Big success for small-biz CRM

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While large businesses frequently fail when attempting to implement customer relationship management projects, CRM efforts by small businesses are often successful, according to many marketing managers, analysts and vendors.

In fact, their size may help small companies avoid many of the pitfalls that trap large-enterprise CRM projects. The CEOs of small businesses usually are entrepreneurs, with a hand in everything, which means that a CRM program will only be implemented with the support of top management. Small companies have less complicated existing infrastructures, which simplifies information technology integration. And small businesses usually are more likely to implement CRM systems with concrete objectives in mind.

"CRM always means change, and if you’re going to have a Queen Mary that has to change its course, it’s different than a small boat," said analyst Jay Curry, chairman of the Customer Marketing Institute.

Small-business success

Last month, an AMR Research study of company satisfaction with CRM systems found that only 5% of small businesses said their CRM installation failed to meet expectations, compared with 31% of large enterprises.

"The smaller, more focused implementations invested in CRM for a good reason, such as they needed to track contacts," said AMR analyst Lindsey Sodano. "People at the enterprise level like to buy for pie-in-the-sky reasons, such as `We want to get a 360-degree view of the customer.’ "

Still, small businesses have been slow to adopt CRM programs. Gartner Dataquest estimated that just 2% to 3% of North American small businesses used CRM in 2002.

But the CRM market is growing and will represent an investment of $44.1 billion over the next 10 years, according to AMR Research. Small vendors, such as FrontRange, Oncontact,, UpShot and Axonom, largely dominate the market for small-business CRM systems.

One key to successful CRM implementation is picking a vendor that understands the small company’s industry, Curry said. Ideally, the CRM package should be part of an overall vertical industry package for the entire business.

For example, law firm Friday, Eldredge & Clark of Little Rock, Ark., implemented the InterAction CRM package from Interface Software Inc. because it’s already used by many large law firms, said partner Joe Hurst. The firm hired a consultant to help install the software; it now runs the program in-house with a four-person IT staff.

The firm uses the software to manage two projects: maintaining a list of about 3,500 accountants who attend the firm’s annual tax seminar and tracking about 1,000 employee benefit plans for which the firm provides legal counsel.

Installation headaches

One of the biggest challenges in setting up a CRM system is importing data. Senior Flexonics Pathway, New Braunfels, Texas, which provides maintenance, repair and operations supplies to power plants and refineries, has had difficulties connecting its Maximizer CRM system, from Maximizer Software Inc., with its in-house enterprise resource management system. It currently is working through those problems with Maximizer and the consultants who helped install the product, Computer Aided Business Consultancy Ltd.

Another challenge is getting salespeople to use the CRM system. "Our average salesman’s experience is somewhere between 25 and 30 years. They call themselves `brown loafer salesmen,’ " said Dave McGrath, sales and marketing director for Senior Flexonics. "They are extremely successful but not computer literate." The company trained salespeople to use the system by providing one-on-one lessons twice a year.

The company scans all sales records, such as inquiries, quotations, orders, schedules and correspondence, into the Maximizer database. It also uses the software to import information from a third-party database from Industrial Information Resources to track construction and planned outages for power plants. The company pays particular attention to orders it lost, including, if possible, the reasons why it didn’t get the order.

"We use this the next time we have an opportunity; if we are able to identify what reason we lost the last order we can adjust our proposal for the next one," McGrath said.

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