What can CRM do for SMB? (Part 1, What is it?)

Those of you who have followed any of my past blogs know that I am fond of multi-part series. I have been noodling around about doing a series on CRM for a while and my recent trip to Microsoft HQ for the SMB Cloud Summit, really kicked me in the ass to get this series started.

I toyed with the idea of calling this series “CRM for Dummies”, but I did not want the title to insult your intelligence, nor did I want to get any Cease and Desist letters from the “for dummies” folks. That said, there is something to be said about the “for dummies” concept, even for people of advanced intelligence, as I know that you clearly are. I consider myself to be fairly intelligent when it comes to technology, but I am not ashamed to say, that for new technologies that I do not know, I will quickly run out and buy the applicable  “for dummies” book. They can give you the fundamental context so many other avenues lack, and that eliminates that period of confusion when you instead started at step 2. Explaining the details of how the 21-speed derailleur works is somewhat meaningless without first understanding that a bicycle is something that you sit on and pedal and it takes your places. I will be using the “for dummies” mindset in writing this series, but fear not, by the end, we will get pretty advanced.

Before I jump in, I should probably set the stage a little bit. Since the title of this series is “What can CRM do for SMB?” I should start by defining what those acronyms mean to me. SMB is short for “Small and Medium Businesses”, but who exactly does that include? According to Microsoft this includes companies from 1 to 250 employees. Microsoft considers companies over 250 employees to be “Enterprise”. It is a rare circumstance that a company with fewer than 10 people would have the need for CRM, and as a rule, companies with less than about 25 employees, may not get an acceptable ROI on CRM.

So what is CRM? With the advent of Cloud based CRM systems, CRM is suddenly accessible to SMBs. Before cloud, CRM was an expensive proposition to deploy, and typically only enterprise or companies with a really significant need, utilized CRM. Not surprisingly, a lot of SMBs have no idea what CRM even is. CRM is an acronym for Customer(or Client) Relationship Management. You may be thinking, “we already have procedures and methods in place for managing our customer relationships”. Clearly, if you are still in business, you must have something in place, so why would you consider adding CRM to the mix?

At it’s core, CRM is a contact manager. You may currently be managing your contacts in Outlook or Gmail, or an excel spreadsheet. Maybe you have graduated to ACT or Goldmine or something similar, both of these are examples of what I call “CRM Lite”. So how does CRM compare to these traditional SMB methods?

Throughout this series I will be using Microsoft’s Dynamics CRM for my examples. Microsoft Dynamics and Salesforce.com are the leading cloud CRM choices today. Microsoft’s price point for Dynamics CRM is significantly lower than Salesforce’s entry product, which to me lowers the barrier to entry for SMB. While Forceworks is fully Certified in both platforms, there are reasons why we feel that Dynamics CRM is a better choice for SMBs today, and I will get into those reasons later in this series.

So where was I? Oh yeah, how does a CRM compare with traditional SMB methods of contact management? I will skip the discussion of using a spreadsheet to manage your contacts as there is no justification I can come up with to support this method. But a lot of you may be using an email client for this. Outlook is probably the most used tool, and Outlook offers significantly more functionality than say a Gmail client. But even Outlook is lacking when it comes to true Contact Management, especially if there is more than one person in your organization. Outlook is very “User Centric”. It contains lists of your contacts, your calendar and your tasks. There is within Outlook a history, probably only of email communications, with your contacts. But Outlook does not really provide a good way to view this history in a useful way, nor will this include the history other users in your organization may have had with a contact. So right there is where the Management of that Customer Relationship starts to break down. There are some workarounds. You can create a shared address book so that all users can see the contacts. You and your other users can copy everybody on each email so you each have an email history. You can do some calendar sharing to try to get everybody on the same page. You may be doing some, or all of these steps, but what you are really doing is trying to make Outlook a CRM.

Maybe you have graduated to ACT or Goldmine, or some other similar small business solution. This will get you closer. Some of these tools will integrate with Outlook and seek to consolidate some of these activities into a usable format that you could in some way act on. If this was all that a CRM system did, I would say stick with them, but I did refer to them earlier as “CRM Lite” systems. Moving from an email client or spreadsheet to one of these systems is a step up to be sure. When you don’t now, what you don’t know, systems like these can seem like the pinnacle of contact management. Frankly, before the enterprise grade systems went cloud, these may well have been the pinnacle in their price range, but now, I would have to imagine, they are scrambling.

Cloud is the single most disruptive technology I can remember in my lifetime. It is turning long-established business models upside down. I mean, when a Microsoft or Salesforce brings to SMB, enterprise grade CRM at a price point that fits… what the hell are these other guys gonna do? All of this cloud stuff is cheap already, there’s no room left to compete on price, and they can’t hope to bolt on features fast enough to catch up to the value provided by the big boys. While cloud may be enabling the launch of tons of new ventures, it is simultaneously crushing an equal amount of  established players. I mean, I kinda feel sorry for them, but in the end, if I am able to get a better solution for a similar cost, from a stable company… well, it is Darwinian indeed.

So, back to my topic. CRM differs from the email client manager model in that it is “Contact Centric” instead of “User Centric”. In other words, they are no longer your contacts, they are the organization’s contacts. CRM provides the mechanism for connecting those contacts with any users in your organization who need to be associated with them. In the process, CRM is keeping all of the facts, information, communication history, etc, together in one place. A truly actionable view of the entire relationship with that contact, accessible to anyone in your organization who needs to know. While this capability may match the full feature set of one of the “CRM Lite” applications, for Dynamics CRM, this is the most basic of its capabilities. In other words, it doesn’t end there… it starts there.

What can CRM do for SMB? (Part 2)

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