Posted taken from EILENE ZIMMERMAN , The New York Times
As discussed in the small-business guide we have just published, large businesses have long used customer relationship management software to automate sales and marketing and to manage their interactions with customers. In the last several years, though, small businesses have started using this kind of software, too. In part, that’s because the programs have become cheaper and easier to use.
Sorting through all of the options, however, can be a challenge. To discuss those options, we turned to Amy Larrimore, the managing partner of the Empire Builders Group in Philadelphia. Ms. Larrimore, who leads the firm’s information systems and technology division and who helps companies of all sizes choose the right technology for their needs, prepared the graphic below, which compares estimated costs for several customer relationship systems and is based on research Empire did for an actual client. The following conversation has been condensed and edited.
If you have 200 clients, 500 prospects and 1,000 leads (a very small database), and you interact with them in person, on the phone, on social media, on e-mail and hear about them from other people or read about them in the newspaper, that’s a lot to keep track of. How many of them have kids on their way to college — if you’re a financial adviser? How many of them are lawyers or have legal training? Who wants to remodel their house in the next year? These are not questions you can easily answer, so most of the time businesses find when they put what they know about disparate people into a database, they get some amazing insight into what or how to sell.
Due diligence is a second area of difference. Large businesses walk into a C.R.M. meeting with Salesforce, and they have with them a cost analysis, a capital expenditure analysis for the next three years. And they can ask really good questions to find out if this is the best thing for the money — whereas a small business doesn’t have the resources for that. There’s a big need for consumer education when it comes to C.R.M. for small businesses, and it’s not happening. So C.R.M. systems are being sold to small businesses who don’t understand what they are buying.
Another differentiator between large and small businesses: I.T. and infrastructure. Small businesses usually have no I.T. support so they pay for it as a service, whereas a larger company has an I.T. department headed by a chief information officer. If you’re Nike, you’re paying to run your C.R.M. system on your own private Amazon cloud. But if you’re a small business, where are you going to install and run your C.R.M. software? And the answer most often is, “I have no idea what this question means.” If that’s the case, there are 50 C.R.M. systems you shouldn’t be using. You need a turnkey, software-as-a-service model, the one where you give your credit card information and start using it.
I always recommend to clients who want to use Salesforce that they will need a dedicated person to manage it, a database administrator. But these smaller, newer C.R.M. systems don’t integrate in that old school way. Most of them, out of the box, will play happily with other applications small-business owners use, like Constant Contact or MailChimp. The biggest difference is that you can access these C.R.M. systems on the Web, on someone else’s server, from any device. They tend to have less required configurations and customizations and need less technical staff to manage them — they are, basically, more user-friendly.
We created the chart (below), which compares estimated costs for several C.R.M. systems, so you can see what’s really involved. We added “configuration support” because you have to remember that while these systems are friendly out of the box, they aren’t turnkey. Want custom reports that give you what your trusty Excel sheet gives you? You have to build them? Want to track people’s pet’s names? You need your own field.
Also, you need to know that it’s a magic bullet in the sense that it can show youwho to sell to and what to sell to them. But you’re still going to have to make those phone calls, make those sales appointments and follow up with those contacts. I see too many businesses walking into a C.R.M. system expecting it to increase their sales. It’s not. It will help your sales representatives increasetheir sales.
Whenever I get asked the return on investment question around a C.R.M. system, I answer like this: If you had 30 percent more qualified leads a month, what would you do with them? How many of them would you close? What would that look like for your revenue? If you’re not ready to get serious around your sales process, it probably isn’t worth the money, no matter what the size of your business.
This chart was prepared by a consulting firm, the Empire Builders Group, for one of its small-business clients. The client had three staff members who needed access to a C.R.M. system and wanted it to integrate with Microsoft Outlook and QuickBooks. It also wanted to continue to use Constant Contact and had more than 10,000 contacts to manage. This chart compares the costs of four different C.R.M. systems. One note: SugarCRM requires a license for each user, and treats each integration as if it is also a user. Because of that, companies must pay for a license for each person using the software and buy a license for each integration as well. In this example — where there are three people using the CRM and two integrations — five licenses are required.