Published on April 13, 2008
CRM Strategies for Small and Midsize Business: Joe Outlaw CRM Strategies for Small and Midsize Business These materials can be reproduced only with Gartner’s official approval. Such approvals may be requested via e-mail -- firstname.lastname@example.org. SMBs Are Failing at CRM!: SMBs think CRM is about technology. 80% of SMBs do not have a CRM vision or strategy. 75% of small businesses can not quantify the business impact of CRM on their business. SMBs Are Failing at CRM! Current Top Causes of CRM Failure: Current Top Causes of CRM Failure No customer relationship management vision or strategy Thinking technology is the solution No metrics/monitoring of benefits and lack of testing Poor-quality customer data and information Little coordination of departmental/point solutions Management has little customer understanding or involvement Rewards and incentives are tied to old, noncustomer objectives Limited or no input from the customers’ perspective Lack of specifically designed, mutually reinforcing processes Creation of the CRM team is an afterthought and lacks business staff Key Issues: Key Issues 1. What business and technology trends will drive small and midsize businesses (SMBs) to invest in customer relationship management (CRM)? 2. How will CRM vendors address SMBs’ requirements? 3. What strategies for CRM will be most effective for SMBs? SMB Business Drivers for CRM: Geographic dispersion of workforce and customer opportunities Increasing expectation of excellent customer experience. Increasing requirement to respond quickly to shifts in customer demand and market opportunities. Increasing use of electronic channels of interaction Downward price pressure SMB Business Drivers for CRM Plugging CRM Into the Enterprise: Plugging CRM Into the Enterprise Customer Service Sales Customer Business Value of Application Integration Increases the organizational speed and quickness Available-to-promise (finished goods) Capable-to-promise (make-to-order) Improved customer service Accurate order processing Improved production planning Improved supplier collaboration Business benefits of CRM and operational applications integration Technology Bringing Affordability, Flexibility and Quickness to SMBs: Technology Bringing Affordability, Flexibility and Quickness to SMBs Microsoft .NET, Web services, XML, SOAP — lowering the cost of application development, support and increasing interoperability Thin and smart clients — lowering the cost of support Rapid, phased deployment techniques — speed the time to benefits and reduce project risk Industry-specific CRM applications — reduce the cost of obtaining a tailored CRM solution Applications on .NET — emerging Web services standards — still in flux Thin clients — available now Smart clients — emerging Feature debt vs. Windows and synchronization — 3+ yr. more Available now Emerging for some industries and subindustries, will accelerate CRM for SMBs: Vendor/Product Evaluation Criteria: CRM for SMBs: Vendor/Product Evaluation Criteria Vision Future market focus Functionality Broad for small Deep for midsize Technology Easy to use Simple to maintain Effective user interface Adherence to standards Open architecture Extensible Easy to integrate Service & Support Quick implementation Low-hassle life cycle Easy access to help Cost Contract price Total cost of ownership Viability SMB focus User references 5% 20% 15% 15% 20% 25% 65% of the decision is not related to technology. Tactical Guideline: Through 2003, SMBs must increase the importance they assign to vendor viability and application integration in their CRM application selection decisions. CRM Suites for SMBs:Function Ratings: Copyright © 2002 CRM Suites for SMBs: Function Ratings Sales Customer Service Marketing Ratings as of July 2002 Field Service CRM Suites for SMBs Magic Quadrant: CRM Suites for SMBs Magic Quadrant Leadership Criteria Fully integrated sales, marketing, and customer service functionality Robust and coordinated support for multiple channels (in person, telephone, Web, e-mail) Robust support for disconnected use Easy-to-use, intuitive interfaces Support for CRM “technology sweet spot” Proven integration with ERP, back-office and other CRM components Horizontal foundation with vertical suites Robust development, customization and system administration tools Strong vendor viability As of February 2002 Siebel MidMarket Edition Multiactive Software Pivotal Software Onyx Infinium Oncontact Software Saratoga Talisma SalesLogix Applix PeopleSoft Trivium Technologies Salesforce.com Completeness of Vision Visionaries Niche Players Challengers Leaders Ability to Execute (From “First North American Magic Quadrant: CRM Suites for SMBs,” 6 February 2002) Firstwave FrontRange Solutions Epicor Software Onyx Software and Pivotal: Onyx Software and Pivotal Strengths Customer service functionality Most mature Web architecture ESP partnerships (IBM, DTT, Accenture) Challenges Support for mobile users Rebuild sales force Regain profitability in the face of increased, well-funded competition Strengths Sales functionality, particularly e-sales Highly flexible and configurable Challenges Strengthen, balance and broaden suite functionality Forge partnerships with Tier 1 ESPs Consider when requirements include: strong customer service functionality with contact center integration, financial services experience and expertise,limited support for offline use Consider when requirements include: strong sales functionality with support for multiple customer interface