Lessons Learned from Enterprise CRM Pave the Way for SMEs

We have all had our share of customer service nightmares. At a basic level, it is being bombarded with hundreds of pieces of ‘junk’ mail each week that finds its way into our electronic and home mailboxes. At the highest level our customer service nightmares exist within entities that we thought we knew and trusted -the kind where our bank passes us from one employee to another and fails to give us the answer to our problem.

Customer relationship management is a well-known term these days. It is a process that bridges the gap between business and technology to help us learn about our customers and determine their relationship with our company. On the business side, it is developing strategies that assist us in understanding our customers, and anticipating their next move. On the technology side, it is capturing customer information from all levels of an organization, consolidating it, analyzing it, and then using the resulting data to develop strategies that will keep our customers satisfied, retain the most profitable ones and enable us to effectively acquire new ones.

Small and medium-sized enterprises (SME) have typically played a ‘wait and see’ approach to CRM implementation. Many SMEs perceive CRM solutions as being extremely complex and primarily for larger organizations. Mix in the cost of CRM, with the challenge of integration and lack of numbers on return on investment (ROI) - it is little wonder smaller enterprises have chosen to take their time on the uptake.

But lessons learned in the past have translated into better opportunities for SMEs. Demand is brewing as SMEs realize the increasing importance of keeping their customers happy. What is ironic is that after being ignored for so long, SMEs have become one of the largest markets for CRM solutions - a market traditionally dominated by the enterprise sector. Dataquest says CRM “may not be growing as fast at big companies, which are likely to reevaluate their CRM strategies. The biggest growth is expected to come from the small and midsize market.”

Vendors are realizing that the problems experienced by large enterprises during CRM implementations are less of a challenge for the SME market. For instance, generally the bigger you are the more business rules and processes you have. As a result, large enterprises find it a challenge to approve new processes and implement CRM applications quickly. In particular, there is the challenge of gaining support from all levels of the company, the unwillingness of departments to share their information and of course, the training of all employees. Smaller companies are more able to prepare for CRM implementation and approve new business processes more quickly. In many cases, there is also less of a technology integration problem because they have less technology to begin with.

This change in the market has prompted large CRM vendors to scale-down applications to meet the needs of the small and medium-sized market. What these companies have to their advantage is the knowledge they have gained from larger enterprise implementations – lessons learned that filter down to their smaller clients. CRM vendors are realizing more than ever that it is not enough to just sell and install, an ironic consideration given the business they are in. Companies that implement CRM solutions are taking their time, becoming more methodical, and vendors need to assist every step of the way including strategy development.

Those vendors that understand SME needs and their customers’ behavior will benefit the most. In particular, many experts contend vendors that can effectively meet the needs of industry specific SMEs will have a competitive advantage.

The lessons learned from implementing CRM within large enterprises have provided SMEs with an opportunity to do things right the first time. For instance, experts say SMEs should start with a strategy for their most valuable customer segment, implementing technology that can be easily expanded to other customer groups as time goes on. Small and medium-sized businesses cannot be everything to everyone so tackling their most important problems or customers will enable them to budget their resources effectively and force them to plan ahead.

Additionally, a growing number of companies have begun to do a better job of examining the ROI from their CRM implementations. According to a survey by AMR Research, 78 percent of companies choose to gauge their CRM project success by evaluating customer satisfaction and retention rates, while 71 percent review cost savings. Some experts say ROI is very different between varying CRM applications. Therefore, if small and medium-sized businesses implement their CRM solutions through a phase-by-phase method they may find it easier to identify the return on their investment.

Another consideration is that SMEs should not let their E-business and CRM strategies exist separately. The strategies should be merged so they do not compete with limited resources but are considered equal priorities. To do so requires that companies spend the appropriate amount of time and money effectively scoping the project before it begins and identifying how it will affect other internal strategies.

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With a better understanding of factors that improve CRM implementations, SMEs and vendors can work together to move the industry forward and offer better service to customers.