A Customer Relationship Management (CRM) Software & Social CRM Blog

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Welcome to my blog.
This online forum shares experiences, lessons and learning about selection, implementation and continuous improvement of Customer Relationship Management software (CRM) systems, Social CRM (SCRM), Sales Force Automation (SFA) systems, Marketing & Lead Management systems, and Customer Service applications.






When Is It Time For Small Businesses to Invest in CRM Software?

Guiding Considerations to Implementing CRM Systems

Perhaps the business you started a few years ago is humming along, and after lots of hard work, you're starting to see some real traction. Revenues are building and your customer list is progressing as well. And that's the problem – as your business continues its growth, it's starting to become noticeably tougher to deliver consistently superior service to your customers.

So is it time to start thinking about a Customer Relationship Management (CRM) system to help keep your customer communications, transactions and relationships all organized and flowing so your business can continue to grow without the growing pains? When you start asking yourself this question, there are quite a few things to start thinking about. Here are some considerations for your checklist:

So at what point in your business should you start thinking that CRM software should be adopted? When you reach a certain number of customers? Or is the deciding factor a certain level of revenue or sales or when your own staff reaches a certain number?

This is not a straight forward question, and there is no one answer for everyone.

The best advice is probably that you'll know you need to start evaluating CRM systems when manual business processes becoming overwhelming. When you reach a threshold of customer accounts where managing them, doing the follow-up calls, responding to inquiries and keeping your sales churning becomes more onerous than in the past, then you'll likely be thinking that something's got to change. That's a good clue it's time to grow your business automation and look closely at CRM software.

Rob Enderle, an independent IT analyst in San Jose, California, said you will know that it's time for CRM automation when you hit a critical mass in your business workload. "You bring in CRM software when the customer number gets beyond what the executive staff can personally monitor," he advised. "The point to CRM software is to maintain consistent customer satisfaction and once a company reaches a size where sales and support, without oversight, are the primary aspects of maintaining customers you bring in CRM as a way to put executive oversight back on maintaining customer loyalty. It's a tool which allows a few executives to keep track of more customers than they can touch manually."

Another factor to consider, he said, is to move to customer relationship management software "as soon as you realize that regular customers are being disenfranchised by executive management and hopefully before you notice a customer churn problem that will likely soon follow."

So is there a certain number of customers to consider the move? "After about a 100 customers you should be thinking of CRM," Enderle advised. "It's more of a numbers game for breadth. In terms of revenue you need enough margin to be able to afford the tool." But it's still not for everybody, he said. "CRM systems work best where personal relationships need to be maintained so certain industries don't lend themselves to the tool."

So where do you start? First talk to everyone your business touches. Talk to your customers to find out what they need from you in maintaining great customer relationships with your company. Ask them if they have other vendors who use CRM systems that your customers find are working well. Maybe some of your customers are already using CRM too, and you can learn from their experiences.

Talk to your staff. What tools would help them do their jobs better? What problems in their business work flow would they like to see fixed? Ask them for their help, listen to them and take copious notes. Take their concerns with you when you speak to vendors.

Go to local business trade shows in your area and ask other business owners what's working for them and even how and when they decided to pull the trigger on implementing a CRM system. You're not the first one to do this, so be smart and learn from the experiences of others, and as importantly, learn from their mistakes and save yourself and your business the headaches.

So how do you choose a vendor? Talk to value added resellers (VARs) and direct CRM software vendor representatives. Go to CRM software trade shows, read all you can online and turn yourself into an educated buyer. You wouldn't buy a new car without doing deep research on customer reviews, fuel mileage, crash safety ratings, reliability and resale values, so don't look at CRM systems blindly.

Ask the software vendors lots of questions. Ask about scaling and capacity issues with the CRM applications as your business continues to grow. Ask about how it will work with the other applications you are running. Will the CRM system integrate easily with your accounting software or ERP system? Think about the future. What will you want it to be able to do in two years as your company grows? Will you easily be able to add new features or software modules?

Then when you pick 4 to 8 CRM products that you are impressed with and dig more deeply. Whittle them down to your top four. Ask those companies to give you detailed software demonstrations. Ask them to use some of your customer data and see how it all is displayed and organized and how it will work.

Include some of your key employees in the discussions. Are there products that they think are easier to use? What do they think are the most important features?

Those steps – talking to customers, other CRM users and your staff are very important, Enderle said. "Before making the move and selecting a CRM vendor find out what other companies in the same industry are using and why, also find out if your own people have experience with any particular tool and factor both into your decision process," he explained. "Switching CRM systems can be very painful and spending quality time up front in the software selection process can pay off huge dividends over time."

Don't be shy. Challenge the vendors. Challenge their claims. Make them show you what they mean when they say the product will do something. Now is the time to walk out of the room without any doubts or remaining questions. You're about to spend what could be a lot of money to advance your business for the future.

So what about hosted CRM? Should I consider this over an in-house installed application?

This may be a viable option, particularly if you have a small IT staff, or no IT staff. There are good vendors out there offering hosted Software-as-a-Service (SaaS) CRM solutions which can help you adopt CRM with less hassle than doing it yourself. If the SaaS CRM advantages of reduced cost, faster time to market or outsourced management intrigue you as you consider the move to CRM in the first place, then ask your potential vendors about advantages, disadvantages and cost differences with this delivery model. SaaS CRM can help you get started with a hand to hold and less stress as you dive into this new world of customer relationship management for your business.

Enderle said he likes the hosted option for first timers. "Hosted first because the entry cost is low and it will scale with the business," he advised. "Depending on the numbers you can stay hosted or, when the marginal benefit exceeds the marginal cost, switch over to an internal software application."

A key to remember – yes this can be nerve-wracking as you enter this new area of business IT, but the positives will likely far outweigh the negatives as you adopt CRM automation and watch your business become more efficient, more aggressive and more focused on its goals of growing your business and better serving your customers.

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