channels, particularly Internet and Web sales, subindustry support — investment banking, healthcare insurance and real-estate construction. Onyx Pivotal Salesforce.com: Salesforce.com Strengths Ease of use and intuitive interfaces Low monthly fee, almost no capital costs Very rapid startup/deployment is possible Challenges Providing for customization for customer-unique functionality and processes Maintain ease of use while broadening and deepening CRM functionality Overcome potential users’ security and privacy concerns with a hosted solution Consider when requirements include: rapid deployment, low initial cost, ease-of-use, support for widely geographically dispersed users, good enough CRM application functionality, sales automation is the primary function required, limited offline usage SalesLogix (Best CRM Division): SalesLogix (Best CRM Division) Strengths Sales functionality including strong mobile-user support Very flexible and highly configurable Back-office application integration (16 OEMs) Challenges Up-sell ACT! & TeleMagic customers; grow appeal to small business Cross-sell Best’s MAS90 and Enterprise’s 100,000 customers Upgrade and certify Sage’s value-added resellers (VARs) Build out a balanced CRM suite or risk becoming sales best-of-breed Consider when requirements include: strong sales functionality across multiple customer interface points, support for disconnected use for hundreds of users, high configurability/customizability and back-office application integration Siebel 7 MidMarket Edition: Siebel 7 MidMarket Edition Strengths Strong integrated CRM functionality Financial strength, viability and investment in technology Internet application architecture; smart client Strong mobile-user support Challenges Overcome the large-enterprise-only, high-cost image Sell and support effectively/profitably through indirect channel Consider when requirements include: solid and well-integrated functionality, a growth path to enterprise-class functionality and scalability, strong vendor viability and industry-specific support — healthcare, investment management, retail banking, insurance Meriwest Credit Union: Case Study: Regional credit union Problem change from employee to public credit union; increased competition inconsistent customer service — customer data in multiple unlinked sources Objectives establish branding based on high level of customer service provide consistent services for all customer interactions eliminate manual tracking of service requests enable one-to-one, personalized marketing Results increased deposits balance/member 27%; total deposits 17%; loan balances 46% reduced service call resolution 75% Lessons Learned underestimated effort to change organization from reactive to proactive use of systems integrator with credit union experience saved time and expense of system tailoring Meriwest Credit Union: Case Study SMB CRM Project Phases: SMB CRM Project Phases Two to four weeks Identify pain and opportunity points Process re-engineering Four to six weeks Vendor(s) selection Implementation strategy Application (in-house hosted) Resources (in-house, vendor, ESP or a combination) Function and constituent phasing Project economics and measurable results Ten to 24 weeks Project management Training Phased rollout Measure results against plan Ongoing/iterate Enhance Retrain Rollout Measure Evaluate Execute Manage Strategize *Average times based on application size: 50 to 75 users 6 8 10 18 12 14 16 26 28 30 32 34 20 22 24 2 4 Week Tipper Tie: Case Study: Tipper Tie: Case Study Midsize manufacturer/supplier to meat-processing industry Problem eroding market share; loss of key customers to competition inconsistent customer service; providing inaccurate information inability to accurately process orders quickly and efficiently Objective reduce order error rates improve sales close rates and shorten sales cycle increase sales productivity increase customer satisfaction and retention Results reduced order error rates — 5% improved sales productivity — 20% Lessons Learned enterprisewide involvement necessary to achieve sweeping organizational changes prioritize the process improvements; focus on the worst areas You Can’t Manage What You Don’t Measure: CRM Metrics for SMBs Strategic Metrics Return on investment; total cost of ownership Customer satisfaction; customer retention Increased revenues; decreased costs Increased addressable markets Increased market clout Increased business through indirect channels Tactical Metrics Number of contacts to close a service case Revenue per salesperson; revenue per partner New business from channel partners Percentage of contacts handled by self-service Number of FTEs to support CRM-related applications Increased prices; increased percent of customer’s business You Can’t Manage What You Don’t Measure Recommendations: Recommendations Develop an enterprise-wide CRM strategy, but implement tactically. Create customer-focused sales and service processes, then enable them with technology. Look to industry-specific, tailored suites of CRM applications to provide the most-appropriate and most-cost-effective support for CRM processes. Increase application selection criteria weights for viability and back-office integration capability. Develop metrics to monitor improvements; iterate to incrementally increase customer-centricity. Stay involved in and carefully manage CRM projects.
CRM Strategies for Small and Midsize Business These materials can be reproduced only with Gartner’s written approval. ... 37G, SYM12, 10/02