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When Is It Time for a Small Business to Invest in CRM Software?

Maybe the business you began a few years ago is humming along nicely, and after much hard work, you are beginning to see some real growth. Revenues are steadily increasing and your customer count is growing as well. And therein lies a challenge – as your business continues to grow, it's starting to become noticeably more difficult to deliver consistent service to your customers while at the same acquiring more customers.

So is it time to start evaluating CRM software systems to help manage your customer interactions, communications, transactions and relationships? Is CRM the solution to keep customer information organized and flowing so your business can continue to grow without the growing pains? When you begin asking yourself these questions, there are a few other related matters to start thinking about as well. Consider first reading the CRM Software Review report. It's an objective and annually updated review that is possibly the only good review report available. Then, here are some considerations that should be on your checklist when considering CRM software.

So when exactly is the right point in your business you should begin thinking that Customer Relationship Management software should be implemented? When you reach a certain volume of customers? Or is the deciding factor a certain amount of revenue or sales, or even when your own employees reach a certain number?

This is not a straight forward question, and there is no uniform answer for everyone.

In all probability, you'll know that you need a customer management application when manual business processes become overwhelming. When you reach a particular volume of customer accounts where managing them, making the follow-up calls, responding to inquiries and keeping your sales churning becomes more laborious and onerous than in days past, then it's likely that something's got to change. And that's a good clue it may be time to grow your business automation and examine CRM systems.

Rob Enderle, an independent IT consultant in San Jose, California, says you'll know it's time for CRM automation when you hit a critical mass in your business workload. "You bring in CRM software when the customer number gets beyond what the executives can personally monitor," he says. "The point to CRM software is to maintain consistent customer satisfaction and once a company reaches a size where sales and support, without oversight, are the primary aspects of maintaining customers you bring in a CRM system as a way to put executive oversight back on maintaining customer relationships and loyalty. It's a tool which allows a few executives to keep track of more customers than they can manually."

Another consideration, he advises, is to adopt customer relationship management software "as soon as you realize that customers are being disenfranchised by executive management and hopefully before you notice a customer churn problem that will likely soon follow."

So is there a certain number of customers to warrant the move? "After about a 100 customers you should be thinking of CRM," Enderle recommends. "In terms of revenue you need enough margin to be able to afford the software." But it's still not for everybody, he says. "CRM software works best where personal relationships need to be maintained so certain industries don't lend themselves to the tool."

So where to begin? First talk to everyone your business comes into contact with. Talk to your customers to find out what they need from you to maintain great customer relationships with your company. Ask them if they have other suppliers who use CRM systems that are working well. Maybe some of your customers are already using CRM applications as well, and you can learn from their experiences.

Talk to your staff. What automation and productivity tools would help them do their jobs better? What difficulties or problems in their business work flow would they like to see resolved? Ask them for their help, listen and take copious notes. Take their concerns with you when you speak to Customer Relationship Management software vendors.

Visit technology trade shows in your area and ask other executives what's working for them and even how and when they decided to pull the trigger on purchasing a CRM software system. You're not the first to do this, so be smart and learn from the experiences of others, and as importantly, learn from their mistakes to save yourself and your business the headaches.

So how do you choose the right CRM vendor? Talk to CRM software vendor representatives and value added resellers (VARs). Go to CRM software trade shows, read all you can online and turn yourself into an educated and informed buyer. You wouldn't buy a new car without doing some research on customer reviews, fuel mileage, crash safety ratings, reliability and resale values, so don't look at CRM systems without a similar level of due diligence.

And most of all, ask the software vendors plenty of questions. Ask about scaling and capacity issues with the business software. Ask how it will work with the other internal systems you are running. Will the CRM application integrate easily with your accounting software, HR software or ERP system? Think about the future. What will you want it to do in two years as your company continues its growth? Will you be able to easily and cost effectively add new features or software modules?

Then pick between 3 to 6 CRM software products that you are impressed with and dig even more deeply. Down select to get to a short-list of your top 2 or 3 vendors. Ask those finalists to give you detailed and scripted software demonstrations that reflect your actual challenges and business problems. Ask them to use some of your actual customer data and see how it is displayed and organized and how it will work in each system.

Include several of your key staff in the demos and evaluations. Are there products that they think are easy to use? What do they think are the most important features - and why?

These key steps, along with talking to customers, other CRM users and your staff are very important, Enderle says. "Before making the move and selecting a CRM vendor find out what other companies in the same industry are using and why, also find out if your own people have experience with any particular tool and factor both into your software selection process," he says. "Switching CRM software systems can be very painful and spending quality time up front in the software selection process can pay off huge dividends over time."

Don't be timid. Challenge the software vendors. Question their claims. Make them show you what they mean when they say the product does something. Now is the time to walk out of the room without doubts or lingering questions. You're about to make a big investment to advance your business for the future.

So what about CRM in the cloud? Should you consider hosted software over an in-house installed application?

This may be a preferred option, especially if you have a small IT team, or no full-time IT staff. There are several good vendors out there offering cloud CRM or Software-as-a-Service (SaaS) CRM systems which can help you adopt CRM with less hassle than going it alone. If the cloud CRM benefits of reduced cost, faster time to market or outsourced technical administration intrigue you as you consider the move to CRM in the first place, then ask your potential vendors about advantages, disadvantages and cost differences with this software deployment model. Cloud or SaaS CRM systems can help you get started with a hand to hold and less stress as you dive into this new world of customer relationship management technology for your business.

Enderle says he likes the cloud CRM option for first timers. "SaaS first because the entry cost is low and it will scale with the business," he says. "Depending on the numbers you can stay hosted or, when the marginal benefit exceeds the marginal cost, you may want to switch over to an internal software application."

Yes this can be time consuming and nerve-wracking as you enter this new area of business software applications, but the positives will likely far outweigh the negatives as you adopt CRM automation and watch your business become more efficient, more assertive and more focused on its objectives of better serving your customers.


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