in technology, including defining an acceptable return on investment. Many studies point out management support, employee input, customer input and agreed-upon performance indicators as key determinants in successful technology implementation. Basic goals for C.R.M. include increased cross-sell and up-sell opportunities, increased lead conversion rates, increased customer retention rates, decreased average length of sales cycle and more accurate sales pipeline analysis.
If you’re serious about growing your business, now is the time to take a strategic approach to implementing technology. If for no other reason, do it for TAMI’s sake!
Brent Leary is a partner at CRM Essentials. He may be reached at email@example.com.
By Brent Leary