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The Emerging Enterprise - Customer Technologies Aren't Just For Big Biz Anymore
Customer Technologies Aren't Just For Big Biz Anymore
How to grow the business, keep the customers you have and maintain that Mom & Pop feel.
by Dayna Haberle-Delmonico
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Many IT professionals think CRM is only for large business that can handle enterprise management and an enterprise price tag. That's simply not the case anymore. The obvious return on investment that CRM promises and the saturation of the big business market, forces vendors to
bring CRM offerings into the mid and small business tiers. The players in the SMB CRM tier are capitalizing on the business capabilities of CRM for all business, but they will need to turn around it's reputation of being, complex, difficult to implement and expensive.
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CRM grew out of sales automation and some smaller businesses are starting their CRM initiatives there. Still, Less than 7% of small and medium businesses with 20 to 200 employees have any kind of CRM. Most of the business and customer information of the majority of small and mid range businesses are in word processors, spreadsheets and home-grown databases, but that does not mean they are not interested. As the core of CRM migrates from the Enterprise niche, the interest in integrating of front office functions or "customer-facing processes" — sales, marketing, customer service, field service, help desk and partner relationship management, will gain momentum. Microsoft's recent entry - mid tier level offering should accelerate the interest further.
Why implement CRM?
There are two kinds of customers for CRM: Companies looking to support internal sales reps, marketing departments, field service and customer service staff and companies needing to support external customers-business partners, distribution channel, end-user customer. With the advent of the web, customers have become technically savvy, and they demand to be treated well. Even non-electronic customers expect stellar treatment, or they simply move on to the next supplier.
To stay in business in the 21st century is to deal with the "customer economy". Barton Goldenberg, nationally know CRM guru and president of ISM Inc., a Bethesda, Md-based CRM research and consulting firm, says, "If they are jerked around by a supplier, or slighted in some way, a customer generally won't forget it. And when the economy starts to turn around again, that supplier won't win back those customers lost to poor service, producing a double whammy for that business."
Goldenberg sees CRM as a value proposition. SMB's that successfully implement CRM applications will realize at least one of these six CRM value propositions according to Goldberg:
- Enhanced productivity — a 10%-20% annual increase in the productivity of a company's customer-facing personnel, resulting from having needed customer information readily available. With proper discipline and workforce incentives, this productivity improvement could lead to a 5-10% increase in annual sales.
- Lower costs-a 5-10% — decrease in the cost of sales, marketing and customer service. This benefit results from knowing customers and servicing customers better and more efficiently.
- Superior employee morale — a 10% decrease in employee turnover rate because the employees will face more satisfied. This also will create a stronger pool of candidates applying for customer-facing job openings.
- Better customer knowledge — a complete, comprehensive 'customer profile' as defined by customer-facing personnel and customers within 18-months of the launch of a CRM initiative.
- Higher customer satisfaction — a 10% increase per annum between 100% customer satisfaction and the organization's current satisfaction rating. This increase occurs as more customers receive desired information promptly and completely.
- Improved customer loyalty/retention — a 10% annual increase in customer wallet share, and a 10% annual improvement in customer retention rates. These improvements grow because customers like to do business with a company that really cares about their relationship.
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