Small Business CRM: 5 Considerations

Updated: November 20, 2009

The CRM or SFA (sales force automation) software market begin for small businesses in 1987 with the release of ACT!, now owned by Sage Software. Business cards and scribbled notes gave way to a customized database and sales process best practices. From one product sprang an industry now including thousands of options available on multiple platforms.

Today, CRM options abound, as do the questions for business owners. When to jump into CRM? How to choose the right application? How to integrate the new software into the sales process? Below are five considerations for the process of acquiring and successfully leveraging a CRM system to improve the sales process in a small to medium-sized company.

Consideration #1: When Does a CRM System Make Sense?

The crucial question of when to acquire some type of CRM has been made much easier by the explosion of low-cost hosted software options. While this is not the time to discuss the value of SaaS (software as a service), the ability to pay a few dollars per month per user for hosted CRM software greatly reduces the costs of a quality CRM application.

When should companies start using CRM? When there are more salespeople than just the owners of the business. Most entrepreneurs who start businesses rely on previous customers, known contacts and a small list of targeted prospects. Focus at the beginning of a new company often revolves around building the processes to satisfy the short list of critical customers. Once the company achieves some level of stability, the search for new customers begins. A CRM system should arrive with the first non-owner sales person. If your company is past that point, the sooner a CRM system solidifies the sales process for your sales team and sales manager, the better.

Managers will wonder if the time and effort to choose a CRM solution is justified, especially if existing sales people complain about being forced to use a system. Will the sales benefits justify the hassle?

Absolutely, especially in today's market with so many inexpensive CRM options. CRM adds structure, control, and management oversight to the sales process and the sales staff. Small companies often underestimate the time required to create and manage a sales team. CRM applications provide structure and best practices for the sales process as part of their package. Embrace the value of CRM best practices early, and reap the sales rewards for years to come.

Consideration #2: Where to Host the Software?

ACT! software ran on a single PC for the benefit of a single salesperson. Today, CRM software runs on platforms ranging from a single computer to a company network server to a company Web server to a third-party hosting provider. The distributed nature of modern small businesses demands a networked solution, not one designed for a single user. Sales managers need oversight of all salespeople, and only networked CRM makes that possible.

Sales people are the most likely small business employees to have a remote office, often in their homes. Accessing the CRM from remote locations securely is easiest with software hosted on a Web server accessed through a browser. This narrows the hosting options to a company Web server or third-party host.

Free and open source software applications run on any Web host. The most popular, SugarCRM, offers free and paid versions for download. Many Web hosting companies offer free versions of SugarCRM and others such as vTiger that install with a few clicks.

Third-party CRM application host companies charge some money per user per month, although a few have plans allowing one or two users for no charge. All have free trial periods. One big advantage of hosted applications is the constant upgrade process that goes on, without requiring customers to pay extra for support and subscriptions, or worry about security patches.

Do not put sales software on individual computers. Host your CRM solution on your own Web server, or sign up for a third-party service. Effective management and oversight require a networked sales system.

Consideration #3: Evaluating CRM Candidates

When Internet searches return millions of entries for the term "CRM software," how do you choose what's best for your business? Talk to other small businesses, in your market segment and in other segments. Finding a hosted CRM application takes almost no effort, but choosing among multiple candidates does require some testing.

Involve everyone in the evaluation phase, beginning sales person to company president, who will use the CRM system. Do not ask if Candidate A is good enough to use, but rather ask which of Candidates A, B and C does the best job for your salespeople and managers. Take advantage of trial periods to thoroughly test all parts of the software. SaaS vendors admit many customers take three or more months to really feel comfortable with their software, so don't try this in an afternoon.

Evaluate how you can make copies of your data to download for safekeeping. Your hosted provider will not lose your data, but having backups will make it easy to transfer to another system if necessary. Download the data, then verify that all of your information is included. Grade each software candidate on the ease of protecting and downloading your data files.

Decide if you need to integrate your CRM solution with other applications before you decide on a product. Does the software offer a file that can be uploaded into your accounting program? Interface with your inventory or order entry software? If this type of cross-application data exchange is important, test it thoroughly before deciding on a CRM application.

Consideration #4: Accepting the CRM Workflow

Salespeople will complain the CRM software doesn't work they way they like to work. This is, almost always, a good thing. CRM vendors take feedback from all customers into consideration when they upgrade their software. You are receiving a pre-built "best practices" sales cycle framework with each CRM application.

That said, nothing is ever a perfect fit. However, trying to rewrite the software or develop your own modules will suck huge amounts of money, time and business focus away from company management. Avoid that at all costs.

All CRM applications include ways to customize the application to fit your needs. Use a "tag" option to track details in ways the software developers didn't. Put searchable key words in the notes or comments fields. Reworking an incumbent application in a major way requires far more time and money than choosing a different CRM solution that better fits your needs.

Consideration #5: User and Manager Adoption

No matter how wonderful the software, some users and managers will balk at changing their habits, and avoid the new application. A successful CRM implementation must be used by everyone involved in the sales process to provide customer contact consistency and full management oversight. Only by complete compliance will the company benefit from an automated sales and customer tracking application.

Dictating compliance with threats only creates resentment among the sales team members. To encourage application use, start sending all sales department information through the CRM solution's internal communication channels rather than via email. All systems offer ways to comment on accounts, assign tasks, and send messages to other users. When sales team members find themselves out of the loop, they will be strongly encouraged to get back in the loop via the new CRM system.

Just as the accounting department refuses to pay for expenses without a receipt, the sales department should refuse to pay commissions on accounts not inside the CRM application. Do not present this requirement as punishment, but as a paperwork necessity.

Any level of participation short of complete adoption and compliance is a failure. All the members of the sales team must live within the CRM system to make it effective, and all managers must be consistent yet patient in moving salespeople into compliance. One holdout in the management chain of command who refuses to use the CRM system will doom the project to failure. Everyone must be on board, and in the CRM system, to generate the benefits such an organized and disciplined sales approach will provide.

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