Small businesses, customer service and the cloud: Control Shift

CRM (customer relationship management) along with ERP (enterprise resource planning) and CMS (content management systems) is one of the three-letter acronyms many managers rely on to keep their businesses going.

While I’ve discussed ERP systems and IT system upgrades in the past, it’s time to take a closer look at the customer relationship management part of this troika.

The basics of CRM

At its simplest, CRM is software that is used to manage a company’s interactions with customers. It integrates things like marketing, salesforce management, customer support, help desk, call centre, and increasingly ecommerce functionality.

A company’s CRM software can either come in the form a series of programs or services for different tasks, an integrated CRM suite, or business-wide ERP system.

As with other business applications, these can either be hosted in-company off an internal server, or alternatively be hosted with a cloud provider (such as Amazon AWS, Google or Microsoft Azure) or purchased as a web-based service (Salesforce).

According to figures published in Forbes, as of 2012, the largest CRM platform companies by market share were Salesforce, SAP, Oracle, Microsoft Dynamics CRM and IBM, followed by a range of smaller vendors.

In many cases, though certainly not always, these systems are purchased through systems integrators or partners of one of the big CRM platform companies, rather than from the platform developer itself.

With each of the major CRM platforms, there is some room for customisation to make it fit with a business, and this work is typically done by a system integrator or partner.

For example, if your business chooses to go with Dynamics CRM, you might track down a Microsoft partner with expertise in your industry or a good reputation rather than going directly to Microsoft itself.

CRM purchasers survey

Recently, a company called Software Advice conducted its CRM BuyerView Report. The report looked at businesses with revenues of $100 million per year of less in Australia, the US and UK that were buying CRM software for the first time.

It showed that 55% Australian of small businesses buying a CRM system were upgrading from manual methods for tracking customers, compared to 47% in the US.

Overwhelmingly, these customers are also turning to cloud-based CRM options. The survey shows 75% of buyers are looking for a cloud-based package, 29% aren’t sure, and only one respondent wanted on-premises CRM software.

Breaking those first-time buyer figures down, 31% of small businesses were upgrading from using spreadsheets to track customer information and 22% who were using paper. By contrast, 22% were upgrading from another CRM package.

Other common methods included email clients (such as Gmail or Outlook) at 8%, email marketing software (including MailChimp) at 5%, proprietary software at 5% and industry-specific software at 3%.

In other words, a common reason for getting a CRM system is because a business has outgrown inefficient manual processes for tracking its customers.

Throw out the paperwork!

For new, early stage businesses or sole traders, manually keeping track of customers on a spreadsheet or even on paper can be an acceptable way to manage a business. But as a business grows, such arrangements increasingly become cumbersome.

Especially given sales can often be a relatively high-turnover job, the risk is that staff churn can quickly lead to a loss of institutional memory about customers.

If you’re responsible for a rapidly growing business, and customer service is important, there comes a point when you really need invest in a proper integrated CRM system, or at least start looking into it.