As a CRM consultant and manager, I have had a number of interactions with key executives of small firms and large corporations alike. There are striking differences in the way a small business approaches CRM versus the way a large enterprise does. This, of course, is a direct consequence of the differences in the scale and maturity of the two.
One of the most important questions that I generally begin my CRM discussions with is ‘What is the strategic objective that you wish to achieve with the CRM implementation that you are looking at?’
For large corporations, the strategic vision drives the CRM implementation – i.e. a top down approach. The vision defines the key performance indicators (KPIs). The KPIs determine the process improvements needed, which in turn define the system requirements. So, as an example, to improve on the ‘Average time to resolve a complaint’ KPI, improvements would be required in the customer support process across customer touch points. This improved process flow would determine the functional and analytical requirements of the CRM system.
In large enterprises, the strategic objectives can only be met by collaboration among multiple teams and departments. For example, consider a large financial services organization looking at increasing its ‘average annual fee income per customer’. There are multiple teams who need to participate in designing the CRM strategy here.
The primary customer of a financial services firm is the distributor. The bulk of the orders from retail end customers are generated through intermediaries. The more the number of high quality intermediaries, the higher the sales per user. So participation from the Distributor On boarding team is a must.
Similarly, the customer service department is also required to collaborate. They are interacting with the end customer across the lifecycle and across touch points. They are responsible not only for retaining customers, but also for increasing the average income per customer by generating cross-sell and up-sell opportunities.
And the IT team needs to contribute too. The scale and complexity of the implementation on an enterprise CRM system demands full time trained IT professionals to manage the CRM platform and infrastructure. Incremental customization may be required over time as the CRM processes improve. Also, with more and more data available, the top management would want to implement advanced CxO level dashboards to monitor various aspects of the business and the performance of different teams.
As is clear, an ‘enterprise CRM’ system cannot be a success without full participation from all teams contributing directly or indirectly to the overall customer experience.
Often, due to this, various auxiliary functions are also integrated into the enterprise CRM system. For example, Inventory Management, Purchase Management & Shipping are part of most enterprise CRM systems. Though these are not directly customer facing functions, these are essential to manage the overall customer experience.
On the other hand, SMBs tend to look at a CRM implementation bottom up. The starting point is a customer facing process that needs to be streamlined, say, the lead management process.
Typically, in a small business, key CRM functions such as sales, marketing or customer support are carried out remotely or are outsourced. The CRM processes are not mature and often there is a lack of transparency about the on field activities of the customer facing teams. The need to streamline arises as the business scales up and manual consolidation of customer interaction data is no longer feasible.
Such requirements can be catered to by a variety of small applications available in the market. However, it is necessary to have a long term CRM strategy in place. Otherwise, it can lead to a fragmented IT architecture in the long run. The first step here is to document the key process and have the big picture, before you start implementing a system. Then you can incrementally implement one process at a time and test the results. This will ensure the best return on investment and unified system architecture as you move ahead.
Another key aspect is the flexibility of customization available in the CRM application. Enterprise CRM systems provide greater flexibility and also industry specific vertical solutions. For example, an Insurance specific CRM application is readily customizable to handle insurance policy data and claims data. Of course, you would also require trained IT professionals as part of your team to deliver and maintain such a customized application. Most of the small business CRM systems are horizontal solutions and offer limited flexibility for niche businesses.
Of course, the cost is a vital consideration. Enterprise systems require large upfront investments in implementation as well as change management. The various cost heads include hardware, software, implementation & customization, testing & deployment, training and maintenance. Small Business CRM systems are available in the form of easy to deploy, cloud based modules on a ‘per user/per month’ basis offering a cost effective way for SMBs to start adoption. Also the time to deploy and training requirements for a small business CRM system are minimal.
CRM is part of a holistic business strategy and no one solution fits all requirements. A careful consideration of business objectives, flexibility requirements and associated costs is required to arrive at the right choice. It can be overwhelming at times because of the extensive variety of solutions available in the market. Professional advice does go a long way in ensuring a successful long term CRM strategy. In fact, I would recommend devoting considerable time and effort to building a solid business case even before starting with selecting a CRM system.